Jeffrey M. Templeton, Director and Shareholder v. RKR Investments Inc., a Nevada Corp. RKR Operations, Inc., a Texas Corp. RKR Technologies, LTD., a Texas Limited Partnership And Bob Reece, as Trustee of the Bobby Neale Reece Revocable Trust ( 2018 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-18-00024-CV
JEFFREY M. TEMPLETON, APPELLANT
DIRECTOR AND SHAREHOLDER
V.
RKR INVESTMENTS INC., A APPELLEES
NEVADA CORP.; RKR
OPERATIONS, INC., A TEXAS
CORP.; RKR TECHNOLOGIES,
LTD., A TEXAS LIMITED
PARTNERSHIP; AND BOB REECE,
AS TRUSTEE OF THE BOBBY
NEALE REECE REVOCABLE
TRUST
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FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 048-290383-17
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MEMORANDUM OPINION1
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1
See Tex. R. App. P. 47.4.
I. INTRODUCTION
In this interlocutory appeal, Appellant Jeffrey M. Templeton (Templeton)
raises four issues challenging the trial court’s order appointing a receiver for
Appellee RKR Investments, Inc. (Investments). Because the trial court did not
abuse its discretion by appointing a receiver, we will overrule Templeton’s first
and fourth issues. Because we lack jurisdiction over Templeton’s second and
third issues, we will dismiss them, and we will affirm the trial court’s order.
II. FACTUAL AND PROCEDURAL BACKGROUND
Jon Hill is Investments’ president. Investments manufactures and sells
aerospace fasteners; it was restructured to its current organizational status in
1998. Investments is a Nevada corporation and currently has two directors:
Templeton and Bob Reece. Templeton, as the independent executor of Charles
Ramsey’s estate, owns approximately 40% of Investments’ shares. Appellee
Bob Reese, as trustee of the Bobby Neale Reece Revocable Trust (Reece),
owns approximately 41% of Investments’ shares.
Templeton––who is a CPA––filed suit as a director of Investments seeking
to access the books and financial records of Investments and its subsidiaries for
an audit. The lawsuit prompted settlement discussions and a Rule 11
agreement, which Templeton and Investments read into the record. The Rule 11
agreement provided, in pertinent part, that Investments would conduct a “data
pull with administrative access on QuickBooks and put the data on a CD” to be
delivered to Templeton in seven days, with the same data pull to take place each
2
month thereafter, and would engage in a good-faith, full-day mediation before
pursuing any further litigation that might arise out of the Rule 11 agreement.
Eventually, Reece filed a petition in intervention seeking the appointment
of a receiver pursuant to Nevada law and sought other relief. According to
Reece, the parties had previously agreed to sell Investments, and Templeton
was thwarting the sales process. According to Templeton, if the sale is
consummated before an audit, any wrongdoing that had occurred in the
management of Investments’ and its subsidiaries’ funds would be forever lost in
the transaction.
The trial court conducted hearings on Reece’s request for a receiver to be
appointed pursuant to Nevada law, as well as on several other pending
motions—including Templeton’s motion to strike the petition in intervention and a
request for the appointment of a custodian. The trial court eventually received
testimony from Hill and Templeton2 and stipulations from the parties. Hill testified
that Investments had incurred $495,000 for legal and accounting fees associated
with this lawsuit.
At one of the hearings on October 31, 2017, Templeton agreed in his
opening statement that a third-party neutral was needed to help the companies
decide the next steps—sell, audit, or both—but suggested that a custodian rather
2
The trial court excluded Templeton’s expert, Lisa Lott, from testifying at
the hearing due to Templeton’s failure to disclose Lott as a witness. Templeton
made an offer of proof but does not challenge the trial court’s ruling excluding
Lott’s testimony.
3
than a receiver be appointed, and that the third-party should primarily be
concerned with an audit and not simply consummating a sale.3 The parties went
off the record to try to resolve their dispute and then placed the following
agreement on the record:
THE COURT: I am. Let me see if I understand the basic outline of
an agreement between the parties without taking or contracting.
