### NUM BER 13-06- 112- CV 

## COURT OF A PP EA LS T H I R T E E N T H D I S T R I C T O F T E X AS C OR P U S C H R I S T I -E D I N B U R G
M ICHA EL GIBNEY , I NDIVI DUA LLY A ND ON B EHA LF OF M ICR O B LE ND , INC ., A pp ellan ts,
v. R OY C U LVE R , J R ., C U LVE RIN T ER ES T S, A ND A NA-T ECH , INC ., A pp ellees . On ap pe al f rom th e 3 6th D istrict Co urt of Sa n PatricioC ou nty , T exas . 

## ME MOR A N D U M OP I N I ON B efo re C h ie f Ju st ic e Va ld eza n d J u st ic es R o d rig u eza n d G arza

M em o ra n d u m Op in io n b y J u st ic e Ga rza T his is a tw o-pa rt suit in w hich appe llant, Mi chae l Gibne y , individually and on be half of Mi cro- Bl end, Inc . ( “G ib n e y”), b roug ht ( 1) a s harehol der der iv ati v e s uitfor fraud andG i bneyer r oneou sl yconcl udes t hat t he t r i al cour t di sm i ssed hi s der i v at i v e cl ai m s agai nst Ana- T ech, 1 I nc. ( “ Ana- T ech” ) based on st at ut e of l i m i t at i ons g r ounds. T he r ecor d r ef l ect s t hat t he t r i al j udge di sm i ssed hi s cl ai m s aga i nst Ana- T ech b ased on h i s f ai l ur e t o pr ov i de e v i dence ofdam ages.

A r tic le 5 .1 4 ( L ) o fth e T e x a s B u s in e s s C o r p o r a tio n s A c t p r o v id e s th a t a “ c lo s e ly h e ld c o r p o r a tio n ” is 2 a cor por at i on w i t h l es s tha n t hi r t y - f i v e sha r ehol der s and t hat has no sh ar es l i st ed o n a nat i onal secur i t i es exchang e orr egul ar l y quot ed i n an ov er - t he- count er m ar k et bym em ber s of a nat i onal secur i t i es asso ci at i on. T EX
. B US
. C OR P
. A C T A NN . a rt. 5 .1 4 (L )( 2 ) (V e rn o n 2 0 0 3 ). 2 breac h o f

f iduci ar y duty ag ain st appel lee s, Roy C ulv er , J r. , M ic ro -B len d, I nc. , C ulv er Interest s, and An a- Tech, Incand (2 ) an i ndi vidu a li z ed c lai m for s harehol der oppress ion ag ain st Roy

hi msel f. Gi bney

se cured a jud g ment of $250,000 from the t ri al cour t, for sharehol der

oppress ion , ag ainstR o y , butthe tr ial co ur t, throug h a d irect ed v erdict, dis mis sed Gi bney ’s der iv ati v e c lai ms. By four is sues , G ibn ey

co ntends that( 1 ) th e tr ial
cour t erred in concl udi ng that his der iv ati v e clai ms aga ins t Cul v er Interest s w ere barred by t h e a p p li c a b le st a t u t e o f li m it a t io n s , (2 ) t h e t ri a l c o u rte rre d i n c o n c lu d in g t h a th is d e ri va t ive cl aims ag ain st Ana- Tech, Inc . were bar re d by the appl ic abl e s tatut e of li mita ti ons, ( 3) the 1 trial co urt’s d irected verdict on his derivativ e claims w as prem atu re a nd imp rope r in that it
w as not s uppor

ted b y the ev ide nce in the record, an d (4 ) the tr ial cour t er re d i n fail ing to award prejudgme nt inte re s tt o Gibne y . By three issue s, take n ou t of order, on crossapp eal, Roy asse rts th at (1) th e evidence in the reco rd is factu ally insuf f icient to supp ort the j ur y ’s findi ng s o f ex ces si v e c ompensat ion , ( 2) no “ sharehol der oppress ion ” occ ur re d
as a matt er

of law , and ( 3) the tria l co u rt ’s jud g ment awardin g i ndi v idu al damag es to Gibne y w a s e rron eou s as a ma tter of law . W e af

f irm in part an d reverse and rend er in par t. I. F A CTUA L B A CKGRO UND a. Micro-Blend, Inc . and Culver Intere sts Mi cro- Bl end, Inc . ( “M ic ro -B len d” ) is a c los e cor porati on or ig ina ll y formed in 1989. 2G i bneyasser t s t hat he was i nv ol v ed i n t he t echni cal aspect s of t he com pany and t hat he sp ent m ost 3 o fh is tim e o n th e r o a d “ v is itin g a n d s e r v ic in g th e b le n d in g s ys te m s .” G ib n e y a ls o n o te s th a t h e “ k n e w little ornot hi ng a boutt he d ayt o da yope r at i ons o ft he b usi ness” and t hat R oyi sol at ed hi m by “ r ef usi ng t o f ur ni sh o r d i s c l o s e i n fo rm a ti o n to h i m a b o u t t h e fi n a n c e s o f M i c ro -B l e n d , I n c . d e s p i te va rio u s d e m a n d s .”

R o y d o e s n o t d is p u te G ib n e y’s s e r v ic e a s V ic e - P r e s id e n t o fM ic r o - B le n d . H o w e v e r , R o y s im p ly 4 not es t hat “ [ h] e [ G i bney ] was a Vi ce Pr esi dentof t he co m panyf orseveral y ea rs
. . . .” O n ap peal , R oy cont ends t hat G i bneyv ol unt ar i l yr esi gned hi s posi t i on on t he boar d of di r ect or s “ aft erbeco m i ng d i ssat i sf i ed wi t h Cul v er ’ s [ R oy ’ s] m anage m ent and deci si ons by t he Boar d of D i r ect or s” and t hat G i bney“ nev eraga i n pu t h i m s e l f i n to c o n s i d e ra ti o n fo r m e m b e rs h i p o n th e B o a rd .”

