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2/18/2015 1:32:19 PM

Chris Daniel - District Clerk Harris County


Envelope No. 4194303
By: Adiliani Solis
Filed: 2/18/2015 1:32:19 PM

Cause No. 2015-00749

281st JUDICIAL DISTRICT

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NUEVA GENERACION MUSIC GROUP,


MARTIN ALFONSO FABIAN RAMOS,
aka MARTIN FABIAN, 24-HOUR MUSIC,
LLC, MINITOS MUSICAL, S.A. de C.V.
Each, third-party Defendant

HARRIS COUNTY, TEXAS

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vs
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ISIDRO CHAVEZ ESPINOZA p/k/a
ESPINOZA PAZ
Defendant and Counter-plaintiff
v.

IN THE DISTRICT COURT OF

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NUEVA GENERACION MUSIC GROUP

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FIRST AMENDED ANSWER


AND AFFIRMATIVE DEFENSES
TO PLAINTIFFS ORIGINAL PETITION
AND COUNTERCLAIM

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COMES NOW Isidro Chavez Espinoza, p/k/a Espinoza Paz (hereafter, PAZ), by and

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through his attorney of record, and files this Answer and Affirmative Defenses to Plaintiffs

I.
GENERAL DENIAL

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Original Petition and Counterclaim and would respectfully show the Court as follows:

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Pursuant to Rule 92 of the Texas Rules of Civil Procedure, Defendant denies generally
each and every allegation contained in Plaintiffs Original Petition, and any amendments and
supplements thereto, and demands strict proof thereof by a preponderance of the evidence.

ANSWER AND COUNTERCLAIM


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II.
AFFIRMATIVE DEFENSES
1.

As the First Affirmative Defense, Defendant asserts a Failure to State a Cause of Action.

Plaintiff has failed to state a cause of action upon which relief can be granted. The Plaintiff fails

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to allege with specificity any factual allegations to establish the requisite elements. The Plaintiff
fails to set forth ultimate facts to show that the Plaintiff is entitled to relief.
2.

As the Second Affirmative Defense, the Defendant asserts Unclean Hands. The actions

As the Third Affirmative Defense, the Defendant asserts Estoppel and states that the

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from seeking relief and the claim should be dismissed.

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of the Plaintiff should bar recovery in this action. The Plaintiffs wrongful conduct precludes it

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Plaintiff is barred, in whole or in part, from recovery to the extent that it or its agents or real

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parties in interest have made statements or taken actions which estop them from asserting the

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As the Fourth Affirmative Defense, the Defendant asserts that the Plaintiffs claims are

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claims.

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fraudulent, in that the Plaintiff deliberately failed to fully and faithfully perform its duties, to the

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detriment of the Defendant, and is therefore not entitled to any of the relief or damages sought in

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As the Fifth Affirmative Defense, the Defendant asserts Accord and Satisfaction. The

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its complaint.

parties entered into a contract, express or implied, in which the parties agree to the discharge of a
previously existing obligation by means of a lesser payment tendered and accepted.
6.

As the Sixth Affirmative Defense, the Defendant asserts Equitable Estoppel. The

Plaintiff made one or more false representation(s) of material fact, with the knowledge, actual or
constructive, of those facts, and with the intention that these should be acted on, to a party
ANSWER AND COUNTERCLAIM
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(Defendant) without knowledge or means of obtaining knowledge of the facts, who detrimentally
relied upon Plaintiffs representation(s).
7.

As the Seventh Affirmative Defense, the Defendant asserts Failure of Consideration.

Failure of Consideration exists because after the agreement was reached, Plaintiffs promised

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performance failed.

As the Eighth Affirmative Defense, the Defendant asserts Failure to Satisfy a Condition

Precedent. Events that were to happen or be performed before Plaintiff accrued a right to

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enforce the obligation in question constituted a condition precedent that was never satisfied.
As the Ninth Affirmative Defense, the Defendant asserts Illegality.

10.

As the Tenth Affirmative Defense, the Defendant asserts Mistake. The contract in

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9.

As the Eleventh Affirmative Defense, the Defendant asserts quasi estoppel. It would be

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question incorrectly reflects the true agreement because of a mutual mistake.

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unconscionable to allow Plaintiff to maintain a position inconsistent with one to which he

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acquiesced, or from which he accepted a benefit.


As the Twelfth Affirmative Defense, the Defendant asserts Setoff and Recoupment.

