FILED
`DALLAS COUNTY
`12/9/2019 3:40 PM
`FELICIA PITRE
`ITCLERK
`DI
`.
`Darllng Tell ez
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`ROUNDTREE AUTOMOTIVE
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`IN THE DISTRICT COURT OF
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`CAUSE NO. DC-19-09051
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`GROUP LLC,
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`Plaintiff,
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`v.
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`MATTHEW STINSON, NSOH
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`HOLIDAY ROAD, LLC, and
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`NSOH HOLIDAY ROAD 11, LLC,
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`Defendants.
`
`cmcmcmcmomcmcmcmomamomom
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`DALLAS COUNTY, TEXAS
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`192nd JUDICIAL DISTRICT
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`PLAINTIFF ’8 FIRST AMENDED PETITION AND
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`RE! QUEST FOR DECLARATORY JUDGMENT
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`Plaintiff Roundtree Automotive Group LLC (“Roundtree”) files this First Amended
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`Petition and Request for Declaratory Judgment.
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`I.
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`Introduction
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`1.
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`This lawsuit seeks to recover property and amounts Defendants Matthew Stinson,
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`NSOH Holiday Road, LLC (“NSOH”), and NSOH Holiday Road 11, LLC (“NSOHII,” collectively
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`with Matthew Stinson and NSOH, “Defendants? wrongfully directed away from Roundtree while
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`Matthew Stinson served as its Chief Executive Officer.
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`II.
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`Discovery Control Plan
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`2.
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`Pursuant to Texas Rule of Civil Procedure 190.4, Roundtree intends to conduct
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`discovery under a Level 3 Discovery Control Plan.
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`111.
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`Parties
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`3.
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`Roundtree is a Louisiana limited liability company. The members of Roundtree
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`include Frank Stinson, Brenda Stinson, Matthew Stinson, Audra E. Stinson, and Laura S. Bennett,
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`who are all Texas residents, and Joshua B. Stinson, who is a Virginia resident.
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`Plaintiff’s First Amended Petition and
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`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 1 of 10
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`4.
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`Matthew Stinson is a Texas resident and can be served by and through his counsel
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`of record.
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`5.
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`NSOH is a Texas limited liability company and can be served by and through its
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`counsel of record.
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`6.
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`NSOH II is a Texas limited liability company and can be served by and through its
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`counsel of record.
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`IV.
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`Jurisdiction and Venue
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`7.
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`This Court has jurisdiction over the parties as each is a Texas citizen, maintains a
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`principal place of business in Texas, or has voluntarily submitted to this Court’s jurisdiction.
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`Further, this Court has jurisdiction over the parties as each has done business in Texas and/or
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`because each of the parties has had sufficient minimum or continuing contacts With Texas.
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`8.
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`Subject matter jurisdiction of this case is proper because the amount in controversy
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`exceeds the minimum jurisdictional limits of the Court.
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`9.
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`Pursuant to Texas Civil Practice and Remedies Code §15.002(a)(l), venue is proper
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`in this district because Dallas County is the county in which all or a substantial part of the events
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`or omissions giving rise to the claims alleged herein occurred.
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`V.
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`Rule 47 Statement
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`10.
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`Pursuant to Texas Rule of Civil Procedure 47, Roundtree seeks monetary relief over
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`$1,000,000.00. Roundtree also seeks nonmonetary relief.
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`VI.
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`Background
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`11.
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`Founded by Frank Stinson in 1985, Roundtree is a holding company for a chain of
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`retail automotive-related companies with its corporate headquarters in Dallas, Texas. With CEO
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`Frank Stinson at its helm, Roundtree operated storefronts from California to Alabama. In its prime,
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`Plaintiffs First Amended Petition and
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`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 2 of 10
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`Roundtree generated over half a billion dollars in revenue annually and consistently ranked as one
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`of the top 100 dealer groups in the United States.
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`12.
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`In 2012, health issues necessitated Frank Stinson’s leave of absence from
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`Roundtree. During this medical leave of absence, Matthew Stinson, Frank Stinson’s son, was
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`appointed as CEO for Roundtree.
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`13.
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`Frank Stinson returned to Roundtree in October 2018, only to discover that the
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`once-strong dealer group he spent a lifetime building was on the precipice of financial ruin. An
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`investigation and review of Roundtree’s files and financial documents revealed that, under the
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`direction of Matthew Stinson as CEO, Roundtree engaged in lavish spending.