T he r ecor d r ef l ect s t hat Kem p I ndust r i es pr oduced t en t o twel v e sy st em s f or M i cr o- Bl end dur i ng t he 5 r el ev ant t i m e f r am e. 3 Mi cro- Bl end manufact ured pat ented ble ndi ng syste ms for soft dr inks. T he i dea for Mi croBl end or ig ina ted w it h Gi bney and w as finance d by R oy
. There w ere o rig ina ll y four sharehol ders o f Mi cro- Bl end ati ts inc epti on—R oy , hi s b ro ther D oug C ulv er , G ibn ey , and Mi chael Luc as— and l ater g re w to a max imum of thi rty -four sh arehol ders. Mi cro- Bl end’ s c or porate g ov er nance st ru ctu re prov ide d for a fiv e- person board of direct ors ( the “ Board” ) to be elect ed at their annual sharehol ders’ m eeti ng s. Roy se rv ed on th e Bo a rd f ro m the formati on of M ic ro -B len d i n 1989 unti l 1991. D oug se rv ed on the Board from 19 89 unt il 1993. R oy , howev er , s er v ed as the chi ef ex ecut iv e off ic er of Mi croBl e nd since its inception . Gibney, the th ird larg est sha reho lder in Micro-Blen d, w as a memb e r of the Boa rd from 198 9 unt il 1994. G ibn ey as ser ts that he resi g ned from the 3 Board w it h the ti tl e of Vi ce- Presi dent of Mi cro- Bl end. 4 In 19 91 and 1992, Mi cro- Bl end’ s s y ste ms were ass embled on “ sk ids ” in Ing les ide , Tex as, w hic h w ere then deli v ered to the cus tomer and ins tal led , rath er

than as sembl ed on site at th e custo me r’s plan t. Micro-Blen d be gan cont racting w ith Kem p Ind ustries to b uild the syste ms on sk ids

. H ow ev er , Ke mp Indus tr ies had probl ems w it h q ual ity -c ontrol and 5 ti meli ness , s o an alt er nate pla n was needed. At a meeti ng on Aug ust 29, 1994, the B oard pas sed Gi bney ’s moti on to hav e R oyAppel l ees a sser t t hat t he co nt r act pr i ce be t ween Cul v erI nt er est s and M i cr o- Bl end was “ cost pl us 6 up t o a 12 % m ar k up— t he sa m e t hat had bee n cha r ged byKem p I ndust r i es. ” O n t he o t herhan d, G i bney m akes t he f ol l owi ng co nt ent i ons: Appel l ee- C ul v er[ R oy ] al so, owned t wo ( 2) com pani es, v i z , C ul v erI nt er est s and Ana- T ech, In c . C u lv e rIn te r e s ts w a s o r ig in a lly f o r m e d i n 9 3
- 9 4 b y a p p e lle e - C u lv e r , a n d o w n e d jo in tly wi t h hi s wi f e. T he j oi nt owner s hi p en ded upon di v or ce an d r esul t ed i n sol e owner shi p by a p p e l l e e -C u l v e r i n 1 9 9 4

. L a te r, i n 9 6 -9 7 , a p p e l l e e -C u l v e r, fo rm e d a n o th e r C u l v e r i n te re s ts w ith tw o ( 2 ) s h a r e h o ld e r s o f M ic r o - B le n d , In c ., n a m e ly M ic h a e l L u c a s a n d J .K . R a m s e y. T h is C u lv e rIn te r e s t “ N u m b e r3 " w a s o n ly in e x is te n c e f o rtw o ( 2 ) ye a r s ( 1 9 9 6
- 1 9 9 7 ) , its s o le cust om er was M i cr o- Bl end, I nc. , and was suppose d t o be m anuf act ur i ng sk i ds for M i cr oBl end, I nc. H owev er , t hi s C ul v eri nt er est “ N um ber2" wi t h no equ i pm ent , wi t h an add r ess on t he se cr et ar y , T er r i D oy el ’ s D esk, t ook $2. 75 m i l l i on d ol l ar s f r om M i cr o- Bl end, I nc. , und ert he d i s g u i s e th a t i t w a s b u i l d i n g s k i d s fo r M i c ro -B l e n d , I n c
. (R ec ord ci t ati on s om i t t ed ).

I n hi s br i efon cr oss- appea l , R oynot es t hat “ C ul v erI nt er est s w as th e assu m ed n am e of t hr ee 7 separ at e Cul v er - r el at ed e nt i t i es. ” T he f i r st ent i t ywas a sol e pr opr i et or shi p. T he se cond ent i t ywas a p a r tn e r s h ip b e tw e e n R o y a n d h is e x - w if e th a t e n d e d u p o n th e ird iv o r c e . T h e th ir d e n tit y w a s a p a r tn e r s h ip bet ween R oy and t wo ot her M i cr o- Bl end shar ehol der s. I t i s t he t hi r d ent i t y whi ch di ssol v ed a nd di st r i but ed i t s asset s t o M i cr o- Bl end i n 19 97.

R oyasser t s t hat t he e qui pm ent gi v en t o M i cr o- Bl end byC ul v erI nt er est s “ was wor t h $7 5, 000- 8 $8 0,00 0 .

. . . ” 4 actively pursue othe r comp anie s to ma nufactu re the skids. At a Bo ard m eet ing on Janu ary 13, 199 5, th e Boa rd aut horized a con tract w ith Culv er Inte rests to m anu factu re the skids. 6 Culv er Inte rests cont inue d to m anu factu re the systems u n t il Cu lv er Inte rests Num ber 3 dis sol v ed i n 1997. Atthatt ime, C ulv er Int erest s g av e i ts ass ets —th e eq uip ment and 7 mater ial s u sed in the p ro duct ion of the s ki ds—to M ic ro -B len d and M i c ro - B l end c ommenced product ion of the s ki ds on i ts ow n. 8 b. A na-Tech , I nc. Ana- Tech, Inc . ( “A na- T e ch ”) w as formed by R oy i n the 1980s to suppl y train ed tec hni ci ans sk il led i n c ali brati ng and re pai ri ng g aug es and mete ri ng dev ic es for refiner ies and chem ical plant s on a te mp orary basis. Roy and Doug each ow ned 50% of the sto ck
o f A n a -T e c h e ve n t h o u gh Ro y ra n t h e co m p a n y h im s e lf

. Va le ro Re f in e ry, Du p o n t , O xy, and C PPC w ere among Ana- Tech’ s p a st cus tomers. Es sent ial ly , An a- Tech was anAppel l ee s n ote t hat t he $ 28, 000 a y earsav i ngs t hat Ana- T ech a ff or ded M i cr o- Bl end r epr esent ed 9 a sav i ngs o f$14 0, 000 ov erf i v e y ear s, t he m i ni m um am ountoft i m e i t w oul d t ake f orM i cr o- Bl end’ s expe r i ence r at i ng t o m at ch Ana-T ec h’ s
. Roy f ur t hernot es t hat M i cr o- Bl end woul d no t hav e be en a bl e t o pr ocur e t he $45, 000 t o $5 0, 000 l i abi l i t ypr em i um s t hat Ana- T ech p r ocur ed b ecause of M i cr o- Bl end’ s st ar t
- up co m pany st at us. I n ad di t i on, R oycont ends t hat v ol um i nous pay r ol l r ecor ds wer e i nt r oduced att r i al whi ch est abl i shed th a t “ p e r s o n s w o r k in g f o rM ic r o - B le n d ’s b e n e f it— w h o w e r e f o r m a lly A n a - T e c h e m p lo ye e s — w e r e a ls o p a id byM i cr o- Bl end” and t hat t he co nt r act s b etwe en Ana- T ech a nd M i cr o- Bl end wer e l egi t i m at e bu si ness ar r angem ent s t hat const i t ut ed a r easona bl e bu si ness d eci si on b yM i cr o- Bl end’ s boa r d of di r ect or s. 5 “instrum ent ati o n l a bor po ol cont ractor.” In add ition, An a-T ech p rov ided workers compens ati on i nsurance on i ts employees, i ncl udi ng the tec hni ci ans its u p p li ed to
c u s t o me rs a n d i t s c l e r i c a l a n d a d mi n i s t ra t i v e s t a ff. c. The Rela tionship Betw een A na-Tech and Micro-Blend From the inc epti on of M ic ro -B le n d , An a- Tech s uppl ied al l employees to t he company
. In fact , R oy

co ntends that“ Gi bney hi msel f w as pai d by

Ana- T e ch in 1990 for
w or k p er fo rm e d for Mi cro- Bl end .