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The facts having not been fully developed, Defendant affirmatively pleads any of the

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following defenses that may become applicable to this action: accord and satisfaction, arbitration

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and award, assumption of risk, coercion, contract, contributory negligence, discharge in


bankruptcy, duress, economic duress, election of remedies, estoppel, failure of consideration,
illegality, laches, license, payment, release, res judicata, satisfaction, statute of frauds, waiver,
the failure of Plaintiff to mitigate damages, and any other matter constituting an avoidance or
affirmative defense. The Defendant reserves the right to supplement this Answer with any
additional Affirmative Defenses he may assert.
ANSWER AND COUNTERCLAIM
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14.

Plaintiffs own conduct is the proximate cause of any damages sustained.

III.
REQUEST FOR DISCLOSURE
Under Texas Rules of Civil Procedure 194, the Defendant requests that the Plaintiff

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disclose, within thirty days of the service of this request, the information or material described in
Rule 194.2.

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IV.
COUNTERCLAIM

Counterclaimant requests discovery to be conducted in accordance with a Level 3

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DISCOVERY LEVEL

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Discovery Control Plan under Civil Procedure Rule 190.3.

Counter-defendant Martin Alonso Fabian Ramos (FABIAN) is an individual believed

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JOINED PARTIES

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to be residing in Irving, Texas and who regularly does business in Harris County, Texas, who
can be served with process on his attorney Yocel Alonso at 130 Industrial Blvd, Suite 110, Sugar

Counter-Defendant 24-Hour Music, LLC (24-HOUR) is a Texas Corporation and can

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Land, Texas 77487, or in any other manner authorized by statute.

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be served with process through its registered agent, Dinorah Pena-Duran at 1212 Corporate
Drive, Ste 170, Irving, Texas 75038, or in any other manner authorized by statute.
19.

Counter-Defendant Minitos Musical S.A. de C.V. (MINITOS) is a Mexican

corporation which can be served with process through its managing member, Martin Alonso

ANSWER AND COUNTERCLAIM


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Fabian Ramos at 4416 Windsor Ridge Drive, Irving, Texas 75038, or in any other manner
authorized by statute.
20.

Counter-plaintiff believes and based on such information and belief avers that all

Counter-defendants, NUEVA, 24-HOUR, MINITOS and FABIAN, and each of them, are and at

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all material times have been, the agents, servants or employees of each other, purporting to act
within the scope of said agency, service or employment in performing the acts and omitting to
act as averred herein.

Each of the Counter-defendants named herein is believed to, and is alleged to have been,

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acting in concert with, as an employee, agent, co-conspirator or member of a joint venture of,

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each of the other Counter-defendants, and are therefore alleged to be jointly and severally liable

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for the claims set forth herein, except as otherwise alleged.

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Counter-plaintiff, PAZ, is a popular Mexican singer/songwriter, who seeks to recover

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STATEMENT OF FACTS

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damages from Counter-defendants, his talent agents and their associates, who betrayed his trust

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and embezzled from him substantial amounts of money and other valuables. PAZ seeks to

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recover damages based on Counter-defendants conversion, breach of fiduciary duties and fraud.

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Counter-plaintiff also seeks rescission of contract based on Counter-defendants fraud, and an

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accounting against Counter-defendants.


Counter-Defendant Nueva Generacion Music Group, Inc. (NUEVA) was, at the time it

first contracted with Counter-plaintiff, a California corporation headquartered in the County of


Los Angeles, State of California. NUEVAs principal business was that of representing musical
artists as talent agent. On or about June 27, 2007 NUEVA merged out of California and into its
affiliate, NUEVA Music Group, Inc., a Texas corporation. Said Texas entity was organized after
ANSWER AND COUNTERCLAIM
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the parties had contracted and with the evident purpose of circumventing California law
applicable to talent agents. FABIAN is the face of NUEVA and is its president, founder, and
majority stakeholder.
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PAZ met Counter-Defendant FABIAN, in or around the month of December 2006. PAZ

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was at the time an aspiring singer/songwriter who had penned hundreds of songs, some of which
had recently become hits, having been picked up by a famous singer of the genre. FABIAN,
upon being introduced to PAZ by a mutual acquaintance, told PAZ that he owned a California

On or about March 9, 2007, FABIAN presented PAZ with a document (the 2007

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company that promoted musicians like himself and helped them become stars.

