Robert Westerburg, Administrator of the Estate of R.D. West A/K/A Randy Dixon Westerburg v. Western Royalty Corporation ( 2015 )

ACCEPTED
07-15-00082-CV
SEVENTH COURT OF APPEALS
AMARILLO, TEXAS
5/7/2015 2:37:48 PM
Vivian Long, Clerk
CAUSE NO. 07-15-00082-CV
IN THE FILED IN
7th COURT OF APPEALS
AMARILLO, TEXAS
COURT OF APPEALS 5/6/2015 2:37:48 PM
VIVIAN LONG
FOR THE SEVENTH DISTRICT OF TEXAS CLERK
AMARILLO, TEXAS
Appealed from the 99th District Court
Lubbock County, Texas
ROBERT WESTERBURG, ADMINISTRATOR OF THE ESTATE OF
R.D. WEST a/k/a RANDY DIXON WESTERBURG,
Appellants,
vs.
WESTERN ROYALTY CORP.,
Appellee.
APPELLANT’S BRIEF
Steven Thornton
State Bar No. 00789678
WESTERBURG & THORNTON, P.C.
6060 N. Central Expressway, Suite 690
Dallas, Texas 75206
Phone No.: 214.528.6040
Facsimile: 214.528.6170
steve@mwtlaw.com
ATTORNEY FOR APPELLANT
ROBERT WESTERBURG
APPELLANT REQUESTS ORAL ARGUMENT
1
IDENTITY OF PARTIES AND COUNSEL
Appellant certifies that, pursuant to Texas Rule of Appellate Procedure
38.1(a), the following is a complete list of the parties, the attorneys and any other
person who has any interest in the outcome of this lawsuit:
1. Appellant/Plaintiff, Robert Westerburg, Administrator of the Estate of R.D.
West a/k/a Randy Dixon Westerburg
Steven Thornton
WESTERBURG & THORNTON, P.C.
6060 N. Central Expressway, Suite 690
Dallas, Texas 75206
steve@mwtlaw.com
Phone No.: 214.528.6040
Facsimile: 214.528.6170
2. Appellee/Defendant, Western Royalty Corp.
Tom H. Whiteside
Whiteside Law Firm
P. O. Box 2825
Lubbock, TX 79408
thw@whitesidelawfirm.com
Phone No.: 806.687.9009
Facsimile: 806.687.9011
This list is furnished so that members of the Court may at once determine
whether they are disqualified to serve or should recuse themselves from
participating in the decision of the case.
2
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL …………………………………… 2
TABLE OF CONTENTS …………..…………………………………...….…… 3
TABLE OF AUTHORITIES ………….……………………………...………… 5
STATEMENT OF THE CASE …………………………………………………. 7
STATEMENT OF JURISDICTION ……………………….…………………… 8
SUMMARY OF CASE ………………………………………………………… 9
ISSUES PRESENTED ………………………………….…………………….. 10
REQUEST FOR ORAL ARGUMENT ………………………………………… 11
STATEMENT OF FACTS ……………………………………………………... 12
SUMMARY OF THE ARGUMENT ..………………………………………..... 14
ARGUMENT AND AUTHORITIES …………...…………………..…………. 15
ISSUE ONE: Did Judge Sowder err in denying Robert Westerburg’s
Claim for recovery of attorney’s fees? ………………………… 15
I. Standard of Review ……………………………………………………… 15
II. Texas Law Mandates Recovery of Attorney’s Fees ……………..…………. 16
A. Westerburg’s Right to Review Books and Records …………..……. 16
B. Recovery of Attorney’s Fees is Mandatory …………………………. 18
C. Western Royalty’s Contentions on Attorney’s Fees are Meritless …... 20
3
C.1. Westerburg is Not Pro Se ………………………….....……… 20
C.2. Western Royalty’s Cited Cases Are Not Applicable
to this Cause ………………………………………………. 21
CONCLUSION and PRAYER …………………………………………..……. 24
CERTIFICATE OF SERVICE ………………………….……………..……… 26
CERTIFICATE OF COMPLIANCE ………………………………………….. 26
APPELLANT’S APPENDIX …………………………….…………………….. 27
4
TABLE OF AUTHORITIES
Case Law
Baker's Campground, Inc. v. McCalla, 2012 Tex. App. LEXIS 6173
(Tex. App. – Waco 2012, no pet.) ……………………………………………… 15
Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998) ………………………… 19, 23
Campbell, Athey & Zukowski v. Thomasson, 863 F.2d 398, 400
(5th Cir. 1989) …………………………………………………………………... 21
City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678
(Tex. 1979) ………………………………………………………………………. 16
Creditwatch, Inc. v. Jackson, 157 S.W.3d 814, 816 (Tex. 2005) …………….. 15
Elwood v. Drescher, 456 F.3d 943 (9th Cir. 2006) ……………………………. 22
Erickson v. Board of Education of Baltimore County, 162 F.3d 289
(4th Cir. 1998) …………………………………………………………………… 21
Lawrence v. Bowsher, 931 F.2d 1579 (D.C. Cir. 1991) ………………………. 22
Ray v. U.S. Department of Justice, 87 F.3d 1250 (11th Cir. 1996) ……………. 22
Sanchez & Sleeman v. City of Austin, 2013 U.S. Dist. LEXIS 189178
(W.D. Tex. 2013) ……………………………………………………………… 22
Tesoro Petroleum Corp. v. Coastal Refining and Marketing, Inc., 754 S.W.2d
764, 766-67 (Tex. App. – Houston [1st Dist.] 1988, writ denied) …………….. 21