. . . ” Ana- Tech c onti nued t o s uppl y the lab or

forc e for Mi cro- Bl end’ s o perati ons unti l 2001. At thi s t ime, M ic ro -B len d’s Board dec ide d to pay i ts
ow n empl oy ees ra ther

than trans actthroug h Ana- Tech. Gi bney co ntends that“ Ana- Tech, Inc ., w as suppo sed to be do ing M ic ro -B len d Inc . [ si c] pay ro ll , howev er , t he s ecretar y of Mi cro- Bl end I nc. , Ter ri D oy el[ ,] did all the so cal led pay ro ll serv ic es” and that “[ a]ppel lee
Cul v er [R oy] took $4.93 mil li on dol lars from Mi cro- Bl end, Inc . t hroug h Ana- Tech, Inc . und er the d is g uis e tha t it w as prov idi ng pay ro ll se rv ic es. ” C onv ersel y , R oy arg ued t hat t he principa l reason th at Micro-Blend used Ana-T ech to provi de itsl abor fo rce w as “Ana -Te ch’s favorable w orkers’ co mp ensa tion experience rat ing.” Roy f urthe r argues tha t Ana -Te ch’s han dling of

Micro-Blen d’s labo r fo rce saved Micro-Blen d $2 8,0 00 a y ear in w o rke rs’
com pen sation insurance prem ium s. 9 II. P ROC EDURA L B A CKGRO UND Gibne y f iled his share hold er derivativ e and share hold er opp ression act ions againstT he r ecor d r ef l ect s t hat G i bneyj oi ned Ana- T ech i n hi s shar ehol derder i v at i v e act i on o n Apr i l 15, 10 2003, i n hi s secon d of sev en am ended pet i t i ons. I n hi s f our t h am ended pet i t i on, t he r el ev ant pet i t i on f ort he f i r st t r i al on t he m er i t s, G i bneysoug ht $40 , 000, 000 i n r el i ef , i ncl udi ng a t t or ney ’ s fe es an d exe m pl ar ydam ages, f orcl ai m s of

br each oft he d ut yof car e byR oy , t he u sur pat i on o fcor por at e op por t uni t i es, sel f
- deal i ng b yR oy t o de f r aud M i cr o- Bl end, gr oss ne gl i gence, m i sm anage m ent and m i sappr opr i at i on o fcor p o r a t e a sset s, b r each of t he du t y of l oy al t yt o M i c ro-B l en d an d i t s s ha reh ol de rs b yR oy , an d t ha t C ul ver I nteres t s an d A na -T ec h w ere
“ sham or gani z at i ons” used and cre at ed by R oyt o usur p M i cr o- Bl end’ s busi ness oppor t uni t i es and t o si phon i ncom e f r om M i cr o- Bl end.

T h e r e tr ia l a n d th e r e s u ltin g j u d g m e n t is th e s u b j e c t o fG ib n e y’s a p p e a l a n d a p p e lle e s ’ c r o s s - a p p e a l. 11 I n hi s sev ent h am ended pet i t i on, G i bneyasser t ed t hat ( 1) R oyused Ana- T ech t o si phon ov er$4. 93 12 m i l l i on f r om M i c ro-B l end f r om 199 4- 2000 undert he d i sgui se of “ pay r ol l ser v i ces, ” ( 2) R oy , t hr ough C ul v er I nt er est s, r ecei v ed o v er $2. 75 m i l l i on f r om M i cr o- Bl end f orski ds t hat wer e act ual l ym anuf act ur ed b yM i cr oB l e n d , (3 ) R o yb re a c h e d th e d u tyo f c a re i n th e m a n a g e m e n t o f M i c ro -B l e n d a n d b re a c h e d th e d u tyo f l o y a l ty t o M i cr o- Bl end and i t s shar ehol der s, ( 4) R oyf ai l ed a nd r ef used t o al l ow G i bneyand ot her s har ehol der s an oppor t uni t y t o i nspectt he b ooks and f i nanci al r ecor ds of M i cr o- Bl end despi t e vari ous r equest s, ( 5) R oy m i sm anage d an d m i sr epr esent ed t he a ff ai r s of M i cr o- Bl end byf ai l i ng t o di scl ose t he f i nanci al st at us an d accountfo ral l ofM i cr o- Bl end’ s i ncom e and expenses, (6 ) R oym i sappr opr i at ed bot h t he co r por at e asse t s and oppor t uni t i es of

M i cr o- Bl end, ( 7) R oyeng aged i n op pr essi v e con duct t owar ds m i nor i t y shar ehol der s, whi ch i n v o l v e d t h e s u p p r e s s i o n o fd i v i d e n d s , c h a n g i n g t h e c o r p o r a t i o n f o r m f r o m a n “ S ” c o r p o r a t i o n t o a “ C” c o r p o r a tio n , a n d th e s ip h o n in g o ffo fc o r p o r a te e a r n in g s th r o u g h e x c e s s iv e c o m p e n s a tio n to h im s e lfa n d h is f am i l y , ( 8) R oy engag ed i n off ensi v e an d ou t r ageou s cond uct t owar ds G i bneywhi ch cau sed G i bneyt o suff er m ent al ang ui sh, em ot i onal di st r ess, and t o l i v e i n con st ant f ear of hi s l i f e, ( 9) R oy ’ s act i ons wer e i nt ent i onal an d gr os sl y n eg l i ge ntwi t h r es pe ct t o t he r i gh t s of a pp el l an t , ( 10 ) Royf or m ed Cul v erI nt er es t s, a l on g wi t h J. K. R am seyand “ Lawr ence Lucas, ” t o de f r aud M i cr o- Bl end of atl east $2. 75 m i l l i on, and ( 11) R oyeng aged, aut hor i z ed, orr at i f i ed t he “ consi st ent dest r uct i on o fdocu m ent s by and t hr ough T er r i D oy el