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Agreement) which he asked PAZ to sign in order to represent him. Said document is attached

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hereto as Exhibit A. FABIAN explained that the 2007 Agreement would make FABIAN his

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company representative who was bound to protect and advance PAZs artistic interests as a

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singer. PAZ signed that document and thereafter relied upon FABIAN as his trusted agent to

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Over the next several years FABIAN, personally and through the Counter-Defendant

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represent him in obtaining engagements for his performances.

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entities which he controls, procured engagements and booked presentations for PAZ, in the

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United States and Mexico. On information and belief, Counter-plaintiff asserts that Counter-

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defendants were not licensed as talent agents and thereby failed to comply with the requirements
imposed by the applicable California Labor Code and the California Code of Regulations.
27.

In May 2007, several months after contracting with Counter-plaintiff, Counter-defendants

set up an affiliate corporation in Texas also named Nueva Generacion Music Group, Inc.
Thereafter, in June 2007, Counter-defendants merged the California entity Nueva Generacion
Music Group, Inc. into the Texas entity of the same name. On information and belief, CounterANSWER AND COUNTERCLAIM
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plaintiff asserts that the reason for this merger is to try to evade California laws which, inter alia,
rendered the compensation to Counter-defendants under the 2007 Agreement unenforceable.
28.

In the month of March 2009, while the term of the 2007 Agreement had another year to

run, FABIAN invited PAZ to spend a couple of weeks at his home in Dallas, Texas. Unbeknown

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to PAZ, this ostensibly friendly invitation was actually part of Cross-Defendants ploy to defraud
him. Cross-Defendants knew that PAZ trusted FABIAN implicitly and that in Dallas, unlike in
Mexico where PAZ and his staff reside, PAZ had no one who might have questioned FABIANs

During that March 2009 visit, FABIAN lied to PAZ telling him that the 2007 Agreement

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misrepresentations and alerted PAZ to the fraud.

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had expired and that a new one needed to be signed. The fact is that the 2007 agreement,

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pursuant to its terms, was to run for a period of three years. See Exhibit A, Clause 1. By this

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time, however, PAZ considered FABIAN and his companies his trusted agents and believed they

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were there to protect his interests as repeatedly avowed by FABIAN. He felt he had no reason to

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During that March 2009 visit to FABIANs home in Dallas, FABIAN presented PAZ

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question the veracity of FABIANs statements.

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with a new document which to PAZ looked quite similar to the one he had signed in March

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2007. This new document contained several blank spaces, which FABIAN said he would fill out

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so as to exercise the option permitted under the terms of the 2007 Agreement (the 2007
Agreement granted NUEVA the option to renew, at the end of the original three-year term, for
one four-year term).
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Trusting FABIANs representations that the new document would only exercise the

option in the 2007 Agreement, but would be otherwise identical, PAZ signed that new document
as presented on March 9, 2009, leaving the blank spaces to be filled out by FABIAN as his
ANSWER AND COUNTERCLAIM
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agent. Unbeknownst to PAZ, Counter-defendants later completed the blank spaces in the new
document with abusive and self-serving provisions that were never authorized nor agreed to by
Counter-plaintiff. Counter-defendants completed the document so as to give themselves a
twenty-year deal: an exclusive agency for an initial period of five years (instead of the four-year

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extension) and options for three additional renewals of five years each. With the 2009
Fraudulent Agreement, Counter-defendants intended to keep PAZ under their thumb for decades.
A copy of the March 9, 2009 document (the 2009 Fraudulent Agreement) is attached as

Additionally, FABIAN had lied about the 2009 Fraudulent Agreements contents. It was

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Exhibit B.

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not identical to the 2007 Agreement. Counter-defendants had re-inserted and added abusive

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provisions that had been expressly stricken or removed from the previous March 2007 contract.

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For instance, in regard to the commissions that NUEVA was to receive, the 2007 Agreement

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provided that said commissions would be earned only for those activities which were

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attributable to NUEVAs services. In the 2009 Fraudulent Agreement, the Counter-defendants

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had re-inserted the word artist (which had been expressly stricken and substituted in the 2007

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Agreement) in place of the word representative, so that NUEVA would be entitled to a

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commission for all of the Artists activities and not just hose attributable to NUEVAs

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representation. Also, the 2009 Fraudulent Agreement had removed what was clause number 7
in the 2007 Agreement. In said clause NUEVA acknowledges that it does not have the required
talent agents license and therefore excludes performances in California and other jurisdictions
from the 2007 Agreement. Through these and other alterations in the 2009 Fraudulent
Agreements, Counter-defendants illicitly extracted significant advantages from PAZ.