The parties have agreed that pursuant to the applicable Nevada law
that a receivership -- that facts exist for the appointment of a
receivership in this case is first.
[TEMPLETON’S COUNSEL]: Yes.
THE COURT: Then, number two, that the parties have not reached
an agreement on the form or substance of the order appointing the
receiver.
[TEMPLETON’S COUNSEL]: Correct.
[REECE’S COUNSEL]: That is correct.
3
Templeton’s counsel argued:
And there are several points of agreement, so let me kind of go to
the points of agreement, see if that shortens this. We do agree there
is a deadlock. We do agree Nevada law applies. We suggest that
the Nevada statute that applies is the one that's directly on point,
which appoints a custodian.
....
. . . And our suggestion is to appoint a custodian to get to the
bottom of -- if there is nothing there, fine, but we think a custodian
needs to be appointed under Nevada law to determine what's there,
is there anything there. So regardless of what we call this person, we
all agree a third party should be appointed.
4
THE COURT: Each party will -- having stipulated that the facts exist
for the appointment of a receiver, will submit to me a form of an
order that they would like to see entered by Thursday, November the
2nd, at 5:00 p.m., by electronic filing.
[TEMPLETON’S COUNSEL]: Correct.
THE COURT: Is that correct?
[REECE’S COUNSEL]: That’s correct.
THE COURT: And each party has a right to submit by 5:00 p.m. on
Friday -- that would be November the 3rd -- the name and resume of
a proposed receiver. Further, each party will by -- this is not
discretionary -- will submit by 5:00 p.m. on Friday a brief outline of
the skills or attributes which they think are -- might be appropriate for
this receiver to have. Is that agreed?
[TEMPLETON’S COUNSEL]: Yes, sir.
THE COURT: Understood?
[REECE’S COUNSEL]: Understood, Your Honor.
THE COURT: All right. Agreed?
[REECE’S COUNSEL]: Agreed.
[TEMPLETON’S COUNSEL]: Agreed.
Later, the trial court addressed the language of the proposed order appointing a
receiver, which indicated the trial court’s understanding that both sides agreed to
a receiver, just not the details of who would be receiver and the scope of the
receiver’s authority:
[THE COURT]: . . . The form of the receiver order that’s to be drafted
should be an order that is -- reflects that it is a determination by the
Court that -- that in light of the stipulation, the Court is -- will appoint
a receiver with the following powers and authorities, stuff.
[Emphasis added]
5
As the parties continued to try to work out the details of whether Texas or
Nevada receiver law would govern, again, Templeton’s counsel, Reece’s
counsel, and the trial court all agreed on the record that––regardless of the
applicable state law and regardless of the scope of the receiver’s authority,
matters on which the parties did not agree––the parties had in fact stipulated to
the appointment of a receiver:
[REECE’S COUNSEL]: Well, Your Honor, we have in the record
now that -- that [the court reporter] has typed the stipulation we had
that there were grounds sufficient for the appointment of a receiver
and both parties stipulated the need for a receiver --
THE COURT: Right.
[REECE’S COUNSEL]: -- under the applicable -- we’ll just say under
applicable law. How’s that?
THE COURT: That’s fine with me.
[TEMPLETON’S COUNSEL]: Fine with me.
Following the October 31, 2017 hearing, Templeton submitted two letters to the
trial court concerning the appointment of a receiver, Templeton’s proposed
receivers, and proposed “agreed” orders for the appointment of a receiver.4
4
The November 2, 2017 letter included a proposed receivership order,
approved as to form and content, and suggested that “[t]he receiver should have
the freedom to perform an audit or any other investigation, if he deems it
material.” The letter also requested that the scope of the receiver’s control be
expansive: “The receiver should also have control of all assets of [Investments]
not just those enumerated.” [Emphasis added] The letter concluded by
explaining that Templeton’s proposed order “does not restrict the receiver.” The
November 3, 2017 letter included the résumés of two individuals that Templeton
suggested would have attributes “the receiver must have in this case[.]”
