CAUSE NO. 10-E-0334-C MARY ANN DITTERT, … · RAYMOND KING, C.J. FUCIK, and DOWNEY’S CANEY CREEK CLUB LOT OWNERS ASSOCIATION, INC. Defendants § § § § § § § ... or about

Plaintiffs’ First Amended Original Petition Page 1 of 19

CAUSE NO. 10-E-0334-C

MARY ANN DITTERT, RUTH RISINGER, LAMAR BROWN, et al. Plaintiffs

§ § § §

IN THE DISTRICT COURT

v. § JOSEPH L. WILLIAMS, LILLIE VANN, JACQUELINE BLANKENSHIP, RICKY COX, KATHY LYNN KING, CHARLES RAYMOND KING, C.J. FUCIK, and DOWNEY’S CANEY CREEK CLUB LOT OWNERS ASSOCIATION, INC. Defendants

§ § § § § § §

MATAGORDA COUNTY, TEXAS 130th JUDICIAL DISTRICT

PLAINTIFFS’ FIRST AMENDED ORIGINAL PETITION TO THE HONORABLE DISTRICT COURT:

PLAINTIFFS, MARY ANN DITTERT, RUTH RISINGER and LAMAR BROWN,

(collectively ‘Plaintiffs”) complain of Defendants, and would show the Court the following:

I. NATURE OF THIS ACTION

1. Plaintiffs are members of Downey’s Caney Creek Lot Owners Association, Inc.

(hereinafter “DCCCLOA”) by virtue of their ownership of lots located within the Downey’s

Caney Creek Club subdivision of Matagorda County. Plaintiffs seek a writ of mandamus to

enforce their statutory and common law rights of inspection, a writ of mandamus to compel the

holding of a mandatory special meeting requested under the bylaws of the association, protection

of the Court to prevent destruction of corporate documents, protection of the Court from


Defendants’ wrongful conduct and a derivative action for damages.

II. DISCOVERY CONTROL PLAN

2. Plaintiffs intend that discovery be conducted under Level 2.

III. PARTIES

3. PLAINTIFF, MARY ANN DITTERT, is a current member of DCCCLOA and is a

natural person residing in Montgomery County, Texas.

4. PLAINTIFF, RUTH RISINGER, is a current member of DCCCLOA and is a natural

person residing in Matagorda County, Texas.

5. PLAINTIFF, LAMAR BROWN, is a current member of DCCCLOA and is a natural

person residing in Matagorda County, Texas.

6. DEFENDANT, JOSEPH L. WILLIAMS (“Williams”), was at times relevant to this

action and is currently a member of the DCCCLOA Board of Directors and the President of

DCCLOA. Mr. Williams is a natural person residing in Matagorda County, Texas and may be

served with process at his residence at 3507 Gulfview Dr., Sargent, Texas 77414 or wherever he

may be found. Issuance of citation and service of process is hereby requested.

7. DEFENDANT, LILLIE VANN (“Vann”), was at times relevant to this action and is

currently a member of the DCCCLOA Board of Directors. Ms. Vann is a natural person residing

in Brazoria County, Texas and may be served with process at her residence at 251 S. Amherst

Dr., West Columbia, Texas 77486 or wherever she may be found. Issuance of citation and

service of process is hereby requested.

8. DEFENDANT, JACQUELINE BLANKENSHIP (“Blankenship”,) was at times relevant

to this action and is currently a member of the DCCCLOA Board of Directors. Ms. Blankenship

is a natural person residing in Fort Bend County, Texas and may be served with process at her


residence at 5211 Cherry Ridge, Richmond, Texas 77046 or wherever she may be found.

Issuance of citation and service of process is hereby requested.

9. DEFENDANT, RICKY COX (“Cox”), was at times relevant to this action and is

currently a member of the DCCCLOA Board of Directors. Mr. Cox is a natural person residing

in Harris County, Texas and may be served with process at his residence at 14710 S. Silvergreen

Dr., Houston Texas 77015 or wherever he may be found. Issuance of citation and service of

process is hereby requested.

10. DEFENDANT, KATHY LYNN KING (“Kathy King”), was at times relevant to this

action and is currently a member of the DCCCLOA Board of Directors. Ms. King is a natural

person residing in Matagorda County, Texas and may be served with process at her residence at

35122 Gulfview Dr., Sargent, Texas 77414 or wherever she may be found. Issuance of citation

and service of process is hereby requested.