ANSWER AND COUNTERCLAIM


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33.

The 2009 Fraudulent Agreement establishes that attorney Alonso was Cross-defendants

attorney who advised them in the creation of the 2009 Fraudulent Agreement. On information
and belief, PAZ asserts that attorney ALONSO drafted the 2009 Fraudulent Agreement when he
knew that the 2007 Agreement had another year to run; also, attorney ALONSO altered the 2007

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Agreement provisions to aid Counter-defendants self-dealing at PAZs expense and in violation


of Counter-defendants fiduciary duties.
34.

Whereas FABIAN represented to PAZ that the 2009 Fraudulent Agreement was identical

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to the 2007 Agreement, the fact was that Cross-Defendants had changed the 2007 Agreement in

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many important respects. In each and every instance, the change made favored NUEVA at the

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expense of PAZ. The ironic result is that the 2009 Fraudulent Agreement, executed when a

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PAZ became aware of the fact that Counter-defendants had fraudulently inserted

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actually more favorable to Counter-defendants at PAZs expense.

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overreaching provisions into the 2009 Fraudulent Agreement sometime in January 2012. PAZ

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reached out to FABIAN to demand that these matters be corrected. FABIAN said he might be

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willing to correct some of the egregious alterations, but refused to rescind the 2009 Fraudulent

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PAZ informed FABIAN he would rather retire than continue under such an oppressive

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Agreement.

relationship. FABIAN threatened PAZ with severe consequences, even imprisonment, unless
PAZ continued to perform with Counter-defendants NUEVA as his agent. PAZ then decided to
continue working but to distance himself from FABIAN and Counter-defendants as much as
possible. From that point on, the parties have maintained a strained relationship. PAZ, feeling

ANSWER AND COUNTERCLAIM


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he had no choice, continued to perform and Counter-defendants continued to receive a large part
of the proceeds that PAZ earned.
37.

On information and belief, Cross-plaintiff asserts that FABIAN controls NUEVA and is

its majority stake-holder. At various times over the period of the relationship with PAZ,

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FABIAN has used other companies he controls, including Cross-defendants 24-HOUR and
MINITOS to further defraud PAZ out of his earnings. For instance, on or about June 7, 2010,
FABIAN caused PAZ to sign a three-party accord (2010 Three-Party Accord) wherein PAZ,

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Arpa Records, LLC (ARPA) and 24-HOUR agreed to share in the revenues from PAZs

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recording agreement. Under said 2010 Three-Party Accord, FABIANs company, 24-HOUR,

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was to receive 20% and ARPA and PAZ were to receive 40% each. Counter-defendants

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provided no additional consideration beyond that required under the 2009 Fraudulent Agreement,

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so they were not legally entitled to take said additional commission from PAZ. But what is

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worse, PAZ never received his 40% share and it appears that ARPA never received their share

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either, as alleged in a complaint filed against FABIAN and 24-HOUR in Los Angeles Superior

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Court as case no. BC565455. Evidently, FABIAN and Cross-defendants, who were at best

PAZ, having lost whatever trust he had bestowed upon FABIAN and Counter-defendants,

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entitled to 20%, kept the entirety for themselves.

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began to arrange his bookings without Counter-defendants intervention whenever he could. As a

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result of PAZs more direct involvement, PAZ became convinced, and so he asserts on
information and belief, that Cross-defendants had been keeping a much larger share of the
proceeds than what the agreement allotted. Although the agreement called for NUEVA to
receive thirty percent of the income, an extremely high share relative to typical agreements of the

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sort, Counter-defendants embezzled from Pazs share, appropriating for themselves the majority
of the income which they received on PAZs behalf.
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Additionally, Counter-plaintiff came to realize that he was not being credited payment for

his authorship of the songs he performed. This even though the parties had expressly agreed that

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PAZ would keep his rights as author and not share any part of these with Counter-defendants.
Counter-plaintiff demanded that Counter-defendants disgorge to PAZ the amounts due for his
authorship, but Counter-defendants refused.