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`14.
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`In addition to his handsome salary as Roundtree’s CEO, Matthew Stinson took
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`advantage of and abused his position, directing the payments fiom Roundtree’s accounts to acquire
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`substantial amounts of property, including houses, high-end jewelry, guns, boats, cars, and custom
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`golf carts. Despite paying for this property, none of it is held in Roundtree’s name.
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`15.
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`For example, Matthew Stinson directed that Roundtree spend over $2.4 million to
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`acquire a 1.26 acre lake house property located at 13380 Waterside Ct, Malakoff, TX 75148 (the
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`“Lake House”) (held in the name of NSOH 11, an entity owned or controlled by Matthew Stinson)
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`and a .775 acre empty lot in the same area (the “Lake Lot”) (held in NSOH’s name, an entity owned
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`or controlled by Matthew Stinson) (the Lake House and the Lake Lot collectively, the “Lake
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`Properties”). Roundtree also spent over $600,000 to acquire a residence located at 3528 Marquette
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`Street, Dallas, Texas 75225 (the “Dallas Progerfl”) (held in Matthew Stinson’s name) (the Lake
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`Properties and the Dallas Property collectively, the “Progertz'es”). Roundtree directly paid the
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`property taxes, mortgage and escrow bills, construction and renovation invoices, and other
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`maintenance and day—to—day expenses for the Properties.
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`Plaintiffs First Amended Petition and
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`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 3 of 10
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`16.
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`Matthew Stinson also had Roundtree pay for his day-to-day and personal expenses,
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`such as groceries, household bills, luxury vacations, and event tickets. Acting as Roundtree’s CEO,
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`Matthew Stinson even directed Roundtree funds to his personal accounts.
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`17.
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`The total amount Roundtree paid to acquire the Properties, high-end jewelry, guns,
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`boats, cars, and custom golf carts, and the amount of Matthew Stinson’s personal expenses paid
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`with Roundtree funds, is presently unknown. It is clear, however, that Roundtree owns the Lake
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`Lot and the Dallas Property, yet it does not hold title to these properties.
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`18. Without Roundtree’s consent, Matthew Stinson marketed the Lake Properties and
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`the Dallas Property for sale, and sold the Lake House on or about May 15, 2019. Roundtree never
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`received any proceeds from the sale of the Lake House. The inescapable conclusion is that
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`Matthew Stinson is liquidating assets to put them beyond the reach and jurisdiction of this Court
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`and Roundtree—the true owner of the Properties.
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`VII.
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`Causes of Action
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`A. Money Had and Received (Against Defendants)
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`19.
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`Roundtree re-alleges and incorporates by reference all facts and allegations set forth
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`above.
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`20.
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`To the extent that Matthew Stinson, NSOH, and NSOH II are holding monies,
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`property received as money, or property converted to money, including without limitation, the
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`Properties, furniture, jewelry, boats, cars, golf carts, or personal items that Matthew Stinson took
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`possession of and sold without remitting payment to Roundtree, such monies belong to Roundtree
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`in equity and good conscience.
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`Plaintiffs First Amended Petition and
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`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 4 of 10
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`B. Breach of Fiduciary Duty (Against Matthew Stinson)
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`21.
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`Roundtree re-alleges and incorporates by reference all facts and allegations set forth
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`above.
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`22.
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`By virtue of Matthew Stinson’s position as CEO of Roundtree, and as a result of
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`the high degree of confidence Roundtree placed in him, Roundtree entrusted Matthew Stinson with
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`access to and control of its finances. By doing so, Roundtree relied on Matthew Stinson to act in
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`Roundtree’s best interest and protect Roundtree’s property. Through his unauthorized, unlawful,
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`and self-interested use of Roundtree’s assets and the damages resulting therefrom, Matthew
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`Stinson knowingly, intentionally, and maliciously breached his fiduciary duties to Roundtree.
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`23.
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`Matthew Stinson breached his duty of loyalty and utmost good faith, duty of candor,
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`duty to refrain from self-dealing, duty to act with integrity, duty of fair and honest dealing, duty
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`of full disclosure, duty to account for all corporate profits and property, and duty not to usurp
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`corporate opportunity for personal gain.
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`24.
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`Roundtree’s injury resulted from Matthew Stinson’s malice, fraud, or gross
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`negligence, for which Roundtree seeks its full remedies, including without limitation, exemplary
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`damages under Texas Civil Practice & Remedies Code § 41 .003 (a).