11. DEFENDANT, CHARLES RAYMOND KING (“Charles King”), was at times relevant

to this action and is currently a member of the DCCCLOA Board of Directors. Mr. King is a

natural person residing in Matagorda County, Texas and may be served with process at his

residence at 35122 Gulfview Dr., Sargent, Texas 77414 or wherever he may be found. Issuance

of citation and service of process is hereby requested.

12. DEFENDANT, C.J. FUCIK (“Fucik”), was at times relevant to this action and is

currently a member of the DCCCLOA Board of Directors. Mr. Fucik is a natural person residing

in Matagorda County, Texas and may be served with process at his residence at 49 Seagull,

Sargent, Texas 77414 or wherever he may be found. Issuance of citation and service of process

is hereby requested.

13. NOMINAL DEFENDANT, DCCCLOA, is a Texas Nonprofit Corporation with its


principal place of business in Bay City, Texas. DCCCLOA may be served with process through

its registered agent, Roxanne Williams, at its registered address 8146 FM 457, Bay City, Texas

77414.

IV. JURISDICTION AND VENUE

14. This Court has jurisdiction of this cause because the matter in controversy is within this

Court’s general jurisdiction and the amount in controversy exceeds this Court’s minimum

jurisdictional limits. Venue is proper in Matagorda County because all or substantially all of the

transactions, acts and/or omissions giving rise to Plaintiffs’ claims occurred in Matagorda

County. See Tex. Civ. Prac. & Rem. Code §15.002(a)(1).

V. REQUEST FOR DAMAGES AND EQUITABLE RELIEF

A. FACTS

15. Plaintiffs are members of Downey’s Caney Creek Club Lot Owners Association, Inc. by

virtue of their ownership of lots located within the Downey’s Caney Creek Club subdivision of

Matagorda County.

16. Plaintiffs and various DCCCLOA members have made numerous attempts to inspect the

books and records of DCCCLOA during regular business hours. On all occasions other than

one, Plaintiffs were denied access to such records. On one occasion, Plaintiff, Dittert, was given

access to an office where the purported corporate documents were piled-up in such disarray that

no location of true corporate records could be made and sense could be made of any of the

“produced” documents.

17. On February 12, 2010, Plaintiff, Dittert, through counsel, made a written demand to

inspect the corporate books and records. The written demand stated its purpose and said purpose

was proper. The written demand was hand- delivered to DCCCLOA on February 16, 2010.


18. In a document dated February 27, 2010 but actually mailed on March 9, 2010, Defendant,

Joseph L. Williams as President of DCCCLOA, responded to Dittert’s written demand providing

available dates for the inspection.

19. Plaintiff, Dittert, appeared at the principal office of DCCCLOA on a date provided by

Defendants to conduct the inspection. The date, time, and place where Plaintiff Mary Ann

Dittert attempted to commence the inspection were reasonable. Plaintiff Mary Ann Dittert took

Don Sablatura with her and Mr. Sablatura attempted to use a video camera to document the

inspection of the records. However, once members of the DCCCLOA Board realized Mr.

Sablatura was videotaping, the single binder produced that allegedly contained all requested

corporate records was forcibly snatched from Dittert’s possession, and she was forced to leave.

20. Pursuant to Texas common law and to §22.351 of the Texas Business Organizations

Code, Plaintiffs, as members of the Nonprofit Corporation, are entitled to examine and copy the

books and records of the corporation upon written demand and for proper purpose. Plaintiff,

Dittert, has complied with the requirements set forth in §22.351. Plaintiffs no longer seek a writ

of mandamus ordering an inspection because after the Plaintiffs instituted this lawsuit,

Defendants substantially complied with Plaintiffs’ inspection demand. However, Plaintiffs

incurred substantial attorney’s fees in having to institute the mandamus action to obtain

compliance with their inspection rights.

21. As stated above, Plaintiffs are members of Downey’s Caney Creek Club Lot Owners

Association, Inc. by virtue of their ownership of lots located within the Downey’s Caney Creek

Club subdivision of Matagorda County.