Other Authorities
42 U.S.C. § 1981 ……………………………………………………………….. 22
42 U.S.C. § 1983 ……………………………………………………………….. 22
42 U.S.C. § 1988 ………………………………………………………….… 22, 23
5
California Probate Code § 8800 ………………………………………..….. 12, 17
California Probate Code § 8804 ……………………………….…………….. 12, 17
California Probate Code § 8850 …………………………………………….. 12, 17
Tex. Bus. Orgs. Code § 21.218 …………….…. 7, 9, 12, 13, 14, 16, 17, 18, 19, 23
Tex. Bus. Orgs. Code § 21.222 ……………..…….. 7, 9, 13, 14, 15, 16, 19, 20, 23
Tex. R. Civ. P. 166a ……………………………………………………………. 16
Texas Constitution, Article V, § 6 ………………………………………………. 8
Texas Government Code § 22.220 ……………………………………………… 8
6
STATEMENT OF THE CASE
Appellant Robert Westerburg, Administrator of the Estate of R.D. West
a/k/a Randy Dixon Westerburg (hereinafter “Westerburg”), brought this suit
seeking to examine the books and records of Appellee Western Royalty Corp.
(hereinafter “Western Royalty”) pursuant to section 21.218 of the Texas Business
Organizations Code. Westerburg also sought to recover his attorney’s fees
pursuant to section 21.222 of the Texas Business Organizations Code. Western
Royalty objected to Westerburg’s request. The parties filed competing traditional
motions for summary judgment.
Upon considering these motions, the Honorable William C. Sowder in the 99th
District Court of Lubbock County, Texas, rendered a Final Summary Judgment
which granted Westerburg’s request to examine Western Royalty’s books and
records but denied Westerburg’s requested recovery of his attorney’s fees.
Westerburg appeals only the trial court’s ruling denying him the recovery of his
attorney’s fees.
7
STATEMENT OF JURISDICTION
This Court has jurisdiction to hear this appeal pursuant to Texas
Constitution, Article V, § 6 and Texas Government Code § 22.220.
8
SUMMARY OF THE CASE
In 2013, Westerburg’s brother, R.D. West, died in California. A portion of
the Estate of R.D. West included 350 shares of Western Royalty. Once appointed
as administrator of R.D. West’s estate, Westerburg sought to examine the books
and records of Western Royalty in order to ascertain a valuation of the stock
owned by the Estate and to allow Westerburg to complete an inventory
requirement set by the probate court and California probate law.
Pursuant to the Texas Business Organizations Code, Westerburg made a
request to Western Royalty for access to the books and records of the company.
Western Royalty refused. Westerburg filed suit against Western Royalty seeking
access to the books and records of the company and recovery of his attorney’s fees,
costs and expenses pursuant to sections 21.218 and 21.222 of the Texas Business
Organizations Code.
After engaging in some limited discovery, the parties filed competing
traditional motions for summary judgment. Judge Sowder considered both
motions and ultimately granted Westerburg’s request and ordered Western Royalty
to make available to Westerburg a defined set of books and records for
examination and photocopying. Judge Sowder refused to award Westerburg any
attorney’s fees in this matter but did award him court costs and expenses.
9
ISSUES PRESENTED
Issue One: Did Judge Sowder err in denying Robert Westerburg’s claim
for recovery of attorney’s fees?
10
REQUEST FOR ORAL ARGUMENT
Westerburg requests oral argument in this cause as he believes it would be
helpful to the Court in evaluating these issues. Westerburg believes that given the
nature of the claims he is making and the defenses set forth by Western Royalty,
the Court may have questions for the parties that will be useful in reaching a
decision.
11
STATEMENT OF FACTS
Mr. R.D. West died on August 22, 2013 in California. At the time of his
death, R. D. West was a record holder of 350 shares of Western Royalty. A
California Probate Court appointed Robert Westerburg to administer the Estate of
R.D. West, deceased. Clerk’s Record, Vol. 1 – 95. Westerburg, by and through
R.D. West’s ownership and being a holder of shares of Western Royalty, qualified
to examine the corporate records of Western Royalty pursuant to Texas Business
Organizations Code § 21.218. Clerk’s Record, Vol. 1 – 97.