PAZ demanded that FABIANs company, MINITOS, pay for the fees imposed by the

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Mexican Society of Authors (SACM). MINITOS, which collected on behalf of Cross-

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defendants in Mexico, should have paid the SACM fees, but refused to do so. It justified its

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refusal by arguing it is not an author; an ironic justification considering the fact that Counter-

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defendants were crediting nothing to PAZ for his authorship of the songs performed. As a result,

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PAZ was forced to pay out of pocket for the fees imposed, with the bizarre result that his

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authorship of the songs he performed resulted in a reduction of his net income instead of an

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increase. In addition, Counter-defendants have appropriated sums which Counter-defendants

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had already acknowledged they held on behalf of Counter-plaintiff. Counter-plaintiff has

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demanded that said sums, amounting to over one million dollars, be paid him but Counter-

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defendants have refused.

Additionally, PAZ believes and on that basis asserts, that FABIAN has licensed, sold,

transferred or otherwise conveyed, in whole or in part, PAZs property to third parties without
PAZs authorization and NUEVA has kept the proceeds for itself. For example, NUEVA has
conveyed rights to VIDEOMAX S.A. de C.V. upon PAZs recordings and other property of PAZ
without PAZs authorization and NUEVA has kept the proceeds from said conveyance. PAZ
ANSWER AND COUNTERCLAIM
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asserts on information and belief that NUEVA has, at various other times, conveyed PAZs
property to other parties to be identified and has kept the proceeds of said conveyances.
42.

Throughout 2012 and most of 2013, the parties maintained this strained and distant

relationship, with NUEVA offering to make amends through token modifications to the 2009

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Fraudulent Agreement, but PAZ refusing to trust again. In 2013, NUEVA offered to sell the
2009 Fraudulent Agreement to a third party and sought PAZs consent. PAZ avoided
communicating with NUEVA and wanted to have nothing to do with it, although he continued to

In the latter part of 2013, NUEVA filed action against PAZ for breach of contract in

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allow NUEVA to collect thirty percent share of PAZs take for his performances.

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Harris County, Texas as Case No. 2013-64241. For his part, on December 15, 2013 PAZ

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presented NUEVA a termination letter (See Termination of Agency Letter attached as Exhibit

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E) formally notifying NUEVA that they were irrevocably terminated as PAZs agent, stating:

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On this date you are informed that neither Nueva Generacion nor anyone acting for them has

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any right to present himself/herself as my agent and/or representative in any capacity and for any

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purpose. In early 2014, PAZ filed action against NUEVA in California Superior Court for

In the Texas case, PAZ objected to the jurisdiction of the court in Houston and this Court

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fraud, breach of fiduciary duties and related causes of action.

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authorized Plaintiff some expedited discovery in preparation for the jurisdictional challenges.
The parties tried to mediate unsuccessfully, but then decided to meet again to attempt to settle
their dispute with only the parties and one attorney per side present.
45.

On or about February 25th 2014 NUEVA and PAZ settled Case No. 2013-64241, which

was then pending before this Court (the 2014 Settlement). The 2014 Settlement was reached
at about 9:00pm on February 25, 2014, after more than twelve hours of marathon discussions
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where present counsel for NUEVA and PAZ were in attendance along with PAZ and FABIAN
as president of NUEVA. The broad outlines of the 2014 Settlement were written out by
Attorney ALONSO in four handwritten notebook pages, with numerous markings, cross-outs,
interlineations, corrections, winding arrows, scrawling along the margins, and scratch-outs. This

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document was signed by all present as a statement of the parties agreement reached that day (the
Handwritten Agreement, Exhibit D).
46.

Given that many areas of the relationship between PAZ and NUEVA were not yet

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addressed in the Handwritten Agreement, the parties inserted a provision into the Handwritten

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Agreement expressly reserving any and all claims stemming from the 2009 Fraudulent

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Agreement. See Exhibit D, Clause 5 (the parties agree to release one another with the

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exception of the terms contained in the March 9, 2009 Agreement. This provision was to act

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as a safety valve to make sure that the parties came together and completed the work of

The Handwritten Agreement capped the total of payments which NUEVA was to receive

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drafting a finalized document as mutually agreed.

