Armando Montelongo, former ‘Flip this House’ star, loses bid to get ex-students’ fraud claims tossed

One-time reality TV star Armando Montelongo Jr. has lost his bid to have fraud claims dismissed against him and his companies regarding real estate investment seminars they held.

The Texas Supreme Court on Friday declined to hear Montelongo’s appeal of a lower court ruling that let the claims stand. The state’s high court gave no reason for its decision.

Some 423 individuals who attended Montelongo’s seminars filed a lawsuit alleging that he sells “worthless, dangerous, and unlawful information” and “takes advantage of the students’ trust to loot their accounts.” Of the 37 plaintiffs who live in Texas, six reside in San Antonio.

The plaintiffs seek at least $15 million in damages.

A lawyer and a spokeswoman for Montelongo didn’t immediately respond to a request for comment Monday, so it couldn’t be determined whether Montelongo plans to file a motion for rehearing with the Supreme Court.

Montelongo, 52, lives in San Antonio and is best known as the former star of the cable television series “Flip This House.” It aired on A&E from 2006 to 2008 and portrayed the stress and success of high-risk real estate investment, along with the drama of a family business.

He capitalized on his TV fame by promoting house-flipping seminars that have landed him in court.

On ExpressNews.com: For the third time, ex-students sue one-time reality TV star Montelongo

The claims of fraud by former students are at the “core of the dispute” with Montelongo, and it would have been “a harder road ahead” for them had he prevailed in getting them dismissed, said John “Mickey” Johnson, a San Antonio lawyer representing the plaintiffs.

The legal battle began almost seven years ago in San Francisco federal court, with about 160 students alleging that Montelongo had bilked them out of their life savings, destroyed marriages and even drove one person to suicide.

The court dismissed the case after Montelongo argued it had no jurisdiction to hear it. The plaintiffs refiled the case in late 2016 in San Antonio federal court. A judge later dismissed the case, ruling that the plaintiffs failed to argue sufficient facts in support of their allegations that Montelongo and his companies engaged in a “pattern of racketeering activity.” Racketeering involves illegal business activities.

A month after the dismissal, in July 2018, the plaintiffs sued in state District Court in San Antonio. They accused Montelongo and his three companies — Real Estate Training International LLC, Performance Advantage Group Inc. and License Branding LLC — of deceptive trade practices and negligence.

Montelongo responded to the lawsuit via Twitter:

“To the 350, now 420, I have stood relatively silently by because I understand that there is prosperity in peace, But now your (sic) simple minded,” he wrote. “ Hatred will understand the expense of war. I do not wish you good luck, but you will need it. Because you will feel the full brunt of my Capabilities and a resolve that you have never dealt with. You are following extremely weak leaders who will now lead you down the path 2 bk (bankruptcy).”

Montelongo said in an interview at the time that he planned to file his own lawsuit against all of the students, but it doesn’t appear that he did.

On ExpressNews.com: Armando Montelongo yanks $1.2M Dominion home off market after months without buyer

The former students amended their lawsuit in early 2019, adding claims of fraud, conspiracy to commit fraud, fraudulent concealment and breach of contract.

They alleged in their lawsuit that Montelongo’s “high-pressure sales tactics and promises of future fortune do not come with any educational substance.”

“The core of (his) ‘methodical step-by-system’ is so simple it can be taught in a sentence,” the complaint said. “Take out high-interest debt to purchase dilapidated homes, make cosmetic repairs, and then quickly flip them to the next investor.”

Before a bus tour event, the students alleged, Montelongo will use an affiliate to buy properties in an area and then sell them to students at “inflated prices without disclosing that he has an interest in the sales or or receives a share of the properties.”

Montelongo responded by filing an anti-SLAPP motion — SLAPP stands for strategic lawsuit against public participation — under the Texas Citizens Participation Act, saying certain portions of the fraud claims relate to his exercise of his First Amendment right of free speech.

Those fraud claims, in part, related to accusations that Montelongo preyed on students, was “self-dealing” and deleting Facebook posts that were critical of him or his seminars.

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A state court judge denied the motion, a ruling that Montelongo appealed. The 4th Court of Appeals in San Antonio upheld the ruling on a technicality, so he appealed to the Texas Supreme Court. It reversed the appeals court ruling and sent the case back to hear the appeal.

In June, the appeals court denied Montelongo’s motion. So he appealed again to the Supreme Court, which denied his appeal Friday.

Johnson, the plaintiffs’ lawyer, expects activity in state District Court litigation will resume in a couple of months and allow for the gathering of evidence.

“Then we can actually find out what they were doing on the inside,” Johnson said. “That’s the biggest impact that this ruling is going to have, is that we’ll be able to do our discovery now.”

Johnson said he wants to learn about Montelongo’s policies and procedures, as well his net worth so plaintiffs can find out whether there are assets to satisfy their claims.

pdanner@express-news.net