On February 19, 2014, Westerburg delivered to Western Royalty a written
demand for examination of sixteen specific categories of books and records.
Clerk’s Record, Vol. 1 – 96. Westerburg’s purpose in seeking the examination of
these documents is to determine the fair market value of the Estate’s interest in
Western Royalty for the purpose of preparing the required Inventory and
Appraisement for filing in the pending probate case in the Superior Court of
California, San Diego, California. Clerk’s Record, Vol. 1 – 97. Pursuant to the
California Probate Code, Westerburg must file with the California Probate Court
Clerk an inventory of the property to be administered in the Decedent’s estate
together with an appraisal. California Probate Code §§ 8800(a), 8804, and
8850(a); Clerk’s Record, Vol. 1 – 95, 101-103.
12
As Western Royalty is not a publically traded company and as Western
Royalty does not produce and distribute any information (other than a small
dividend to shareholders and a 1099 federal income tax reporting form) to its
shareholders from which such a calculation can be made, Westerburg has no other
means available to him which would provide the information necessary to comply
with the California Probate Code. Clerk’s Record, Vol. 1 – 97. The only purpose
for which Westerburg sought this information is to meet his obligations under the
California Probate Code. Clerk’s Record, Vol. 1 – 97.
Western Royalty refused Westerburg’s request. Clerk’s Record, Vol. 1 – 97.
As such, Westerburg brought suit against Western Royalty seeking the right to access
and examine the requested books and records of Western Royalty and to recover his
costs and expenses, including attorney’s fees, pursuant to sections 21.218 and 21.222
of the Texas Business Organizations Code. Clerk’s Record, Vol. 1 – 97. Western
Royalty objected to both of these claims. After conducting some discovery, both
parties filed competing motions for summary judgment. Judge Sowder granted
Westerburg’s request to examine the books and records of Western Royalty and
awarded him court costs and expenses. But, Judge Sowder denied Westerburg’s
request for recovery of his attorney’s fees. Clerk’s Record, Vol. 1 – 256-259.
13
SUMMARY OF THE ARGUMENT
Westerburg contends that Judge Sowder erred when he denied Westerburg’s
request for recovery of his attorney’s fees. Westerburg contends that the plain
language of Section 21.222 of the Texas Business Organizations Code mandates
the recovery of costs and expenses, including attorney’s fees, for a party who seeks
to examine the books and records of a company pursuant to Section 21.218 of the
Texas Business Organizations Code but is denied by that company. Westerburg
contends that the Texas Legislature did not vest discretion within the trial court to
determine whether Westerburg is entitled to recover his attorney’s fees.
Westerburg contends that the arguments set forth by Western Royalty in opposition
to the recovery of Westerburg’s attorney fees are either inappropriate or
inapplicable. Given the evidence produced to the trial court by the parties, this
Court should be able to reverse Judge Sowder’s ruling denying Westerburg’s
recovery of attorney’s fees and render an award for those attorney’s fees to
Westerburg.
14
ARGUMENTS AND AUTHORITIES
ISSUE ONE: Did Judge Sowder err in denying Robert Westerburg’s
claim for recovery of attorney’s fees?
Westerburg’s Motion for Traditional Summary Judgment sought both to
examine the books and records of Western Royalty and to recover attorney’s fees,
costs and expenses arising from this matter. Judge Sowder properly granted
Westerburg’s request to examine the books and records of Western Royalty and
awarded court costs and expenses. But, Judge Sowder denied Westerburg’s request
to recover attorney’s fees. Clerk’s Record, Vol. 1 – 256-259. Westerburg contends
that section 21.222 of the Texas Business Organizations Code mandates that Judge
Sowder award Westerburg his attorney’s fees and costs after granting his request to
examine the books and records of Western Royalty. Based on Texas law and on the
evidence presented, Judge Sowder erred by denying Westerburg’s request to recover
attorney’s fees.
I. Standard of Review
Texas appellate courts review the grant of a traditional motion for summary
judgment de novo. Creditwatch, Inc. v. Jackson, 157 S.W.3d 814, 816 (Tex. 2005);
Baker's Campground, Inc. v. McCalla, 2012 Tex. App. LEXIS 6173 (Tex. App. –
Waco 2012, no pet.). In a traditional summary judgment proceeding, the issue is
whether the movant met its burden for summary judgment by establishing that no
genuine issue of material fact exists entitling the movant to judgment as a matter of
15
law. Tex. R. Civ. P. 166a(c); City of Houston v. Clear Creek Basin Authority, 589
S.W.2d 671, 678 (Tex. 1979).
II. Texas Law Mandates Recovery of Attorney’s Fees
In his ruling on the competing motions for summary judgment, Judge Sowder
held that, pursuant to sections 21.218 and 21.222 of the Texas Business
Organizations Code, Westerburg is entitled to examine the books and records of
Western Royalty and to recover his court costs and expenses. But, Judge Sowder
denied Westerburg’s claim to recovery of any attorney’s fees related to enforcing this
right. Westerburg contends that Judge Sowder erred and that he had no discretion to
deny Westerburg’s claim to recovery of any attorney’s fees in this matter.