22. In or about February, 2010 and pursuant to the express provisions of the then-existing

bylaws of DCCCLOA, Plaintiff, Dittert, circulated a petition and obtained the signatures of over


fifty (50) DCCCLOA members, which requested the holding of a special meeting to discuss and

vote on a proposition requesting the removal of one or more directors of DCCCLOA and the

termination of Roxanne Williams as the DCCCLOA office manager. Plaintiff, Dittert, informed

the DCCCLOA Board and attempted to present the petition to DCCCLOA’s President, Joseph L.

Williams, on February 28, 2010 Article VIII, Section 3 of the DCCCLOA bylaws in effect at the

time states as follows:

“Special meetings of the members may be called by the Directors for any purpose

or purposes. Special meetings of the members shall be called by the President,

whenever as many as twenty-five (25) members in good standing shall so request

in writing, for the approval or disapproval by the membership of such

propositions as may be specified in such request. (emphasis added)”

Defendant, Williams, President of DCCCLOA, failed and refused to call the requested meeting,

so a follow-up letter was attempted to be delivered to Defendant, Williams, at his home on or

about March 13, 2010.

23. Defendant, Williams, President of DCCCLOA, refused to call the member- requested

special meeting and members of the DCCCLOA Board failed and refused to attend. Instead, on

or about March 18, 2010, within two weeks of the date of the requested meeting, the DCCCLOA

Board held a secret meeting and passed revisions to the DCCCLOA bylaws, which, in pertinent

part, now require the written request of one hundred (100) members in good standing to require

the President to call a special meeting.

24. Pursuant to Article VIII, Section 3 of the DCCCLOA bylaws in effect at the time,

Plaintiffs are entitled to the holding of the requested special meeting. Plaintiff, Dittert, obtained

the requisite twenty-five (25) signatures of members in good standing to compel such special


meeting by the DCCCLOA President. Plaintiffs no longer seek a writ of mandamus compelling

a special meeting because after the Plaintiffs instituted this lawsuit, and after one agreement read

into the record was not complied with by Defendants, Plaintiffs and Defendants entered an

Agreed Temporary Injunction signed by This Honorable Court on September 29, 2010 providing

for the holding of a special meeting/special meetings. However, Plaintiffs incurred substantial

attorney’s fees in seeking to obtain the holding of the special meeting that Plaintiffs were entitled

to under Article VIII, Section 3 of the 2001 DCCCLOA bylaws.

25. DCCCLOA is a Texas Nonprofit Corporation, whose members consist solely of owners

of lots located within the Downey’s Caney Creek Club subdivision of Matagorda County. The

exclusive purpose of the association is to enforce the deed restrictions of record, collect

maintenance fees and use the such fees for care, maintenance and beautification of the Downey’s

Caney Creek Club subdivision of Matagorda County.

26. The DCCCLOA’s authority is limited by whatever version of bylaws this Court deems to

have legal effect, as well as by Texas law and the periodic authority granted it by its members.

27. Defendants, as members of the Board of Directors of DCCCLOA, have participated in a

string of wrongful acts designed to entrench their positions on the Board, effectively eliminate

the members’ recourse to remove them, impose fines and fees upon the members, exclude

members from exercising their statutory and common law rights to inspection of the corporate

books and records, exclude members from exercising their rights to vote, and increase their

power as members of the Board.

28. In particular by way of example, on or about October 5, 2009, Plaintiff, Dittert, was sent

a letter noting a deed restriction violation in reference to two trailers/motor homes Ms. Dittert

had upon her lot and instructing her to remove a particular trailer. On or about November 17,


2009, Plaintiff, Dittert, received a certified letter stating that she had not corrected the

aforementioned violation and was being assessed a fifty dollar ($50.00) fine for administrative

costs and would be assessed a twenty-five dollar ($25.00) fine every fourteen (14) days until the

violation was remedied. The Defendant, DCCCLOA, lacked the authority to take such action(s).

29. In light of the accusations of unpaid maintenance fees and assessment of fines, Plaintiff,

Dittert, attempted to inspect the books and records of DCCCLOA during normal business hours,

in order to account for all monies billed to and paid by her to DCCCLOA. As indicated above,

Ms. Dittert was granted access to the office containing piles of documents purported to be the

DCCCLOA records. However, the Boards failure to maintain the books and records in an

orderly fashion, rendered Plaintiff, Dittert’s initial attempt at inspection virtually impossible. See

¶¶ 17-19 supra.