. . . t o hi de a nd secr et e hi s unl awf ul act s. ” G i bney cont i nued t o al l ege t hat he and t he o t herm i nor i t yshar ehol der s suff er ed dam ages i n t he m axi m um sum of $40 , 000, 000. 6 Roy, Culv er Inte rests, an d Micro-Blend on Novembe r 27 , 200 0. Gibne y joined Ana-T ech on Apr il 15, 2003. The c ase w as firs t t ri ed to v erdict i n 2004, w it h the j ur y co ncl udi ng that 10 Gi bney and the o ther

min or ity sh arehol ders were ent it le d t o $ 1 2 ,000, 000 i n actual and
ex emplar

y damag es and $4, 000,000 i n att or ney ’s fees. H ow ev er , i n respon se to appel lee s’ moti on to di sreg ard the jur y ’s findi ng s and for a jud g ment non obs tante v erdicto, the t ri al jud g e ordered a new tr ial on J une 16, 2004. 11 T he ca se w as re-tried to a jury on th e cau ses of action c o n t a ined in Gibney’s
sev enth amended pe ti ti on, w hic h was filed on J une 23, 2005. On Jul y 6, 20 05, a ppel lee s 12 filed thei r thi rd amended answer and ass erted a count ercl aim ag ain st Gi bney, cla imi ng Gibne y ’s deriv ative claims “w ere no t preced ed b y reason able inquiry , w ere an d arePar agr aph t hi r t een ofG i bney ’ s sev ent h am ended pet i t i on p r ov i des: 13 13

. M i c ro-B l en d,I nc
. w as i n t he bu s i ne s s of bu i l di ng sk i ds

. O n o r abo ut 19 94 , R oy C ul ver, Jr

. , f or m ed C ul v er[ I ] nt er est s and m i sr epr esent ed t hat i t was bu i l di ng ski ds f orM i cr o- Bl end, I nc. However , t he sk i ds wer e bei ng bui l t by M i cr o- Bl end, I nc. Fr om 199 4 t hr ough 1997, R oy C ul v er , Jr

. , t hr ough C ul v erI nt er est s, r ecei v ed o v er$2. 75 m i l l i on f r om M i cr o- Bl end, I nc. f or sk i ds t hat wer e act ual l ybui l t byM i cr o- Bl end, I nc. Pl ai nt i ff s wi l l fu rt her show t hat C ul v er I nt e r e s t s i s a s h a m o r g a n i z a t i o n , a n d t h a t Ro yCu l v e r , J r
. u s e d h i s p o s i t i o n a s t h e Ch i ef Execut i v e O ff i cerand M aj or i t yS har ehol dert o per pet uat e such a f r aud on M i cr o- Bl end, I nc. 7 g ro und l e s s a n d b ro u g h t i n b a d fa i t h ; o r g ro u n d l e s s a n d b ro u g h t fo r t h e p u r p o s e of hara ssme nt; o r g roun dless an d interp osed for an imp rope r purpose ” to cause unn ecessa ry del ay or needl ess i ncrease in the c ostof li ti g ati on. In t his fil ing , app ell ees als o as ser ted a my ri ad of aff ir mati v e defenses , i ncl udi ng a s tatut e of li mita ti ons defense. After Gi bney

rest ed hi s c ase- in- chi ef, the t ri al jud g e g ra nted appel lee s’ moti on for a pa rtial dire c t e d ve rd ict on Gibn ey’s f raud claims con taine d in para graph thirteen of his seventh a me nde d pet ition on statu te of lim itation s groun ds. Once app ellees reste d the ir 13
cas e- in- c h i e f, t h e t r i a l j u d g e d i re ct e d a v e rd i cto n G i b n e y ’ s re ma i n i n g s h a re h o l d er der iv ati v e c lai ms, sta ti ng thatGi bney had not prod uced any

ev ide nce as to damag es. The
cas e w ent t o the jur

y bas ed s ole ly

on G ibn ey ’s sh arehol der oppress ion ca use of acti on. The tr ial co urt s ubmitted fiv e q uest ion s t o the j ur y reg ardin g Gi bney ’s sh arehol der oppres s i o n c a u s e o f a ct i o n
. T h o s e q u e s t i o n s , a n d t h e j u r y ’ s a n s w e rs t h e re t o , w e re as follows: Ques ti on N o. 1. Do y ou f ind f rom a prepo nde ra n c e o f t he e v iden ce tha t RoyCulv er, Jr ., si nce Nov ember

27, 1998, malic io u sly or w ro ng fully

refused to al low Mi chael Gi bney

to ex amine the b ooks and re cords of Mi cro- Bl end, Inc .? Answer : Y es or

N o: NO Ques ti on N o. 2.8 Do y ou fi nd from a p rep on de ran c e of t he e v i de nc e th atR oy Culv er, Jr ., si nce Nov ember

27, 1998, mali ci ousl y or w ro ng fully used his pos it ion as the C hie f Ex ecut iv e Officer of Mi cro- Bl end, Inc ., to award ex ces si v e s ala ri es a n d co m p e n s a t io n t o h im s e lf t o t h e d e t ri m e n to f

Mi c h a e l G ib n e y? Answer : Y es or

N o: Y ES Ques ti on N o. 3. D o y ou fi nd from a prep on de ran c e of th e ev i de nc e th at R oyCulv er, Jr ., si nce Nov ember

27, 1998, mali ci ousl y

or w ro ng fully

us ed hi s p osi ti on as the C hie f Execut iv e Officer of Mi cro- Bl end, Inc ., to award ex ces si v e s ala ri es and c ompens a tion to members o f his famil y to the d etr imentof Mi chael G ib n e y? Answer : Y es or

N o: Y ES Ques ti on N o. 4. Do y ou f ind f rom a prepo nde rance of the e vid e n c e tha t RoyCulv er, Jr ., used his posi ti on as the Chi ef E x ecut iv e Off ic er of M ic ro -B len d, Inc ., to mali ci ousl y

or w ro ng fully

di re ct the w it hhol din g of pay ment of di v ide nds from Mi cro- Bl end, Inc ., to M ic hael Gi bney i n 1998, 1999, and 2000? Answer : Y es or

N o: NO If y ou hav e ans w ered any one of the precedi ng q uest ion s “ Y ES,” ans w er the next que sti on. If y ou hav e ans w ered eac h of the precedi ng q uest ion s “ NO ,” do notans w er

the next q uest ion

. Ques ti on N o. 5. W hat i s t he v alu e of M ic hael Gi bney ’s sh ares in Mi cro- Bl end, Inc .? A n s we r i n d o ll a rs a n d ce n t s , if a n y. Answer : $4,000, 000 As ev ide nced abov e, the jur y re tur ned a v erdict that w as par ti all y fa vora b le to Gi bney

. On A ug ust4, 2005, Roy fil ed a moti on to se t as ide t h e jur y ’s findi ng s t o the
sec ond and third ques ti ons cont ain ed i n the j ur y ch arg e. Fur

ther more, on A ug ust29, 2005, Roy, Ana -Te ch, an d Culv er Inte rests f iled a m otion for judgme nt w it h t he trial cou rtT he t r i al cour t ’ s Febr uar y2, 2006 j udgm ent awar ded G i bneypost
-j udgm ent i nt er est at t he r at e of 14 7 % p e ra n n u m a n d c o s ts o f c o u r t. T h e tr ia l c o u r t a ls o c o n c lu d e d th a t a p p e lle e s s h o u ld ta k e n o th in g f r o m th e ir c ou ntercl ai m
. M ore ove r, t he t ri al co urt ex pl i c i t l yde ni ed G i bn ey prejud gm en t i nteres t i n t hi s orde r.