A. Westerburg’s Right to Review Books and Records
The Texas Business Organizations Code provides that a holder of shares of a
corporation for at least six months is entitled, upon written demand stating a proper
purpose, to examine and copy the corporation’s relevant books, records of account,
minutes and share transfer records. Tex. Bus. Orgs. Code § 21.218(b). More
broadly, the Texas Business Organizations Code empowers a court, upon proof of
a proper purpose, to compel a corporation to produce such records for examination
by the holder regardless of the period during which the holder was a record holder.
Tex. Bus. Orgs. Code § 21.218(c).
16
In this case, Westerburg demonstrated to Judge Sowder that he met all of the
requirements of section 21.218 entitling him to examine the books and records of
Western Royalty. First, Westerburg adduced evidence that his brother, Mr. R. D.
West, was a record holder of 350 shares of Western Royalty for over 20 years.
Clerk’s Record, Vol. 1 – 95. Mr. West died on August 22, 2013. Clerk’s Record,
Vol. 1 – 95. Westerburg then described for Judge Sowder how the Superior Court
of California, County of San Diego, appointed Westerburg to administer the Estate
of R.D. West, deceased. Clerk’s Record, Vol. 1 – 95. Second, Westerburg
delivered to the Western Royalty a written demand for examination of sixteen
specific categories of books and records on or about February 19, 2014. Clerk’s
Record, Vol. 1 – 96-97. In that demand, Westerburg detailed his need for the
examination. Clerk’s Record, Vol. 1 – 96-97. Western Royalty refused to comply
with that request. Clerk’s Record, Vol. 1 – 97. Western Royalty did not contest any
of these facts in the summary judgment proceedings.
The only other issue was whether Westerburg had a proper purpose in
requesting the examination of books and records. California probate law requires
an administrator to file with the California Probate Court Clerk an inventory of the
property to be administered in a Decedent’s estate together with an appraisal. Cal.
Prob. Code §§ 8800(a), 8804, and 8850(a); Clerk’s Record, Vol. 1 – 95, 101-103.
In order to satisfy this obligation, Westerburg needed to determine the fair market
17
value of the Estate of R.D. West’s interest in Western Royalty. Western Royalty is
not a publically traded company nor does it produce and distribute any information
to its shareholders from which a determination of the fair market value of the stock
can be made. Clerk’s Record, Vol. 1 – 97. As such, Judge Sowder determined that,
as a matter of law, this need for information constitutes a proper purpose under
section 21.218 of the Texas Business Organizations Code. With those facts
established, Judge Sowder granted Westerburg’s request and ordered Western
Royalty to make available for examination and copying several specific categories
of documents. Clerk’s Record, Vol. 1 – 256-259.
B. Recovery of Attorney’s Fees is Mandatory
Once Judge Sowder determined that Westerburg is entitled to examine and
copy certain books and records of Western Royalty, the only remaining task is to
determine the amount of attorney’s fees, costs and expenses to award Westerburg.
If a corporation refuses to permit a person who is entitled to examine and make
copies of the books and records of a corporation pursuant to Section 21.218 of the
Texas Business Organizations Code, the corporation becomes liable for the
person’s cost or expenses, including attorney’s fees. Specifically, the Texas
Legislature mandates that:
A corporation that refuses to allow a person to examine
and make copies of account records, minutes, and share
transfer records under Section 21.218 is liable to the
shareholder for any cost or expense, including attorney’s
18
fees, incurred in enforcing the shareholder’s rights under
Section 21.218.
Tex. Bus. Orgs. Code § 21.222 (highlight added). The Texas Supreme Court has
ruled that statutes which read that a party “may recover”, “shall be awarded”, or “is
entitled to” attorney fees are not discretionary. Bocquet v. Herring, 972 S.W.2d 19,
20 (Tex. 1998). Conversely, statutes which provide that a court “may” award
attorney fees vest some discretion in the trial court regarding such an award. Id. at
20. By employing the language “is liable” in section 21.222 of the Texas Business
Organizations Code rather than “may award”, the Texas Legislature mandated that
the Trial Court award attorney’s fees, costs and/or expenses to any party that
enforced a shareholder’s rights under Section 21.218 of the Texas Business
Organizations Code. The Trial Court does not have the discretion to refuse to award
such attorney’s fees, costs and/or other expenses.
In this case, Westerburg incurred $13,487.50 in attorney’s fees and $588.09 in
costs in enforcing the shareholder’s rights under Section 21.218 of the Texas
Business Organizations Code through the summary judgment proceeding at the trial
court level. Clerk’s Record, Vol. 1 – 237-244. Additionally, Westerburg’s cost of
appealing this matter to the Court of Appeals is $5,000. Further, the cost of handling
any post-judgment motions was $1,000. Westerburg offered such evidence through
the affidavits of Steven Thornton and Robert Westerburg. Clerk’s Record, Vol. 1 –
19
237-244. Judge Sowder’s Final Summary Judgment awarded the $588.09 in costs to
Westerburg. Clerk’s Record, Vol. 1 – 256-259.