30. Following the events detailed in Paragraphs 22-24 supra, on March 13, 2010, Plaintiffs,

accompanied by a Matagorda County Deputy, attempted to deliver the follow-up letter

mentioned in Paragraph 22 to Defendant, Williams, at his home. Mr. Williams refused to accept

the document, but instead, made a documented terroristic threat against Plaintiff, Dittert and

other DCCCLOA members. When the deputy attempted to deliver the same document to Mr.

Williams, he again refused to accept it.

31. As related previously, on or about March 18, 2010, the Board of Directors held a secret

meeting and unlawfully revised the DCCCLOA bylaws to require the written request of one

hundred (100) members in good standing in order to compel the President to call a member-

requested special meeting.

32. Furthermore, the bylaws were also amended to allow the DCCCLOA Board to declare a

member not in good standing for delinquency of maintenance fees, late fees, penalty fees and


unresolved deed restrictions complaints. The amended bylaws would also expressly allow the

DCCCLOA Board to suspend the voting rights of any member who is past due on any

assessment levied by DCCCLOA and allow the Board to suspend the voting rights of a member

for a deed restriction infraction.

33. As a whole, these amendments to the bylaws effectively entrenched the DCCCLOA

Board, shielding them from accountability to the members and potential ouster.

34. Conveniently for Defendants, Plaintiffs have been informed that the DCCCLOA office

was “vandalized”, which Defendants now claim resulted in the destruction of and/or theft of all

corporate books and records, including those documents pertinent to Plaintiff, Dittert’s demand

for inspection. Defendants claim that such records were either stolen or destroyed by way of a

fire extinguisher being sprayed on them. Further, Plaintiffs are informed that the only laptop

computer containing the corporate books and records in electronic format was stolen during this

break-in, as well as the tape recorder and all tapes of the directors’ meetings, and that no back-up

of said books, records and/or documents exists. Surprisingly thereafter though, Plaintiff, Brown,

witnessed one or more Defendants removing several boxes of documents from the DCCCLOA

corporate offices. It is Plaintiffs’ firm belief that the alleged break-in was pretext to intentionally

destroy and/or conceal the tangible proof of Defendants’ unlawful misdeeds.

35. On information and belief, the DCCCLOA Board of Directors has engaged in a pattern of

numerous other wrongful acts and derelictions of their duties, including threats to file liens

against Plaintiffs’ properties, the actual filing of numerous improper liens against DCCCLOA

members’ properties under the auspices of past-due maintenance fees and other assessed fees,

failures to hold proper elections, failures to provide proper notices of meetings, votes and

actions, acting without proper authority, purchases greater than $10,000.00 without member


approval in violation of the bylaws, breaches of fiduciary and/or statutory duties and self-

dealing.

36. For example, on January 18, 2007 the Board unanimously voted to award Joseph

Williams with the mowing contract for the DCCCLOA under the context that the previous

person providing the mowing services, Ed Ellis, was “sick and cannot do it anymore.” Ed Ellis’s

fee for mowing was $45.00 per month. Joseph Williams’ fee for mowing was initially $165.00

per month, and within two months was increased to $265.00 per month, which is hardly a

competitive rate. Nonetheless, Ed Ellis continues to mow grass for Plaintiff Mary Ann Dittert

and other DCCCLOA members. Such a self-dealing transaction is not in good faith, nor made

with ordinary care, nor could be reasonably believed to be in the best interest of the DCCCLOA.

Furthermore, DCCCLOA has paid at least a portion of Roxanne Williams’, office manager and

wife of president Joseph Williams, social security and/or other taxes in 2009 and 2010, and

Roxanne Williams has accepted the property of James Worthy in exchange for payment of past

due assessments on the property, but such assessments have not been paid and no property

transfer fee was charged to this account, although such an improper transfer fee is charge to other

members upon transfer of their property.

37. Unfortunately, the books and records evidencing these actions had been improperly

withheld from Plaintiffs and other members of DCCCLOA, and were purportedly destroyed

and/or stolen. Defendants did eventually allow Plaintiffs to inspect the corporate books and

records, by providing boxes of documents for Plaintiffs to copy at the office of William

Pendergraft, Plaintiffs’ attorney at that time.