R oynot es on app eal t hat “ [ b] ecause oft he o r deri n whi ch t he n ot i c es o f a pp ea l w er e do ck et ed, 15 G i b n e y i s a p p e l l a n t a n d R o y a n d th e e n ti ty d e fe n d a n ts a re a p p e l l e e s
. T h i s l a te r c ro s s -a p p e a l p ro p e rlyre fle c ts o n l y R o y a s th e c ro s s -a p p e l l a n t a n d G i b n e ya s c ro s s -a p p e l l e e .” 9 ass erti ng that Gi bney

w as enti tl ed to a t ake nothi ng j udg ment as a matter of law on a ll of his cl aims

. On D ecember 9, 2005, the t ri al cour t den ied R oy ’s m o ti o n to setas ide the jury ’s fin dings. In its judgme nt signed on Februa ry 2, 200 6, th e trial court he ld t h at th e jury ’s findi n gs cons ti tuted a find ing thatR oy had oppress ed Gi bney , a sharehol der i n M ic ro B le n d

. Su b s e qu e n t ly, t h e t ri a l c o u rta wa rd e d G ib n e y $ 2 5 0 , 0 0 0 in d a m a ge s a ga in s tRo y. 14 On M arch 6, 2006, Gi bney filed a noti ce of ap peal , and Roy fil ed a moti on for new trial. Th e tr i al c ou rt di d no t r ul e on R oy ’ s mo ti on for n ew t r i al , an d i t w as s ub sequen tly
ov er ru led by

operati on of l aw
. SeeT EX
. R. A PP
. P. 33.1( b) ; see als o T EX
. R. C IV
. P. 329b( c)

. Roy

then fil ed not ic e of hi s c ro ss -a ppeal on M ay 1, 2006. 15 III . S TA NDA RD OF R EVI EW A l eg al suffici ency

ch all eng e may

onl y be s ust ain ed w hen: (1 ) the record di sc los es a c omplet e abs ence of ev ide nce of a v it al fact; (2)the cour t is bar re d byr ule s o f law or of
ev ide nce from g iv ing w eig ht to t h e only ev ide nce offered to prov e a v it al fact; ( 3) the evidence o f

fered to prove a v ital fact is n o mo re t han a m ere scintilla; or (4 ) th e evidence est abl is hes conc lus iv ely the oppos it e of

a v it al fact. Uni

royal Good rich Ti reC o. v . M ar ti nez , 977 S. W .2d 3 28, 3 34 ( Tex . 199 8)

. The ev ide nce is no more than a sci nti ll a and, i n l eg al effect , i s n o ev ide nce “w hen t he ev ide nce offered to prov e a v it al fact i s s o w eak as to do
no more tha n c re ate a mere s ur mis e or su spi ci on of i ts ex is tenc e.” Ki ndr ed v. Con

/Chem .,10

Inc. , 650 S.W .2d 6 1, 63 ( Tex . 198 3)

. Con v ersel y , more tha n a s ci nti ll a ex ists wh e n the evidence “rises to a level that w ould ena ble reaso nab le and fair-mind ed p eop le to dif fer in th ei r c on c l usions.” Tra n sp. Ins . C o. v . Mor iel , 879 S.W .2d 1 0, 25 ( Tex . 199 4)

. In d e t e rm in in g wh e t h e r t h e re i s l e ga ll y s u f f ic ie n te vid e n c e t o su p p o rtt h e f in d in g u n d e r re vie w,
w e mustco nsi der

evid e n ce f av orabl e to the fin din g i f a re asona ble factfinder co uld , and dis re g ard ev ide nce cont ra ry to the fin din g unl ess a reason abl e factfinde r coul d not

. Cit y of K eller v. Wils on , 168 S.W .3d 802 , 827 (Tex. 2005 ). IV. A N AL Y S IS A . G ib ney ’s D erivat ive C laim s 1. Gibne y ’s Fraud Claim s Against Roy and Culver Intere sts In hi s first is sue on appe al, Gi bney as ser ts that the tr ial co urt’ s d irect ed v erdict as to his cl aims ag ain st Cul v er Int erest s a nd R oy

w as improper

bec ause the l eg al doct ri nes of f ra udul ent c oncea lment , c onti nui ng tor t, and t he di sc ov er

y r ule sa v e hi s caus es of acti on from appel lee s’ aff ir mati v e defense of sta tute of li mita ti ons. I n s uppor t of hi s c ontent ion , Gibne y note d tha t the ev iden ce a tt ri a l prov ed th at Roy, through Culv er Inte rests, fraudul entl y

took $2.7 5 mi ll ion from M ic ro -B len d i n 1996 and 1997, an d tha t hi s c ause of act ion for fraud w as ti mely filed

. In addi ti on, G ibn ey note s t hat ( 1) he d id not d is cov er the
ex is tenc e of a prev iou sl y unk now n “ Cul v er

Int erest s ‘ number

2' ” unti l after the l awsui t was filed , ( 2) the ev ide nce demonst ra ted t hat a p p e llees eng ag ed i n fraudu len t c oncea lment , w hic h w o u l d c o u n t e r a p p e l l e e s ’ a ffi r ma t i v e d e fe n s e o f s t a t u t e o f l i mi t a t i o n s , a nd ( 3) appel lee s fai led to put o n ev ide nce to s uppor t t hei r sta tute of li mita ti ons cl aim. A p p e l l e e s c o u n t e re d b y a rg u i n g t h a t ( 1 ) G i b n e y fa i l e d t o ra i s e a fa cti ss ue th at Cul v er Int erest s was a s h a m org ani z ati on, ( 2) Gi bney fail ed to es tabl is h the es sent ial11

ele ments of his ca uses of act ion fo r fraud a nd breach of f idu ci ar y duty , and ( 3) the facts adduc ed attr ial es tabl is hed t hat G ibn ey ’s fra u d c a use of acti on ac cr ued more tha n four y ears b efore G ibn ey

fil ed s uit

. a. A pp licab le L aw A c ause o f acti on for inj ur y to the p ro per

ty of a c or porati on or

for i mpair ment or dest ru cti on of i ts busi ness i s v est ed i n the co rp orati on, a s d is ti ng uis hed from it s sharehol ders. Red

m on v . G ri ffith , 202 S.W .3d 2 25, 2 36 (T e x. Ap p .–T y ler 2006, pet. deni ed) ( ci ti ng Davis v. Sheerin , 754 S.W .2d 3 75, 3 81 ( Tex . App.–H oust on [1st Di st. ] 198 8,
w ri t den ied )) ; see Murphy v. Campbe ll , 96 4 S. W .2 d 26 5, 2 68 ( Tex

