GOP House Candidate Accused of Fraud
June 19th, 2008 at 4:46 pm
Hamlin attorney Isaac Castro, the Republican running against state Rep. Joe Heflin (D-Crosbyton) in House District 85, has been accused of fraud, breach of fiduciary duty, and negligence in a complex lawsuit in Stonewall County, the Observer has learned. The litigation centers around two brothers, John and Bob Denison, who have been fighting for a decade over their mother’s estate, which includes a 6,200-acre West Texas ranch, oil and gas royalties, and an historical courthouse in the ghost town of Rayner. As probate matters often do, things have gotten nasty between the Brothers Denison. (Read the suit. Warning: large .pdf file.)
Bob accuses John of driving the estate into insolvency and profiting off illegal transactions, including the secretive sale of the ranch to T. Boone Pickens, the legendary Texas oilman-turned-water-baron. Castro, who served as John’s attorney, was added as a third party defendant to the suit in December 2006.
The suit claims that Castro “unlawfully aided” Brother John in exploiting the estate for personal gain. For example, Castro allegedly helped John obtain a loan from the Hamlin National Bank (Castro was also acting as an agent for the bank) backed by Bob’s half interest in the estate. At the time, the estate owed delinquent property and federal taxes and was subject to a federal lien. Castro “facilitated [John Denison’s] fraud and breach of fiduciary duties” and “collected attorney fees, or benefited in some other disguised manner, such as commission or property,” the suit states.
In a statement to the Observer, Castro said: “It is unfortunate that in Texas today people can still file frivolous lawsuits with no legal justification. The fact that I represent my client vigorously and with due diligence should never mean I should be party to this frivolous lawsuit. This is yet another reason why I am running for state representative, because we need thoughtful legislators who will work to bring additional lawsuit reform to our state’s honorable legal system.”
In a court filing, Castro argues the claims against him are “without merit” and “brought for the purpose of harassment.” Specifically, Castro complains in the filing that the “allegations are so general” that he does not have “fair notice of the claim.” He asks the judge to throw the suit out.
(Note: a second suit -titled 4848 Aspermont LTD v. Alamo Title Company, et al - in which Castro is also named as a defendant was filed in Dallas County in May. The Observer has not been able to obtain a copy of the suit but sources say it is related to the Denison case.)
The outcome of the Castro-Heflin match-up will be pivotal for control of the House. Reached by phone today, Rep. Heflin - an attorney himself - said he had no plans to make the lawsuit an issue in the race at this point.
June 20th, 2008 at 11:07 pm
Seeing that the case was not and is not thrown out, I am sure the case has merit. I mean, there is a case here obviously, and if elected, Castro is saying that the people have no right or avenue to pursue lawyers that are engaged in unlawful or unethical practice.Once again, it appears our rights under the judicial system and the constitution is being restricted for the benefit of the powerful and the wealthy. With two suits pending, I am not sure electing such a candidate to represent us, is that great of an idea.
June 21st, 2008 at 12:10 pm
And just how did the Texas Observer learn about this long-running case? Surely, it wasn’t from Rep. Heflin, who “said he has no plans to make the case an issue in the race at this point.” So I presume the Observer was merely rummaging around 18-month-old case files in the Stonewall County Courthouse and came upon this information.
And commentor Avis is clearly a legal genius, stating that if a case hasn’t been thrown out, it must have merit. Nice echo chamber for a cheap hit job, TO.
I had always thought Rep. Heflin was a man of decent character, and above cheap tactics like this. Perhaps I was wrong. A close election challenge has driven other candidates to abandon their principles as well.
June 23rd, 2008 at 8:43 am
For the record, neither Rep. Heflin nor the Heflin campaign was the source for this story.
June 25th, 2008 at 12:34 pm
[…] County in May, the 4848 Aspermont suit is linked closely to the Stonewall County estate battle we wrote about last week. The plaintiff, a real estate vehicle called 4848 Aspermont LTD, accuses Castro of […]
July 17th, 2008 at 1:38 pm
[…] Abilene investor Dian Graves Stai ($5,000); and, not surprisingly given the “frivolous” lawsuits pending against Castro, Texans for Lawsuit Reform PAC ($17,000). Reflecting his anti-voucher bent, […]