Western Royalty wholly failed to put on any evidence as to the reasonableness
of the cost or the necessity of Westerburg’s attorney’s fees at the Trial Court. As
such, Westerburg’s testimony is uncontroverted and can support an award of
attorney’s fees from this Court.
C. Western Royalty’s Contentions on Attorney’s Fees are Meritless
Western Royalty contended at the summary judgment proceeding that, despite
the clear language in Section 21.222 of the Texas Business Organizations Code, the
Trial Court and this Court should not award Westerburg recovery for his attorney’s
fees, costs and expenses. Western Royalty supported this contention by citing to the
Trial Court several federal cases. These cases are a red herring. They do not apply to
the facts of this litigation and none of them reach the conclusion that Western
Royalty is asking this Court to reach: that the Estate of R.D. West is not entitled to
recover its attorney’s fees, costs and expenses. Thus, these cited cases have no
precedential value and should not be considered.
C.1. Westerburg is Not Pro Se
In virtually every case that Western Royalty cited to the Trial Court, the
plaintiff is acting as a pro se litigant. That is simply not the case in this cause. First,
Westerburg hired Westerburg & Thornton, P.C. to represent him in this matter.
20
Clerk’s Record, Vol. 1 – 97. Westerburg’s counsel, Steven Thornton, has
represented him on this matter from the inception of the litigation. Clerk’s Record,
Vol. 1 – 97. Westerburg is not acting as his own personal attorney. Second,
Westerburg is not personally involved in this litigation. Rather, Westerburg is
acting in his capacity as the administrator of the Estate of R.D. West and is seeking to
enforce the Estate’s rights to examine the books and records of Western Royalty.
Clerk’s Record, Vol. 1 – 95-97. Therefore, none of the cases cited by Western
Royalty are on point or have any precedential value.
Moreover, Texas law provides that an attorney or a law firm may recover its
attorney’s fees when it is represented by a lawyer working for that law firm.
Campbell, Athey & Zukowski v. Thomasson, 863 F.2d 398, 400 (5th Cir. 1989).
Additionally, a company can recover attorney’s fees for services from an in-house
counsel. Tesoro Petroleum Corp. v. Coastal Refining and Marketing, Inc., 754
S.W.2d 764, 766-67 (Tex. App. – Houston [1st Dist.] 1988, writ denied). Since
Westerburg is represented by counsel in this matter, any prohibitions against pro se
recovery of attorney’s fees are not applicable to this cause.
C.2. Western Royalty’s Cited Cases Are Not Applicable to
this Cause
All but one of the cases that Western Royalty cited to the trial court concern
the attempt to recover attorney’s fees by a pro se attorney in a case involving a
federal statute. Erickson v. Board of Education of Baltimore County, 162 F.3d 289
21
(4th Cir. 1998) (pro se representing his own child for special education and related
services under the Individual with Disabilities Act); Lawrence v. Bowsher, 931
F.2d 1579 (D.C. Cir. 1991)(pro se bringing claims for discrimination against
General Accounting Office under 42 U.S.C. § 1981, 1988); Ray v. U.S.
Department of Justice, 87 F.3d 1250 (11th Cir. 1996)(pro se bringing claims under
the Freedom of Information Act); Elwood v. Drescher, 456 F.3d 943 (9th Cir.
2006)(pro se defendant sought recovery of attorney’s fees arising from a claim
under 42 U.S.C. § 1983, 1988). As Westerburg is not pro se in this matter, these
cases are not applicable and should have no precedential value.
The only case not involving a pro se litigant was Sanchez & Sleeman v. City
of Austin. That case involved a federal district court deciding against awarding
attorney’s fees to a prevailing party for claim under 42 U.S.C. § 1988. Sanchez &
Sleeman v. City of Austin, 2013 U.S. Dist. LEXIS 189178 (W.D. Tex. 2013).
Congress vested the trial courts with some discretion in awarding attorney’s fees
under section 1988 by writing: “In any action or proceeding to enforce a provision
of sections 1981…, the court, in its discretion, may allow the prevailing party,
other than the United States, a reasonable attorney’s fee as part of the costs…”.
42 U.S.C. § 1988(b). On appeal, the Fifth Circuit reversed that district court in
Sanchez and awarded the prevailing party their attorney’s fees. Sanchez &
Sleeman v. City of Austin, 774 F.3d 873, 875 (5th Cir. 2014). The Fifth Circuit
22
described that any discretion that the district court had in awarding attorney’s fees
is “exceedingly narrow”. Id. at 878. Moreover, the use of the language “may
allow” in 42 U.S.C. § 1988 is the exact language that the Texas Supreme Court
considers discretionary. Bocquet, 972 S.W.2d at 20.