. 199 7); Hajdik v. W ing ate , 753 S.W .2 d 1 99, 2 01 ( Tex . Ap p.–H oust on [1 st Di st. ] 198 8) , a f f ’d , 795 S.W .2d 717 (Tex. 1990 ). To recover fo r w rong s don e to th e corpo ration , the shareh olde r must br ing the sui t deri v ati v ely in the name of the cor porati on so that each s harehol der w il l be made w hol e if the cor porati on obtai ns compens ati on from the w ro ng doer

. Red m on , 202 S.W .3d at 2 3 6 -3 7 (cit in g Faour v. Faour , 789 S.W .2d 6 20, 6 21- 22 ( Tex . Ap p.–Tex ar kana 1990, w ri t den ied ))

. Stat ute o f li mita ti ons is an a f f irm a ti v e defense. T EX
. R. C IV
. P. 94. A defendant bears t he i nit ial burden t o pl ead, p ro ve, a n d s ecure findi ng s t o s ust ain i ts ple a of li mita ti ons. See W

oods v. W

illiamM. Mercer, Inc. , 769 S. W .2d 5 15, 5 17 ( Tex . 198 8) ; see also Twist v. Garcia , No

. 1 3 -0 5 -0 0 3 2 1 -C V , 2 0 0 7 T e x. A p p
. L E XI S 7 1 8 7 , a t*8 (T e x. App.–C or pus C h ris ti A ug . 30. 2007, no p et.)( mem. op.)

. Fraud c lai ms hav e a four y ear sta tute of li mita ti ons per iod from t he day the caus e of acti on acc ru es. T EX
. C IV
. P R AC
. & R EM
. C ODE
. A NN
. § 16.004( a) (4 ) ( Ver non 2002). Generall y , the accr ual date of a c ause of act ion i s a q uest ion of law

. See Moreno v. Ste rling Drug, Inc. , 7 8 7 S

. W

. 2 d 3 4 8 , 3 5 1 (T e x.12

1990) ( the q uest ion of

w hen a caus e of

acti on accr ues is a jud ic ial one unle ss defined by the l eg is lat ure)

. The acc ru al date is w hen t he pl ain ti ff kn ew or sh oul d have k now n of the
w ro ng fully

ca used inj ur

y . See K

PM G Pe at M

ar wick v . Har ri son County

Hous. Fi n. C or p. , 9 8 8 S

. W

. 2 d 7 4 6 , 7 4 9 ( Te x . 1 9 9 9 ); se e al so Ear le v. Rat li ff , 9 9 8 S

. W

. 2 d 8 8 2 , 8 8 8 (T e x. 1999)

. b. Discus sion On ap peal , G ib n e y c ontends thatappel lee s fai led to presentev ide nce to t he tr ial
cour t i n s uppor

t of thei r sta tute of l imi tati ons defense. Appel lee s direct thi s Cou rt to t hree ex hib i t s i n t ro d u c e d i n t o e v i d e n c e t h a ts e r v e a s a d e q u a t e s u p p o rtfo r t h e i r s t a t u t e of li mita ti ons defense as to Cul v er Int erest s. T he f irst exhibit referen ced b y app ellees, marke d Defend ant ’s Ex hibit 45 , is an interoff ic e memorandum from R oy to Gi bney

and Mik e L u ca s d a ted May 25, 1990. In the memorand um, R oy

referenc es personal ex pense acc ounts for th re e empl oy ees, i ncl udi ng $ 5 ,1 03.94 pai d to Gi bney , and sa lar ies pay abl e to a g ro up of empl oy ees, i ncl udi ng $7,437. 36 payabl e to Gi bney for 2 50.5 hours wor ked. Ap pel lee s’ second ex hib it , mar ked Defend ant ’s Ex hibit 72, is a me mo rializ ation of the Micro-Blend Board mee ting on August 29, 1 994. The foll ow ing lan g uag e, in thi s d ocument , mak es cl ear thatGi bney

par ti ci pated in the B oard meeti ng : “A ll members were present ex ceptT ro y K e m p
. . . . 4. M oti on by Gi b n e y a n d C o lli n s, s e co n d e d , t h a t CE O p ro vide f in a n cia l su p p o rt , li m it e d m a n u fa ct u rin g, and stand ard drawing s to advance faste r de liv eryo f e quipme nt.” Finally , app ellees’ th ird exhibit, ma rked Defend ant ’s Ex hibit 74 , i s a m em orializ ation of the Micro-Blend Board
me eting on Jan uary 13 , 199 5. I n this docu me nt, Micro-Blend’s Boa rd agreed to co ntract
w it h C ulv er

Int erest s for

the cons tr uct ion and manufacture of fiv e s ki ds, three for pendi ng13

sy stem s sold and tw o for ant icipate d sales, at a cost of 12% over actua l cost. Th e record
re flect s t hat these documents w ere contai ned w it hin the busi ness records of Mi cro- Bl end. Gi bney co ntends thatM ic ro -B len d ent ered i nto a co ntrac t w it h C ulv er Int erest s t o ma nufactu re skids and that Micro-Blend emplo y ees actua lly man ufactu red the skids w hile Cul v er Int erest s p ock eted the money made fro m the manufactur ing wor k. As su ch, Gi bney cont ends that Roy , s peci fical ly , per petuat ed a fraud on M ic ro -B len d w it h thi s a rrang ement. Base d on the ev ide nce adduc ed at tr ial , the date of t he Board’s deci si on to enter i nto t he manufactur ing co ntractw it h C ulv er Int erest s—Janua ry

13, 1995—g ov er ns our sta tute of li mita ti ons anal y si s b ecaus e i t i s t he dat e in w hic h the alleg ed f ra ud bega n; the day w hen the i nterest s o f Mi cro- Bl end’ s B oard members a ll eg edl y beg an to r un c ounter to the int erest s o f Gibne y

and the o ther

min or ity sh arehol ders o f Mi cro- Bl end. The st atute of li mita ti ons per iod for fraud i s four ye ars f ro m the acc ru al date. T EX
. C IV
. P R AC
. & R EM
. C ODE
. A NN
. § 16 .00 4(a)(4). Th e record ref lects tha t Gibne y f iled his origi nal pe tition a lle ging f raud , am ong oth er claims, on Nov em ber 27 , 200 0. T he reco rd further reflect s t hat appel lee s, in thei r sec ond amende d ans w er fil ed on Febr uar

y 10, 2005, plea ded thatGibne y ’s causes of action for f raud were b arred by the statu te of limitation s. T here fore, ba sed o n the ev iden ce prese nte d at trial, Gibn ey nee ded to have f iled his
or ig ina l peti ti on by