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from PAZ at a grand total of $4,500,000. PAZ was to pay an aggregate amount of one million

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dollars via wire transfer during the remainder of 2014 plus either: 1) an additional total of

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$3,500,000 to be paid to NUEVA on or before December 31, 2014, or otherwise 2) thirty percent

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of the revenue from PAZs performances starting on January 1, 2015. Said payments of 30% of

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PAZs revenue from his performances was to continue being paid to NUEVA until the
aforementioned grand total was paid in full. Unlike the first $1,000,000.00 which was to be wire
transferred from PAZ to NUEVA, the balance of 3,500,000.00 could be paid in any appropriate
manner, including, for example, offset or credit for money or valuables belonging to PAZ
already in NUEVAs possession (Handwritten Agreement clause 1(c)).
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48.

At the time of the 2014 Agreement, NUEVA held funds and other valuables which were

the property of PAZ that NUEVA had received as PAZs agent. There were also funds that
belonged to PAZ which were being held by third parties, which would require NUEVAs
authorization in order to be released to PAZ. These needed to be accounted for and other issues

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needed to be addressed and fleshed out in a properly drafted document that would achieve the
stated purpose of the 2014 Settlement: to resolve all claims between the parties.
49.

Although the Handwritten Agreement is in Spanish, one look at the document makes it

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completely obvious that this was not intended to be the finalized agreement. The Handwritten

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Agreement is not in the least presentable. More importantly, the relationship between NUEVA

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and PAZ is complex and the broad outlines memorialized in the Handwritten Agreement leave

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many issues unaddressed. This was clear to all present and, in particular, to counsel for NUEVA

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Equally clear was the parties intent to settle all pending issues between the parties

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and PAZ.

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pursuant to the 2014 Settlement. This intent was expressly written into the Handwritten

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Agreement, which states: Plaintiff and Defendant agree that they are releasing by these means

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all grievance and complaint which exists between the parties, but excludes the 2009 Fraudulent

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Agreement from said release. It was agreed that counsel for both parties would flesh out the

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details of the 2014 Settlement and craft a more complete document that would appropriately
reflect the totality of the 2014 Settlement, including a finalized disposition of the issues pending
under the 2009 Fraudulent Agreement (the Pending Finalized Document).
51.

Few hours after having reached the 2014 Settlement, early in the morning of February 26,

2014, PAZs counsel (Attorney Chavez) e-mailed NUEVAs counsel (Attorney ALONSO) a
reminder that NUEVAs counsel was to begin preparation of the finalized, cleaned-up version,
ANSWER AND COUNTERCLAIM
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i.e. the Pending Finalized Document. NUEVAs counsel acknowledged the request answering
let me see what I can do on that.
52.

Two days after said email exchange, on February 28, 2014, a first installment of the one

million dollars to be paid in under the 2014 Settlement became due. Before tendering payment,

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PAZ through counsel again demanded NUEVA via email that it produce a first draft of the
Pending Finalized Document. In that email, attorney Chavez warned Attorney Alonso that
unless the parties came through on the agreement to flesh out the 2014 Settlement in a more

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formal document, the Handwritten Agreement would be fatally ambiguous (due to the exclusion

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of the 2009 Fraudulent Agreement from the settlement, among other reasons). Additionally,

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attorney Chavez described with greater specificity the unaddressed issues that were to be part of

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said Pending Finalized Document. First amongst these, attorney Chavez highlighted the fact that

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Nueva Generacin is not and will not be, under any concept, my clients agent, adding: I

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think enough was said during our [settlement] meeting so that not even the least doubt can

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remain with respect to my clients position in this regard. Also, given that attorney Alonso had

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failed to produce the fleshed out agreement he promised, attorney Chavez sent Alonso a

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proposed draft of the Pending Finalized Document as an attachment to that February 28, 2014

Attorney ALONSO answered the same day insisting that PAZ must make the first

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email. A copy of said version of the Pending Finalized Document is attached hereto as Exhibit C.

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payment today, but adding: Nonetheless, I hope to have a draft this coming week so that both
parties can make changes.
54.

PAZ paid the first and second installment due in February and March 2014, respectively,

for a total of one million dollars. Regardless, Attorney Alonsos promised draft never came
through. In fact, on March 4, 2014 Attorney Alonso revealed he had no intention of producing
ANSWER AND COUNTERCLAIM
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the promised draft of the Pending Finalized Document and left the job to attorney Chavez,
stating: why dont you send me a draft of what you want us to sign... so that I can discuss it with
NUEVA?
55.

PAZ, through counsel, did produce a proposed fleshed-out settlement agreement and

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presented it to NUEVA on March 27, 2014 for its consideration. On April 9, 2014 NUEVA,
through counsel, responded with five proposed modifications to the proposed agreement. In the
ensuing months, PAZ and NUEVA, through their counsel, continued to negotiate some aspects

After a lull in the negotiations, PAZ presented another version of the proposed Pending

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of the Pending Finalized Document.