However in this case, section 21.222 of the Texas Business Organizations
Code provides no discretion to a trial court for the recovery of attorney’s fees. If a
corporation refuses to allow a person to examine and make copies of its books and
records pursuant to Section 21.218, that corporation is liable for cost and expenses,
including attorney’s fees. Tex. Bus. Orgs. Code § 21.222. As the Texas Legislature
did not vest any discretion with the trial courts, Judge Sowder did not have the power
or discretion to deny Westerburg’s request for attorney’s fees.
23
CONCLUSION and PRAYER
Westerburg contends that Judge Sowder erred when he denied Westerburg’s
request for attorney’s fees after determining that Westerburg was entitled to review
Western Royalty’s books and records pursuant to section 21.218 of the Texas
Business Organizations Code. Westerburg put on evidence of each element of his
claim to access to Western Royalty’s books and records. Judge Sowder held that
there were no genuine issues of material fact regarding those elements and
rendered a summary judgment in favor of Westerburg granting him access to eight
specific categories of documents. Once Judge Sowder made that ruling, section
21.222 of the Texas Business Organizations Code mandated that Judge Sowder
grant Westerburg’s claim for recovery of costs and expenses, including attorney’s
fees. Westerburg put on evidence of his attorney’s fees, costs and expenses.
Western Royalty did not object or put on any evidence to counter the necessity or
reasonableness of those fees, costs and/or expenses. Judge Sowder granted
Westerburg’s request for costs and expenses. Despite the language in section
21.222 of the Texas Business Organizations Code and his award of access to the
books and records of Western Royalty and for costs and expenses, Judge Sowder
denied Westerburg’s claim for recovery of attorney’s fees.
24
For the reasons stated herein, Westerburg prays that this Court reverse the
portion of Judge Sowder’s ruling in the Final Summary Judgment which denied
Westerburg’s claim for recovery of attorney’s fees. Given the evidence adduced at
the summary judgment proceeding, Westerburg further prays that this Court render
a judgment in favor of Westerburg for his total attorney’s fees through this appeal.
Finally, Westerburg also prays for all other relief, in law and equity, to which he
may be justly entitled.
Respectfully submitted,
WESTERBURG & THORNTON, P.C.
6060 N. Central Expressway, Suite 690
Dallas, Texas 75206
Phone No.: 214.528.6040
Facsimile: 214.528.6170
steve@mwtlaw.com
By: ______________________________
Steven Thornton
State Bar No. 00789678
ATTORNEY FOR PLAINTIFF
25
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 and the Texas Rules of
Appellate Procedure on this 6th day of May, 2015.
Steven Thornton
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify
that this brief contains 3,136 words (excluding the caption, identity of parties,
table of contents, table of authorities, statement of case, statement of issues
presented, statement of jurisdiction, signature, proof of service, certification,
and certificate of compliance). This is a computer-generated document created
in Microsoft Word, using 14-point typeface for all text, except for footnotes
which are in 12-point typeface. In making this certificate of compliance, I am
relying on the word count provided by the software used to prepare the
document.
Steven Thornton
26
APPELLANT’S APPENDIX
List of Documents
Final Summary Judgment A
California Probate Code § 8800 B
California Probate Code § 8804 C
California Probate Code § 8850 D
Tex. Bus. Orgs. Code § 21.218 E
Tex. Bus. Orgs. Code § 21.222 F
27
12.W2014 11:15:00 ""'--8Uclr
APPENDIX A i"IIMt"CIII*
TB
NO. 2014-510,562
ROBERT WESTERBURG, § IN THE DISTRICT COURT
ADMINISTRATOR OF THE ESTATE OF §
R.D. WEST a/k/a RANDY DIXON §
WESTERBURG §
§ 991H JUDICIAL DISTRICT
\r.S, §
§
WESTERN ROYALTY CORP. § LUBBOCK COUNTY, TEXAS
Flnallymmarv Judgmpnt
On December 8 2014, the Court considered the following motions by
submission made In the above..ntltled and numbenld cause:
a. P/Bintifrs Motion for Summary Judgment; and,
b. Defendant Western Royalty ColponJtton's Motion for SumtmJI)'
Judgment
Altar consldellng the motions, pleadings, evidence and the appropriate legal authority,
In part
this Court Is d the opinion that Plaintiff's motion should be GRANTED and that
in part
Defendanfs motion should be DENIED.
IT IS, THERFORE, ORDERED, ADJUDGED AND DECREED that Plaintiff Robert
Weetelburg, Administrator of the Estate of R.D. West a/kla Randy Dbcon Weeterburg's
Motion for Summmy Judgment Is GRANTED~" pert
IT IS FURTHER ORDERED that Dafendant Westem Royalty Corporation's
·n part
Motion for Summ&Jy Judgment is DENIED~
IT IS FURTHER ORDERED that the Defendant Weetem Royalty CorporatiOn
shall produce to Plaintiff Robert Westerburg, Administrator of the Estate of R.D. West
8/kJa Randy Dixon Weatetburg the follOWing documents:
256
1. The records containing the names and addresses of all past and current
shareholders of the corporation and the number and class or series of shares
issued by the corporation held by each of them.