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`C. Knowingly Participating in Breach of Fiduciary Duty (Against NSOH and NSOH II)
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`25.
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`Roundtree re-alleges and incorporates by reference all facts and allegations set forth
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`above.
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`26.
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`NSOH and NSOH II knew Matthew Stinson owed fiduciary duties to Roundtree.
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`NSOH and NSOH II proceeded to knowingly participate in Matthew Stinson’s breach of his
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`fiduciary duties to Roundtree.
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`Plaintiffs First Amended Petition and
`
`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 5 of 10
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`27.
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`As a result, NSOH and NSOH II are jointly and severally liable for Roundtree’s
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`damages stemming fiom Matthew Stinson’s breach of fiduciary duties.
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`D. Constructive Trust as to Real Property
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`28.
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`Roundtree re-alleges and incorporates by reference all facts and allegations set forth
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`above.
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`29.
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`As explained above, Roundtree and Matthew Stinson had a fiduciary relationship
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`due to Matthew Stinson’s position as CEO. Matthew Stinson knowingly,
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`intentionally, and
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`maliciously breached the fiduciary duties he owed to Roundtree as its CEO. Due to this breach of
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`his fiduciary duties owed to Roundtree, Matthew Stinson obtained the Lake Lot and the Dallas
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`Property and then wrongfully held them in his own name, and therefore was unjustly enriched with
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`these properties which were directly purchased by Roundtree with its funds and are directly
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`traceable to Roundtree’s accounts.
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`30.
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`As a result, the Lake Lot and the Dallas Property should be held in trust for
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`Roundtree’s benefit as the owner of the properties.
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`E. Constructive Trust as to Other Property
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`31.
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`Roundtree re-alleges and incorporates by reference all facts and allegations set forth
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`above.
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`32.
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`As explained above, Roundtree and Matthew Stinson had a fiduciary relationship
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`because of Matthew Stinson’s position as CEO. Matthew Stinson knowingly, intentionally, and
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`maliciously breached the fiduciary duties he owed to Roundtree. Due to this breach in fiduciary
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`duties owed to Roundtree, Matthew Stinson wrongfully detained funds and property belonging to
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`Roundtree, and therefore was unjustly enriched with such property and finds which were directly
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`purchased by Roundtree with its funds and are directly traceable to Roundtree’s accounts.
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`Plaintiffs First Amended Petition and
`
`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 6 of 10
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`33.
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`As a result, this property, and any other purchases and investments made with
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`Roundtree funds, or proceeds therefrom (including but not limited to funds from the sale of the
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`Lake House), should be held in trust for Roundtree’s benefit as the owner of such property.
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`F. Declaratory Judgment
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`34.
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`Roundtree re-alleges and incorporates by reference all facts and allegations set forth
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`above.
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`35.
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`Despite the fact that Roundtree purchased the Properties, Roundtree has not
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`received title to these properties or any money resulting from the sale thereof. There is a genuine
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`conflict involving the ownership thereof.
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`36.
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`Roundtree likewise has not received title to or possession of the high-end jewelry,
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`guns, boats, cars, and custom golf carts it purchased, either in whole or in part, and there is a
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`genuine conflict involving the ownership thereof.
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`37.
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`To the extent that Roundtree purchased any other property or made any other
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`expenditures with Matthew Stinson acting as CEO, those properties (and any money resulting from
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`the sale(s) thereof) also belong to Roundtree and do not belong to Matthew Stinson, NSOH, or
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`NSOH ll.
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`38.
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`Roundtree seeks declaratory relief regarding its rights and interests in the above-
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`referenced properties. Specifically, Roundtree seeks declarations that:
`
`o
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`0
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`0
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`Roundtree owns the Dallas Property in whole or in part.
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`Roundtree owns the Lake Lot in whole or in part.
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`Roundtree owns the proceeds from the sale of any property, real or personal,
`paid for by Roundtree (including but not limited to the Lake House).
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`Plaintiffs First Amended Petition and
`
`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 7 of 10
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`o
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`Roundtree owns, in whole or in part, any other property or items which were
`paid for by Roundtree and are held nominally in the name of Matthew
`Stinson, NSOH, and/or NSOH II.
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`39.
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`Additionally, pursuant to Texas Civil Practice & Remedies Code section 37.009,
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`Roundtree seeks costs and reasonable and necessary attorney’s fees as are equitable and just.