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Finalized Document on October 20, 2014. Ten days later, on October 30, 2014, NUEVA

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informed PAZ that it was reneging on its promise to produce a Pending Finalized Document

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accurately reflecting the 2014 Settlements intent to resolve all issues between the parties,

From that point forward, PAZ, reached out to NUEVA just about weekly, insisting that

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stating: we prefer that the Settlement Agreement be honored as is.

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the parties need to sit down and hammer things out amicably so as to avoid wasteful litigation.

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NUEVA chose to either ignore or openly scorn PAZs requests for open dialogue and a

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Time and again NUEVA rejected PAZs overtures. Still, on January 2, 2015, PAZ

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resumption of good faith negotiations to produce the Pending Finalized Document.

informed NUEVA that PAZ intends to fully honor the 2014 Settlement but also demanded that
NUEVA live up to its end of the bargain. On January 7, 2014, NUEVA filed its new original
petition thereby restarting litigation.

ANSWER AND COUNTERCLAIM


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59.

Counter-defendants willful, wanton and malicious actions are intended to abuse, oppress

and harass Counter-plaintiff. As a result of said actions, Counter-plaintiff has been damaged in
amounts to be proven at trial but which exceed ten million dollars.

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FIRST CAUSE OF ACTION


(Breach of Contract - NUEVA)
Plaintiff alleges and incorporates by reference the allegations set forth in paragraphs 1

through 26 as if fully set forth herein.

On or about February 25, 2014 the parties entered into the 2014 Settlement, which was

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broadly outlined via the Handwritten Agreement. As part of the 2014 Settlement, the parties

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agreed to flesh out a formal Pending Finalized Document that would resolve the totality of the

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PAZ (hereinafter, Counterclaimant) performed all conditions, covenants and promises

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Agreement, pursuant to the 2014 Settlement.

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issues pending between the parties, including the issues regarding the 2009 Fraudulent

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required on its part to be performed under the 2014 Settlement, except those that NUEVA

NUEVA breached the 2014 Settlement by reneging on its promise to flesh out a Pending

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waived or prevented by its wrongful actions, or that it rendered impossible to perform. .

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Finalized Document that would resolve all issues between the parties pursuant to the 2014

NUEVAs breach caused Counterclaimant to sustain damages in amounts to be

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Settlement, and thereby denied Counterclaimant the benefit of his bargain.

determined at trial, but believed to not be less than 4,500,000.


SECOND CAUSE OF ACTION
(Breach of Covenant of Good Faith and Fair Dealing - NUEVA)
65.

Counterclaimants repeat and incorporate herein by reference the allegations in the

preceding paragraphs of this Counterclaim.


ANSWER AND COUNTERCLAIM
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66.

NUEVA had a legal obligation to undertake its activities pursuant to the 2014 Settlement

in a manner consistent with good faith and fair dealing. In undertaking actions throughout the
contractual relationship intended to harm Counterclaimant, NUEVA breached the covenant of
good faith and fair dealing.
By reason of the foregoing, Counterclaimant has been damaged as a result of NUEVAs

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67.

illegal actions in amounts that will be determined at trial, but believed not to be less than
$4,500,000.

Counterclaimant repeats and incorporates herein by reference the allegations in the

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THIRD CAUSE OF ACTION


(Fraud 2009 Fraudulent Agreement)

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Counter-defendants represented to PAZ that the 2009 Fraudulent Agreement was only an

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preceding paragraphs of this Counterclaim,

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exercise of the four-year option permitted under the 2007 Agreement. Said representation was

At the time Counter-defendants made the aforementioned false representation, Counter-

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false and was a material element in inducing PAZ to enter into the 2009 Fraudulent Agreement,

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defendants knew it to be false, or made said material representation recklessly without any

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Counter-defendants made said material misrepresentation with the intent that PAZ should

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knowledge of its truth and as a positive assertion,

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act upon it; PAZ did act upon Counter-defendants misrepresentation by entering into the 2009
Fraudulent Agreement. As a direct consequence of Counter-defendants material
misrepresentation, PAZ suffered damages in amounts to be determined at trial, but believed to be
in excess of ten million dollars.