2. The records containing the names and last known mailing addresses of
shareholders entitled to vote at any shareholders meeting.
3. The bank statements and cancelled checks for the period January 1, 2009, to
the present.
4. The cash flow report(s) and/or check register and/or check stubs reflecting
the monies received and the expenditures made for the period January 1,
2009, to the present.
5. The documents describing the mineral interest and/or legal description of
each mineral interest presently owned by Western Royalty Corp.
6. The deeds evidencing Western Royalty Corp.'s ownership of mineral or
royalty interests.
7. The documents evidencing ownership, leasehold, or royalty interest in real or
personal property owned by Western Royalty Corp.
8. The Division Orders reflecting mineral interests owned by Western Royalty
Corp.
IT IS FURTHER ORDERED that Defendant Western Royalty Corporation shall
copy and email the above-described documents to Plaintitrs counsel, Steven Thornton.
Defendant Western Royalty Corporation shall Bates-label the above-described
documents and shall identify which documents are responsive to which categories set
forth in this Order. Plaintiff shall reimburse Defendant for the reasonable costs of
photocopying the above-described documents.
IT IS FURTHER ORDERED that Defendant Western Royalty Corporation shall
produce the above-described documents listed in this Order to Plaintitrs counsel,
Steven Thornton, on or before _D_e_ce_m_b_e_r_1_8_th_ _ _ _ _ _ , 2014 at 5:00p.m.
Final Summary Judgment Page2
257
IT IS FURTHER ORDERED that Plaintiff have and recover from Defendant
$0.00
Western Royalty Corporation the sum of $13,487.50 as reasonable and necessary
attorney's fees incurred in this cause.
IT IS FURTHER ORDERED that Plaintiff have and recover from Defendant
Western Royalty Corporation the sum of $588.09 for costs incurred in this cause.
·-~URTHER ORDERED that Plaintiff have and recover from t
Western Royalty Corporation ve Thousand Dollars ($5,000.00) as
c
IT IS FURTHER ORDERED that the costs of court are taxed against the
Defendant Western Royalty Corporation for which let execution issue if the same are
not timely paid.
IT IS FURTHER ORDERED that this judgment carries post-judgment interest at the
rate of 5.00% per annum from the date of this judgment until paid, together with all costs of
court in this behalf expended.
All writs and processes for the enforcement and collection of this judgment or the
costs of court may issue as necessary.
All relief requested in this case and not expressly granted herein is denied. This
judgment, disposing of all the parties in the lawsuit and all of the issues, is final and
appealable.
Final Summary Judgment Page3
258
December 8, 2014
SIGNED on-----------"
w£&``&~' -
JUDGE PRESIDING
259
.. APPENDIX B
Page 1
®
LexisNexis®
1 of 3 DOCUMENTS
Deering's California Codes Annotated
Copyright BUSINESS ORGANIZATIONS CODE > TITLE 2. CORPORATIONS >
CHAPTER 21. FOR-PROFIT CORPORATIONS > SUBCHAPTER E. SHAREHOLDER RIGHTS AND
RESTRICTIONS
§ 21.218. Examination of Records
(a) In this section, a holder of a beneficial interest in a voting trust entered into under Section 6.251 is a holder of the
shares represented by the beneficial interest.
(b) Subject to the governing documents and on written demand stating a proper purpose, a holder of shares of a
corporation for at least six months immediately preceding the holder’s demand, or a holder of at least five percent
of all of the outstanding shares of a corporation, is entitled to examine and copy, at a reasonable time, the
corporation’s relevant books, records of account, minutes, and share transfer records. The examination may be
conducted in person or through an agent, accountant, or attorney.
(c) This section does not impair the power of a court, on the presentation of proof of proper purpose by a beneficial
or record holder of shares, to compel the production for examination by the holder of the books and records of
accounts, minutes, and share transfer records of a corporation, regardless of the period during which the holder was
a beneficial holder or record holder and regardless of the number of shares held by the person.
History
Enacted by Acts 2003, 78th Leg., ch. 182 (H.B. 1156), § 1, effective January 1, 2006.
Annotations
Notes
Revisor’s Notes. --
No substantive change is intended.
Case Notes
Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights: General
Overview
Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights: Inspection
Rights: Remedies
Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights: Inspection
Rights: Shareholders
LexisNexis (R) Notes
Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights:
General Overview
1. Divorced wife, who had beneficial ownership of 10 percent of corporate stock standing on corporate records in the name
of her former husband or a trustee, was entitled to examine the corporate books. Texas Infra-Red Radiant Co. v. Erwin, 397
S.W.2d 491, 1965 Tex. App. LEXIS 2378 (Tex. Civ. App. Eastland 1965).