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`VIII.
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`Conditions Precedent
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`40.
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`All conditions precedent to Roundtree’s recovery have occurred or have been
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`performed.
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`41.
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`Roundtree has joined all indispensable parties under Texas Rule of Civil Procedure
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`39.
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`above.
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`IX.
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`Attorneys’ Fees
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`42.
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`Roundtree re-alleges and incorporates by reference all facts and allegations set forth
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`43.
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`Because of Defendants’ misconduct, Roundtree has been forced to retain counsel
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`and proceed with this litigation. Roundtree prays that it recovers all such fees incurred herein as
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`permitted by law and in equity.
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`X.
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`Prayer for Relief
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`44.
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`Roundtree respectfully requests that the Court:
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`0
`
`0
`
`c
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`Find Matthew Stinson, NSOH, and NSOH II liable for Money Had and
`Received;
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`Find Matthew Stinson liable for Breach of his Fiduciary Duties to
`Roundtree;
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`Find NSOH and NSOH ll jointly and severally liable for Matthew Stinson’s
`Breach of his Fiduciary Duties;
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`0 Award all actual damages incurred by Roundtree;
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`Plaintiffs First Amended Petition and
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`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 8 of 10
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`
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`
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`
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`
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`
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`Impose a constructive trust, for Roundtree’s benefit as the true owner, as to
`the Lake Lot and the Dallas Property;
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`Impose a constructive trust, for Roundtree’s benefit, as to the proceeds from
`the sale of the Lake House;
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`Impose a constructive trust, for Roundtree’s benefit, as to all property or
`items which were paid for by Roundtree and are held nominally in the name
`of Matthew Stinson, NSOH, and NSOH II;
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`Impose a constructive trust, for Roundtree’s benefit, as to the proceeds from
`the sale(s) of any other purchases and investments made with Roundtree
`funds.
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` Grant a declaratory judgment under the Declaratory Judgment Act, Chapter
`37 of the Texas Civil Practice & Remedies Code, declaring that Roundtree
`owns the Lake Lot and the Dallas Property in whole or in part;
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` Grant a declaratory judgment under the Declaratory Judgment Act, Chapter
`37 of the Texas Civil Practice & Remedies Code, declaring that Roundtree
`owns the proceeds from the sale of the Lake House in whole or in part;
`
` Grant a declaratory judgment under the Declaratory Judgment Act, Chapter
`37 of the Texas Civil Practice & Remedies Code, declaring that Roundtree
`owns all other property that Roundtree purchased or invested in due to
`Matthew Stinson’s wrongful acts;
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` Grant a declaratory judgment under the Declaratory Judgment Act, Chapter
`37 of the Texas Civil Practice & Remedies Code, declaring that Roundtree
`owns the proceeds from the sale(s) of any property, real or personal, paid
`for by Roundtree;
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` Order a conveyance to Roundtree of all property and purchases or
`investments made with Roundtree funds;
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` Award all reasonable and necessary attorneys’ fees incurred by Roundtree;
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` Award punitive and exemplary damages; and
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` Award Roundtree all further relief in law or in equity to which it is justly
`entitled.
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`Plaintiff’s First Amended Petition and
`Request for Declaratory Judgment
`4827-2417-4510.7
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`Page 9 of 10
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`Respectfully submitted,
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`/s/ Steven C. Lockhart
`By:
`Steven C. Lockhart
`
`State Bar No. 24036981
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`slockhart@foleycom
`Frank J. Wright
`State Bar No. 22028800
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`fwfi ghtchfoleycom
`Andrew A. Howell
`
`State Bar No. 24072818
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`ahowell@foley.com
`FOLEY GARDERE
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`FOLEY & LARDNER LLP
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`2021 McKinney Avenue, Suite 1600
`Dallas, Texas 75201
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`Telephone:
`Facsimile:
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`(214) 999-3000
`(214) 999-4667
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`ATTORNEYS FOR PLAINTIFF
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`ROUNDTREE AUTOMOTIVE GROUP LLC
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`CERTIFICATE OF SERVICE
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`A true and correct copy of the foregoing was served on counsel of record electronically on
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`December 9, 2019.
`
`
`/s/ Steven C. Lockhart
`
`Steven C. Lockhart
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`Plaintiff’s First Amended Petition and
`
`Request for Declaratory Judgment
`4827-2417-4510]
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`Page 10 0f 10
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