38. On July 9, 2010, in an agreement read into the record, Plaintiffs and Defendants agreed

on a Temporary Injunction, and Defendants agreed to hold the special meeting on October 2,


2010, that Plaintiffs’ had requested through their Verified Petition for Writ of Mandamus on

Special Meeting. The transcript from the agreement in open court clearly states the intentions of

both parties to have this agreement be a temporary injunction.

39. As part of the agreement read into the record, Defendants agreed to produce a list of all

members of the DCCCLOA that they believe are in bad standing, along with a breakdown of any

assessments, dues, or charges they contend puts them in bad standing. Said list was agreed to be

produced by August 2, 2010. Unfortunately, said list was not produced to Plaintiffs until August

17, 2010, two weeks later than agreed upon. Further, said list did not include a breakdown of

assessments, dues and/or charges in that it simply had a column of amounts owed as of August,

2005 without any explanation.

40. On September 14, 2010, counsel for both sides agreed upon and executed a Rule 11

agreement regarding the sending of ballots and notices to all members of the DCCCLOA

regardless of whether Defendants consider them in good or bad standing, and agreed to resolve

the issues surrounding the good or bad standing of members, with court assistance if necessary,

prior to the October 2, 2010 special meeting. This agreement obviously contemplated the vote to

occur on October 2, 2010, as was agreed to in open court. Attached hereto and incorporated

herein as Exhibit A is a true and correct copy of the July 9, 2010 transcript entitled “Agreement

on Temporary Injunction.” The court record states in relevant part: “…we’re going to have this

as an agreed injunction that is going to last from this date through October 2 when this meeting,

which will be part of our further agreement, takes place.” Exhibit A (p.1, line 20-23). Further,

“…there will be a notice to all of the members that there will be a special meeting that is to take

place on October 2nd…” Exhibit A (p.4, line 21-23). The record further states “…at that October

2nd special meeting, we will hold those elections and do those thins and the governing bylaws for


purposes of that meeting will be the 2001 version of the bylaws.” Exhibit A (p.5, line 14-17).

Attached hereto and incorporated herein as Exhibit B is a true and correct copy of the September

14, 2010 Rule 11 agreement.

41. Only two days after Defendants entered into the Rule 11 agreement with Plaintiffs, on

September 16, 2010, Defendants informed Plaintiffs that Defendants planned to seek a

continuance of the October 2, 2010 meeting, and that Defendants did not intend to send out the

notices and ballots by September 17, 2010. Notices and ballots were not sent out by the

Defendants on or prior to September 17, 2010. The notices and ballots would have been required

to be sent out at least 15 days prior to the meeting under Article XIII, Section5 of the bylaws

agreed to be in effect for the special meeting. Therefore, Defendants unilaterally breached the

express terms of the July 9, 2010 Rule 11 Agreement, and caused a de facto cancellation of the

special meeting agreed to be held on October 2, 2010. The special meeting did not occur on

October 2, 2010.

42. On July 1, 2009, This Honorable Court entered a Temporary Restraining Order in this matter.

43. On September 29, 2010, an Agreed Temporary Injunction was signed by the parties and by

This Honorable Court.

B. DECLARATORY JUDGMENT

44. As shown herein, justiciable issues regarding the rights and status of the member

Plaintiffs under the bylaws of DCCCLOA exist. Pursuant to Chapter 37 of the Texas Civil

Practice & Remedies code, Plaintiffs seek a declaratory judgment determining:

a. whether Plaintiffs are entitled to the requested special meeting to discuss and vote

on a proposition requesting the removal of one or more Directors and the termination of Roxanne

Williams as the DCCCLOA office manager under the By-Laws of Downey’s Caney Creek Club


Lot Owners Association;

b. whether Plaintiff, Dittert, and other DCCCLOA members are entitled to

inspection of the corporate books and records;

c. whether Defendants have the right to suspend the voting rights of members under

the authority they now purport to have;

d. whether Defendants lack authority to impose or assess any fees other than the

yearly maintenance fees pursuant to the restrictive covenants of record;

e. an order declaring any and all fees and fines imposed on members except for the

yearly maintenance fees prescribed in the restrictive covenants of record to be invalid;

f. an order requiring sums charged for any and all fees and fines imposed on

members except for the yearly maintenance fees prescribed in the restrictive covenants of

record to be credited to members’ accounts or refunded if such amounts have been

already paid;

g. whether Defendants lacked the authority to file the liens on the property of

DCCCLOA members as they have; and

h. an order declaring that any liens filed as a result of fees assessed against previous

owners are void where the property was purchased by the new owner at a tax sale or

foreclosure sale by a bona fide mortgagee and the lien was filed after purchase at such a

sale;

i. which set of bylaws, if any, are properly in effect and binding upon the members

and directors of DCCCLOA

j. an order declaring that any Director who has exceeded their term limitation under

the effective bylaws is ineligible to run for re-election in the next election of members to


the Board of Directors.