Ja nuar y 13, 1999, in or d e r to c omply w it h the appl ic abl e s tatut es of li mita ti on. Beca use Gi bney di d notfil e hi s o ri g ina l peti ti on by Ja nuar y 13, 1999, iti s c lea r to t his C our

t t hat G ibn ey ’s fraud cl aims ag ain st Roy and Cul v er

Int erest s were bar re d by statu te of

limitation s. Gi bney , howev er , arg ues that the s tatut e of li mita ti ons on hi s fraud c ause of acti on ag a in st Ro y

and Cul v er

Int erest s was “d eferred,” i .e., tol led by the leg al doct ri nes ofG i bney al so di r ect ed t hi s C our t t o Pl ai nt i ff ’ s Exhi bi t 32, whi ch i s a v ol um i nous exhi bi t t hat cont ai ns 16 t he b y l aws ofM i cr o- Bl end and num er ous co pi es of R oy ’ s ban k st at em ent s f r om t he Fi r st N at i onal Bank of I ngl esi de. T he b ank st at em ent s ar e or gani z ed chr onol ogi cal l yfr om A ugust1996 t o M ar ch 20 02, butG i bney fa i l e d to e x p l a i n w h a t th i s C o u rt i s to g l e a n fro m th i s c o m p i l a ti o n o f p a p e rw o rk

. See T EX
. R. A PP
. P. 38

. 1(h ). 14 f raud ulen t conce alm ent , cont inuing tort, an d the d is c o ve ry rule. In supp ort of

his cont ent ion, Gib ney referen ces the followi ng lan guage in h is se v ent h am end ed pet ition: “All Pl ain ti ff ’s cl aims are c onti nui ng and ong oin g and Pl ain ti f fs a ss erts [si c] fraudul ent
conce a lm e nt an d discovery rule to any Defend ant ’s claim of limitation s.” On app eal,

16 Gibne y simply state s thathis causes o f action for f raud and breach of f iduciary duty “w ere cl ear ly ti mely fil ed” and that the t ri al te sti mony of Doyel re g ardin g appel lee s’ doc ument dest ru cti on pol ic ies es tabl is h hi s c lai m for frau dul ent c oncea lment . Gi b n e y has not prov ide d thi s C our

t w it h a c lea r and conc is e arg ument l ink ing the ev ide nce adduc ed attr ial to his con ten tion th at th e stat ute s of limitation are tolled in accorda nce w ith the discovery
ru le or the cont inu ing tor

t doctr ine

. See T EX
. R. A PP
. P. 38.1( h)

. W e the re fore c oncl ude that Gi bney

has i nadeq uatel y

br iefed these theor ies ; thus, thes e the or ies are waiv ed. See id. Gi bney

has , howev er , prov ide d arg ument an d aut hor ity as to his fraudul ent
conc eal ment c ontent ion

. In s uppor t of hi s c ontent ion thatan a cc ru al date can be defer re d by f ra udul ent conc eal ment, Gibney cite s to the T ex as Supreme Cour t’ s holdi ng i n S.V. v. R. V. , 933 S. W .2d 1 , 4 (Tex . 1996). Gibne y has al so prov ide d thi s C our t w it h c it ati ons to the t ri al tes ti mony

of Doyel chroni cl ing the documentretent ion pol ic ies of Mi cro- Bl end. In S.V. , the suprem e cou rt note d tha t the a ccrual of a ca use of

a ction is deferred in two ty pes of case s: ( 1) i n tho se involv ing alle gat io n o f f ra ud or fraudul ent c oncea lment , acc ru al is defer re d because a person canno t be per mitt ed to av oid l iab il ity for h is acti ons by dece itf ully

conce aling w rongd o in g unt il l imita tions h as run; a nd (2) in tho se case s in15

w hich the discovery rule app lies, “the nature of the injury occu rr e d is in here ntly und iscoverable and the evidence of injury is objectively

v erif iable. ” S.V. , 933 S.W .2d a t 6. “Th e f raud ulen t co n c e a lm e n td o ct ri n e , u n li k e t h e d is c overy rule, resem bles equita ble esto ppe l.” Mitch ell

Ener gy Cor p. v. B ar tlett , 958 S.W .2d 4 30, 4 39 ( Tex . Ap p.–F ort W orth 199 7, pet

. den ied) (f raud ulen t conce alm entis base d on the d octrine o f e quitable e stop pel; the d oct ri ne to ll s o r sus pends the ru n n in g o f l im it ati ons after ithas beg un bec ause the defendant has co nceal ed facts nec ess ar y for t he pl ain ti ff

to know that he had a caus e of action ). M oreo v er, the plaintif f asserting f raud ulen t conce alm entmusthave reason ably
re li e d o n t h e d e fe n d a n t ’s li e s o r i m p ro p e r s il e n c e ; o n c e a p la in t if f kn o ws o r

s h o u ld h a ve know n of the decei t, re li ance is no l o n gerr e a so n a b le, and the t oll effectends

. Id. I n
ess ence, Gi bney

i s req uired to sh ow : (1 ) the e x is tenc e of the under ly ing “ tor t” ; ( 2) the defendant’ s k now led g e of the tor t; (3 ) the d efendant’ s u se of decept ion to conc eal the tor t; and ( 4) the pla int iff’s reason abl e reli ance on th e dec epti on. Id. ; see als o Cass v. Stephens , 156 S. W .3d 3 8, 64 ( Tex . Ap p.–El Pas o 2004, p e t. d e n ied ) (h old ing thatfraudul ent
conce alm entapp lies to any cause of action ). Doyel’ s t est imony

reflect s t hat s he bec ame the sec re tar y and cus todi an of records for M ic ro -B len d i n 1995, the c ust odi an of records for Ana -Tec h i n 2001, and the c ust odi an o f rec o rd s fo r Cu lver

In te re st s in 20 0 2 . Do yel a lso no te d th e fo llo wing:
Q: Is there a way

w here you kept li ke a time l og abouthow many hours t hat y ou s pent w or ki ng for M ic ro -B len d, A na- Tech, Cul v er Int erest s and R oy Culv er? A: I ke pt a ti me she et bu t I nev er wor ked for R oy

C ulv er —of hours t hat I wo rk e d o n t h in gs fo r t h e d if fe re n tco m p a n ie s d u ri n g t h e d a y.16 . . . . Q: Okay. N ow, the time sh eetthatw e are ta lk in g a b o ut, a re they still in ex is tenc e or

hav e the y

been dest ro y ed? A : W e h a ve a re t e n t io n p o li cy— THE C OU RT: Jus t ans w er the q uest ion

.