FOURTH CAUSE OF ACTION


(Breach of Fiduciary Duties)
ANSWER AND COUNTERCLAIM
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72.

Counterclaimant repeats and incorporates by reference the allegations contained in the

preceding paragraphs of this Counterclaim,


73.

Counter-defendants acted as Counterclaimants talent agent starting in the year 2007 and

as such stood in the position of Counterclaimants fiduciary,


Counter-defendants breached their fiduciary duty to Counterclaimant in that, inter alia, it

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failed to keep and render accounts that were clear and accurate, failed to place the interests of
Counterclaimant above its own, failed to exercise ordinary care, skill and caution in

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administering Counterclaimants property, failed to keep trust property separate from its own

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property and to properly designate it as trust property, failed to fully and accurately disclose all

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Cross-defendants breach of fiduciary duties proximately caused injury to

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dealing against the interests of Counterclaimant.

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material facts necessary for Counterclaimant to protect his own interests, and engaged in self-

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Counterclaimant and Cross-defendants illicitly accrued benefits for themselves as a result,

Counterclaimant repeats and incorporates by reference the allegations contained in the

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FIFTH CAUSE OF ACTION


(Conversion)

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Counter-claimant owned or had the right to immediate possession of money and other

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preceding paragraphs of this Counterclaim,

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valuables in Counter-defendants possession, included but not limited to, moneys received by
Counter-defendants pursuant to the 2010 ARPA Agreement.
78.

Counter-defendants wrongfully exercised dominion or control over Counter-claimants

property to the exclusion of and inconsistent with the Counter-claimants rights,

ANSWER AND COUNTERCLAIM


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79.

Counter-claimant demanded return of his property from Counter-defendants, but

Counter-defendants have failed to return it. Said conversion has caused PAZ damages in
amounts to be determined at trial.
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JURY DEMAND
Defendant exercises his right to trial by jury.

WHEREFORE, premises considered, Defendant respectfully prays as follows:

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PRAYER

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a. That Plaintiff take nothing by its action and that all its claims be dismissed with

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prejudice,

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b. That the 2014 Settlement be declared rescinded; that the parties be returned to their

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position ex-ante and that COUNTER-DEFENDANTS be ordered to reimburse to

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2014 Settlement,

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Counterclaimant the $1,000,000 that COUNTER-DEFENDANTS received under the

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c. That COUNTER-DEFENDANTS be compelled to pay money and restore property

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that it holds in trust for Counterclaimant,

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d. That COUNTER-DEFENDANTS be ordered to account for moneys held in trust for

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Counterclaimant,
e. That COUNTER-DEFENDANTS be compelled to reimburse all sums earned as
compensation as Counterclaimants fiduciary,
f. That a constructive trust be placed upon all funds and all property held by
COUNTER-DEFENDANTS for Counterclaimant,

ANSWER AND COUNTERCLAIM


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g. That trust property which COUNTER-DEFENDANTS wrongfully disposed be traced


and that Counterclaimant recover said property or proceeds from said property,
h. That the Court award Defendant his reasonable and necessary attorneys fees and
costs of Court,

be justly entitled, and

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i. That Defendant receive such other further relief at law or in equity to which he may

j. That Counterclaimant be awarded actual damages including pre and post- judgment

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interest at the maximum rate allowed by law.

ANSWER AND COUNTERCLAIM


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Respectfully Submitted

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XAVIER LAW FIRM

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/s/ Xavier V. Chavez


Xavier V. Chavez
State Bar No.: 24069495
Attorney for Defendant
25775 Oak Ridge Drive, Ste 120
The Woodlands, Texas 77380
Phone: (281) 296-3741
Fax: (281) 296-3879
xavier@xavierlawfirm.com

ATTORNEYS FOR DEFENDANT


COUNTER-PLAINTIFF

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John W. Havins
TBN 09239800
Ky A. Jurgensen
TBN 24071804
2211 Norfolk St., Ste 525
Houston, TX 77098
T: 713/650-3600
F: 713/650-3601
jhavins@havinsassoc.com
kjurgensen@havinsassoc.com

ANSWER AND COUNTERCLAIM


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CERTIFICATE OF SERVICE
I certify that a true copy of the above was served on each attorney of record or party in
accordance with the Texas Rules of Civil Procedure on February 16, 2015.

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/s/ Xavier V. Chavez ___________________


Xavier V. Chavez
Attorney for Defendant

ANSWER AND COUNTERCLAIM


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