43. Plaintiffs request permanent injunctive relief to effectuate the Court’s declaratory

judgment, and to require future compliance with the DCCCLOA bylaws and rulings of this

Court.

44. Pursuant to §37.009 of the Texas Civil Practice & Remedies Code, Plaintiffs are entitled

to an award of attorney’s fees and costs incurred through trial and any subsequent appeal of this

matter.

C. BREACH OF FIDUCIARY DUTIES/ STATUTORY DUTIES

45. Plaintiffs bring a derivative claim on behalf of DCCCLOA against the Defendants for

ultra vires acts, breach of fiduciary duties and/or breach of statutory duties. Plaintiffs have

standing to bring a derivative claim because they are currently members of DCCCLOA, were

members at the time of the acts complained of, all collectively and individually fairly and

adequately represent the interests of DCCCLOA in enforcing its rights and the rights of

DCCCLOA members.

46. Demand that this action be brought by DCCCLOA was not made, as such demand would

be futile under the circumstances. The directors complained of and named as Defendants in this

case are the current Directors and face personal liability for their malfeasance. Should the Court

determine that demand is required, Plaintiffs ask the Court to abate the derivative portion of their

claims for a sufficient period of time to effectuate such demand. Furthermore, the actions of the

Board of Directors were previously uncooperative in preventing members from inspecting the

corporate books and of secretively amending the bylaws in attempt to override the members’

right to call a special meeting, failing to properly hold meetings, failure to abide by

DCCCLOA’s bylaws, combined with the mysterious destruction and theft of the corporate


records, are sufficient to show a reasonable doubt that the directors are disinterested and

independent.

47. As Directors of the corporation, Defendants, Williams, Vann, Blankenship, Cox, Kathy

King, Charles King and Fucik, owed fiduciary duties to the corporation and/or statutory duties to

the corporation under §22.221 of the Texas Business and Organizations Code. In addition and/or

in the alternative, Defendants, Williams, Vann, Blankenship, Cox, Kathy King, Charles King and

Fucik, owed fiduciary duties to the Plaintiffs and members of DCCCLOA. Defendants,

Williams, Vann, Blankenship, Cox, Kathy King, Charles King and Fucik, have breached their

fiduciary duties of loyalty, good faith and fair dealing to DCCCLOA, the Plaintiffs and all other

members of DCCCLOA, and/or their statutory duties of good faith, ordinary care, and acting in a

manner reasonably believed to be in the best interest of the corporation. Defendants also owe

Plaintiffs fiduciary duties of good faith and fair dealing directly as a result of Plaintiffs position

as members of the association, and Plaintiffs assert their direct claims for breach of these duties.

48. Such breaches of fiduciary and/or statutory duties include, but are not limited to the

following ultra vires acts: the failure to call and hold a special meeting at the request of the

requisite number of members, failing to abide by the bylaws of the association, failing to hold

proper elections, failing to provide proper notices of meetings, votes and actions, failure to allow

members to inspect the corporate books and records, acting without proper authority, making

purchases of over $10,000.00 without approval by the members, self-dealing, entrenchment, and

the imposition of fines and fees against the members’ properties without authority to do so.

DCCCLOA and the Plaintiffs have suffered injury as a result of said breaches. The Directors

repeated failures to abide by the bylaws of the DCCCLOA is not in good faith, is a violation of

ordinary care, and cannot possibly have been reasonably believed to be in the best interest of the


DCCCLOA. Further, the self-dealing transaction of Joseph Williams involving the mowing

contract was not in good faith, nor made with ordinary care, nor could be reasonably believed to

be in the best interest of the DCCCLOA, nor was the DCCCLOA’s payments of Roxanne

Williams’ taxes.