6
In the November 20, 2017 hearing, Hill testified that, as a result of this
lawsuit, Investments had incurred “around $495,000 for legal fees and
accounting fees.”
On December 28, 2017, the trial court appointed J. Robert Forshey as
receiver, with duties to include, among other things, a determination of whether
the subsidiaries or divisions of Investments should be sold.5 Templeton appeals
from the December 28, 2017 order.
III. STANDARD OF REVIEW
The appointment or termination of a receivership is within the appointing
court’s sound discretion. Spiritas v. Davidoff, 459 S.W.3d 224, 231 (Tex. App.—
Dallas 2015, no pet.); Unit 82 Joint Venture v. Int’l Commercial Bank of China,
Los Angeles Branch, 460 S.W.3d 616, 627 (Tex. App.—El Paso 2014, pet.
Templeton concluded the letter by stating, “[Templeton] seeks an independent
receiver who is employed to dive deeply into the books and records of
[Investments].” As detailed above, Templeton’s counsel agreed on the record
that a receiver should be appointed. And Templeton presented the trial court
with stipulated facts that Templeton and Reece as directors were deadlocked on
whether to pursue the sales of subsidiaries or divisions of Investments, whether
to make distributions to shareholders of Investments, and whether distributions
and accounting records in December of 2014 were made and if so, were proper.
5
The pertinent Nevada statute expressly provides for the appointment of a
receiver if a corporation’s assets are in danger of sacrifice or loss due to
litigation. See Nev. Rev. Stat. Ann. § 78.650(e) (West); Transcon. Oil Co. of
Nev. v. Free, 391 P.2d 317, 319 (Nev. 1964) (“78.650(1) lists 10 circumstances,
any one of which will authorize the appointment of a temporary receiver upon
application by a holder of 10% of the outstanding stock.”) (emphasis added).
7
denied) (citing Gilles v. Yarbrough, 224 S.W.2d 720, 722 (Tex. Civ. App.––Fort
Worth 1949, no writ)). To determine whether a trial court abused its discretion,
we must decide whether the trial court acted without reference to any guiding
rules or principles, such that its ruling was arbitrary or unreasonable. Low v.
Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire v. Cummings, 134 S.W.3d 835,
838–39 (Tex. 2004). A trial court also abuses its discretion by ruling without
supporting evidence. Ford Motor Co. v. Garcia, 363 S.W.3d 573, 578 (Tex.
2012). An abuse of discretion does not occur when the trial court bases its
decision on conflicting evidence and some evidence of substantive and probative
character supports its decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92,
97 (Tex. 2009); Butnaru v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex. 2002) (op.
on reh’g).
IV. ANALYSIS
“One who invokes the jurisdiction of the court to appoint a receiver of his
property cannot thereafter question the validity of the appointment for want of
jurisdiction.” In re Marriage of Davis, 418 S.W.3d 684, 691 (Tex. App.—
Texarkana 2012, no pet.) (quoting B & W Cattle Co. v. First Nat’l Bank of
Hereford, 692 S.W.2d 946, 951 (Tex. App.––Amarillo 1985, no writ); citing Cross
v. Cross, 738 S.W.2d 86, 87–88 (Tex. App.––Corpus Christi 1987, writ dism’d
w.o.j.)). We hold that Templeton’s repeated requests in the trial court that a
receiver be appointed bar his challenge in this interlocutory appeal to the
appointment of the receiver. See id.
8
After oral argument, Templeton submitted a letter brief asserting that he
did not agree to the appointment of a receiver. Assuming this to be the case, we
alternatively hold that the stipulated facts agreed to by the parties coupled with
Appellees’ evidence, which includes evidence of $495,000 in litigation and
accounting expenses, support the trial court’s appointment of a receiver under
the Nevada statute referenced in the trial court’s order appointing the receiver.