Steve Thornton
Page 2 of 2
Tex. Business Organizations Code § 21.218
Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights:
Inspection Rights: Remedies
2. Attorney’s fees should not have been awarded to a minority shareholder because the evidence did not show that
corporate books and records had been withheld in violation of former Tex. Bus. Corp. Act Ann. art. 2.44(C) (recodified at
Tex. Bus. Orgs. Code Ann. § 21.218(b)). The company was entitled to impose reasonable restrictions for the protection and
integrity of its books and records when it required that certain items be copied on its premises. Ritchie v. Rupe, 339 S.W.3d
275, 2011 Tex. App. LEXIS 2217 (Tex. App. Dallas 2011).
Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights:
Inspection Rights: Shareholders
3. Attorney’s fees should not have been awarded to a minority shareholder because the evidence did not show that
corporate books and records had been withheld in violation of former Tex. Bus. Corp. Act Ann. art. 2.44(C) (recodified at
Tex. Bus. Orgs. Code Ann. § 21.218(b)). The company was entitled to impose reasonable restrictions for the protection and
integrity of its books and records when it required that certain items be copied on its premises. Ritchie v. Rupe, 339 S.W.3d
275, 2011 Tex. App. LEXIS 2217 (Tex. App. Dallas 2011).
LexisNexis ® Texas Annotated Statutes
Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved.
Steve Thornton
APPENDIX F
Tex. Business Organizations Code § 21.222
This document is current through the 2013 3rd Called Session
Texas Statutes and Codes > BUSINESS ORGANIZATIONS CODE > TITLE 2. CORPORATIONS >
CHAPTER 21. FOR-PROFIT CORPORATIONS > SUBCHAPTER E. SHAREHOLDER RIGHTS AND
RESTRICTIONS
§ 21.222. Penalty for Refusal to Permit Examination of Certain Records
(a) A corporation that refuses to allow a person to examine and make copies of account records, minutes, and share
transfer records under Section 21.218 is liable to the shareholder for any cost or expense, including attorney’s fees,
incurred in enforcing the shareholder’s rights under Section 21.218. The liability imposed on a corporation under
this subsection is in addition to any other damages or remedy afforded to the shareholder by law.
(b) It is a defense to an action brought under this section that the person suing:
(1) has, within the two years preceding the date the action is brought, sold or offered for sale a list of shareholders
or of holders of voting trust certificates for shares of the corporation or any other corporation;
(2) has aided or abetted a person in procuring a list of shareholders or of holders of voting trust certificates for
the purpose described by Subdivision (1);
(3) has improperly used information obtained through a prior examination of the books and account records,
minutes, or share transfer records of the corporation or any other corporation; or
(4) was not acting in good faith or for a proper purpose in making the person’s request for examination.
History
Enacted by Acts 2003, 78th Leg., ch. 182 (H.B. 1156), § 1, effective January 1, 2006; am. Acts 2011, 82nd Leg., ch.
139 (S.B. 748), § 25, effective September 1, 2011.
Annotations
Notes
Revisor’s Notes. --
No substantive change is intended.
2011 amendment,
deleted ″in consideration″ after ″certificates″ in (b)(1).
Case Notes
Business & Corporate Law: Corporations: Shareholders: Actions Against Corporations: General Overview
Civil Procedure: Remedies: Writs: General Overview
LexisNexis (R) Notes
Business & Corporate Law: Corporations: Shareholders: Actions Against Corporations: General Overview
1. Shareholder that brought suit against a corporation seeking permission to examine the books and records of the
corporation was entitled to attorney fees because the shareholder was the ″shareholder of record″ even though the shares
were in the name of another pledgee to secure payment of corporate debt. Ft. Worth KJIM, Inc. v. Walke, 604 S.W.2d 362,
Steve Thornton
APPENDIX F Page 2 of 2
Tex. Business Organizations Code § 21.222
1980 Tex. App. LEXIS 3757 (Tex. Civ. App. Fort Worth 1980).
Civil Procedure: Remedies: Writs: General Overview
2. Where the relators, a company, and certain of its officers, brought a mandamus proceeding before the court to have the
trial court expunge from the record an order for discovery, the court held that the trial court, in granting certain
stockholders’ motion for discovery, had deprived relators of a jury trial on the issue of proper purpose because the
stockholders would have received through the order allowing discovery all of the relief sought in the main suit, and thus
relators were entitled to a writ of mandamus ordering the trial court to expunge its order for discovery. Uvalde Rock Asphalt
Co. v. Loughridge, 425 S.W.2d 818, 1968 Tex. LEXIS 314, 11 Tex. Sup. Ct. J. 268 (Tex. 1968).
LexisNexis ® Texas Annotated Statutes
Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved.
Steve Thornton