49. As a direct and proximate result of the actions of the Defendants, which constitute ultra

vires acts, breach of fiduciary duties, breach of good faith and loyalty, and/or breach of statutory

duties, Plaintiffs are entitled to an award of actual damages, and attorney’s fees under §38.001

for action brought to enforce a written contract, in this case, namely, the bylaws of DCCCLOA.

Money damages are not a necessary prerequisite to recovery of attorney’s fees under §38.001

where injunctive relief is sought. See Rasmusson v. LBC Petrounited, Inc., 124 S.W.3d 283, 287

(Tex.App.—Houston [14th Dist.] 2003). Because Defendants acted knowingly, intentionally,

maliciously, and with reckless disregard of Plaintiffs’ rights, Plaintiffs are entitled to exemplary

damages.

50. Plaintiffs seek permanent injunctive relief prohibiting Defendants from breaching their

fiduciary and statutory duties, and require the Defendants to obey the DCCCLOA bylaws with

regards to meetings, notices, creation and imposition of fees and assessments, directors’ terms,

association purchases, and general conformity with the bylaws.

51. Because the purpose of this action is to protect the association from Defendants’ breaches

of their duties of loyalty to the association, and other duties, Plaintiffs are also entitled to

attorney’s fees under the substantial benefit doctrine.

D. BREACH OF CONTRACT/RULE 11 AGREEMENT

52. On July 9, 2010, Plaintiffs and Defendants entered into a valid, enforceable Rule 11

Agreement by reading the terms of the agreement into the record in open court as required by


Texas Rule of Civil Procedure 11. Plaintiff fully performed and abided by the terms of the

agreement. By the acts alleged herein, the Defendants materially breached the agreement read

into the record on July 9, 2010, in which the Defendants agreed to hold the special meeting

regarding discussion and vote on removal of one or more directors of the DCCCLOA on October

2, 2010. Defendants unilateral act of refusing to send notices and ballots by September 17, 2010

made it impossible to hold the special meeting on October 2, 2010, and said meeting was not, in

fact, held on October 2, 2010 despite their express promise to do so. Plaintiffs are entitled to

recover their actual damages, including, among other damages, attorney’s fees incurred at

additional hearings and pleadings before the court seeking enforcement of the agreement.

of Plaintiffs’ membership rights. Because Defendants acted knowingly, intentionally,

maliciously, and with reckless disregard of Plaintiffs’ rights, Plaintiffs are entitled to exemplary

damages.

53. Plaintiffs seek permanent injunctive relief requiring defendants to abide by the

agreements made between Plaintiffs and Defendants in this action.


VII. PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiffs respectfully pray that the

Defendants be cited to appear and answer. Plaintiffs further pray that upon trial on the

merits for all other claims, judgment be entered in favor of Plaintiffs for actual damages,

exemplary damages, prejudgment and post-judgment interest, attorney’s fees, costs of

court, permanent injunctive relief, and for such other and further relief to which Plaintiffs

may be justly entitled, whether general, special or equitable.

Respectfully Submitted, FRYAR LAW FIRM, P.C.

_______________________________ F. Eric Fryar Texas Bar No. 07495770 Email: [email protected] Matthew M. Buschi Texas Bar No. 24064982 Email: [email protected] 1001 Texas Ave., Suite 1400 Houston, Texas 77001-3194 Tel. (281) 715-6396 Fax (281) 715-6397 ATTORNEY IN CHARGE FOR

PLAINTIFFS MARY ANN DITTERT, RUTH RISINGER, and LAMAR BROWN


CERTIFICATE OF SERVICE

I certify that a copy of the foregoing instrument was served on all parties and counsel of record pursuant to the Texas Rules of Civil Procedure as indicated below: [ ] certified U.S. mail, return receipt requested on November 15, 2010. [ ] email service by agreement on November 15, 2010 [X] telephonic document transfer on November 15, 2010 before 5:00 p.m. [ ] personal delivery on November 15, 2010. [ ] courier receipted delivery by ____ on November 15, 2010 [ ] email or eservice by agreement on November 15, 2010

_______________________________ Matthew M. Buschi

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Documents

CAUSE NO. 10-E-0334-C MARY ANN DITTERT, … · RAYMOND KING, C.J. FUCIK, and DOWNEY’S CANEY CREEK CLUB LOT OWNERS ASSOCIATION, INC. Defendants § § § § § § § ... or about