See Nev. Rev. Stat. Ann. § 78.650(e) (providing for appointment receiver if
corporation’s assets are in danger of sacrifice or loss due to litigation).
Therefore, even in the absence of Templeton’s agreement to the appointment of
a receiver, the trial court did not abuse its discretion by appointing one under this
provision of Nevada law. We overrule Templeton’s first and fourth issues
claiming that the trial court abused its discretion by appointing a receiver and that
the evidence is insufficient to support appointment of a receiver.
In his second issue, Templeton argues that Reece lacks standing to file an
intervention because he did not first participate in a day-long mediation prior to
further litigation as required by the Rule 11 agreement. Reece points out, and
we agree, that Templeton’s complaint is fundamentally one that the trial court did
not compel mediation. That complaint was not raised in the trial court––
Templeton did not file a motion to compel mediation—and is not reviewable in
this interlocutory appeal in any event. See Mustafa v. Rippy, No. 03-15-00422-
CV, 2015 WL 5666902, at *1 (Tex. App.—Austin Sept. 24, 2015, no pet.) (mem.
op. on reh’g) (“[W]e lack jurisdiction to review an interlocutory order denying
9
referral of a matter to mediation.”); In re D. C., Jr., No. 07-11-00046-CV, 2011
WL 691633, at *1 (Tex. App.—Amarillo Feb. 28, 2011, no pet.) (mem. op.) (“We
have no appellate jurisdiction to review an interlocutory order granting or denying
referral of a matter to mediation.”); Banc of Am. Inv. Servs., Inc. v. Lancaster, No.
2-04-00223-CV, 2004 WL 1879597, at *1 (Tex. App.—Fort Worth Aug. 24, 2004,
no pet.) (mem. op.) (dismissing for want of jurisdiction attempted appeal from the
trial court’s order of referral to mediation). We dismiss Templeton’s second
issue.
In his third issue, Templeton challenges the trial court’s denial of his
request for an appointment of a custodian under Nevada law. Appellees contend
that this issue is also not reviewable by interlocutory appeal. In his reply brief,
Templeton appears to concede the point.6 Templeton directs us to no statute
authorizing an interlocutory appeal of a trial court’s denial of a request for
appointment of a custodian, and we are aware of none.7 Because we lack
jurisdiction over Templeton’s third issue, we dismiss it.
6
To the extent Templeton argues in his reply brief that Appellees failed to
establish the harm element necessary to support a temporary injunction, this
issue was neither raised nor briefed in Templeton’s opening brief. Accordingly, it
is waived. See Tex. R. App. P. 38.3; Priddy v. Rawson, 282 S.W.3d 588, 597
(Tex. App.—Houston [14th Dist.] 2009, pet. denied) (“The Texas Rules of
Appellate Procedure do not allow an appellant to include in a reply brief a new
issue not raised in the appellant’s original brief.”).
7
See, e.g., Tex. Civ. Prac. & Rem. Code Ann. § 51.014 (West Supp. 2017);
see also McGary v. James, 381 P.3d 639 (Nev. 2012) (relying on Shapemasters
Golf Course v. Shapemasters, 602 S.E.2d 83, 86–87 (S.C. Ct. App. 2004), to
support dismissal of attempted interlocutory appeal of order refusing to terminate
10
V. CONCLUSION
Having overruled Templeton’s first and fourth issues and having dismissed
his second and third issues, we affirm the trial court’s order appointing a
receiver.8
/s/ Sue Walker
SUE WALKER
JUSTICE
PANEL: WALKER, MEIER, and BIRDWELL, JJ.
DELIVERED: May 24, 2018
corporate custodian because “an order appointing or continuing the appointment
of a custodian, unlike an order appointing a receiver, is a non-appealable
interlocutory order”).
8
After this case was set for submission, Templeton filed a “Motion to Strike
Brief of RKR Investments, Inc. and Stay Further Actions by Receiver.” All relief
requested in that motion and all other post-submission filings is denied as moot.
11