. . . . Q: Are al l thos e ti me she ets av ail abl e? A: N o, s ir ; t hey ’re not

. Q: W ho d es troy ed t he m? A: I be liev e I did in the course of busine ss.

. . . . Q: How many of thos e [s ource document s] hav e you des troy ed? A: Just invoicing. T ime shee ts w ere de stroyed as time w enton. I have old det ail trial bala nces, accou nts receivable, a ccoun ts payable reco rds, payroll journa ls. Q: How a b o u t back up records [to y our ac count ing and re cordin g procedu re s]? D id y ou des troy thos e too ? A: As years went o n.

. . . . Q: Can y ou te ll us w hethe r you are abl e to deter mine, for e x ample, the nu mb er o f ho urs t ha t a ty pi c al e mp l oy ee h as wor k ed o v er a p er i od o f t i me w it hout a s ource document ? A: Not right now , no, sir.

. . . . Q: Did Roy

Culv er know abo ut your destructio n of docu me nts? A: W e’v e nev er

di sc uss ed i t, but, y es, I’ m sure he saw me s hreddi ng docu me nts.G i bneyt est i f i ed a t t ri al tha t w he n he l eft M i cr o- Bl end, atsom et i m e i n 19 95, he k new “ t her e was 17 som et hi ng wr ong” beca use “ [ o] ursal es ha d sky r ocket ed a nd w he n I l eft , I knew we shoul d be get t i ng a di v i dend. I m ean, bi g di v i dends. ” I n r egar d t o G i bney ’ s per sonal knowl edge ofwhat was wr ong, G i bney t est i f i ed t hat he had suspi ci ons t hat som et hi ng was wr ong and t hat M i k e Lucas had t ol d hi m som et hi ng, but t hat i t di dn’ t m ake sense t o hi m
. G i bneyfu r t hernot ed “ [ i ] t shocked m e t o t hi nk t hat I am m aki ng $ 50, 000 and 17 . . . . Q: And t he des tr uct ion of document s we’re tal ki ng aboutst arted i n 1989? Di d i t s tar

t i n 1989? A: For Ana -Te ch Com pan y , y es, sir. Q: And for

M ic ro -B len d Inc or porated, w hen di d des tr uct ion of the d ocument s sta rt ? A: It’ s a general course of busi ness , so it woul d be done ev er y y ear onc e a y ear for previ ous years back.

. . . . Q: W hat year

di d you s tar

t des troy ing doc uments for M ic ro -B len d Inc or porated? A: I don’ t bel iev e anythi ng w as dest ro y ed unt il probabl y 1995 or ‘ 96. Des pit e D oy el’ s t est imony aboutM ic ro -B len d’s document re tenti on pol ic ies , G ibn ey has n ot est ablishe d the required elem ent s for f raud ulen t conce alm ent , as intim ate d in Mi tch ell Ener gy Cor p. and Cass

. See M

itchel l Ener gy Cor p. , 958 S.W .2d a t 439 ; see a lso Cass , 156 S.W .3d a t 64. G ibn ey has fail ed to i dentify t he nat ure of the document s t hat
w ere allegedly destroyed, ho w the alleged destruct ion of said docu me nts preju diced his
caus es of acti on, a nd th at appel lee s dest ro y ed sai d document s in an effort to c oncea l them f rom Gib ney. Furth ermo re, Doyel’s testim ony estab lishes tha t Micro-Blen d de stroyed such f iles on a sp e c if ie d d ate w ithin th e ordina ry course of

busine ss. Considering his serv ice on th e Board and as a Vice- Presi dent of Mi cro- Bl end, Gi bney sh oul d hav e k now n of M ic ro Bl end’ s d ocumentretent ion pol icy . G iv en th at G ibn ey ac know led g ed th at “ there was 17th e re ’ s a s e c re ta ry m a k i n g [$ ]8 0 ,0 0 0 o r 7 0 o r w h a te v e r, 7 5 o r 7 8 .” 18 some t h i n g w ro n g ” w h e n h e l e ft M i c ro - B l e n d i n 1 9 9 5 , t h i s C o u rt i s n o t p e rs u a d e d by Gibne y ’s conte ntion thatbeca use o f his alleged atte nua ted inv olvemen t w ith Micro-Blend’s day -t o- day

acti v it ies , he w as sur pr is ed to find o ut ab out t hese pract ic es. In ad dit ion , t he record reflects thatGibney submitt ed to the tr ial co urt an ins tr uct ion
on s pol iat ion of ev ide nce to be inc lud ed in the j ur y ch arg e, w hic h the tr ial co urt refused to subm it to the jury . “[W ]he n a party imprope rly destroys ev iden ce, trial courts m ay subm it a spo lia tion p resum ption instruction .” See T re vi no v . O rtega , 969 S.W .2d 9 50, 9 60 n. 4 (Te x . 199 8) (Baker, J., con curring)(noting thatthe d e c is io n t o issue this instructio n is a legal dete rmina tion th at occu rs after the tr ial co urt c oncl udes “t hat t here was a duty to preser v e ev ide nce, the spol iat ing par ty breache d tha t duty , and the dest ru cti on preju dic ed th e no n sp o lia ti n g pa rty”) (cit in g Wats onv . Br azos E lec
. Po wer

C oop. , Inc. , 9 18 S. W .2d 639, 643 ( Tex . Ap p.–W aco 1996, pet. deni ed) ) (e mphasi s added)

. In de cl ini ng to inc lud e a s pol iat ion presu mpti on inst ru cti on, t he tr ial co urt i mpli ci tl y co ncl uded t hat G ibn ey had not est abl is hed t he nec ess ar y prereq uis it es o u tl ined i n Tr evi no
. See i

d. Gibne y

himse lf tes ti fied th at he w as abl e to re v iew bank st atements , t ax

retur ns, ch e cks, and ot her
re lev ant M ic ro -B len d doc uments at v ar iou s p oin ts in time, w hic h undermi nes his fraudul ent
conc eal ment c ontent ion

. W e therefore concl ude that Gibn ey has fail ed to es tabl is h tha t appel lee s d est ro yed ev ide nce to co n ce a l in fo rm a ti o n f ro m Gib n e y tha t u lt im a te ly prej udi ced his ca se. Be caus e Gi bney has faile d to es tabl is h hi s fraudul ent c oncea lment , c onti nui ng tor t, or dis cov er

y ru le cont enti ons and becau se he did not file his or ig ina l peti ti on w it hin the four-year statute of

limitation s period, t he trial co urt did no t err in concludin g tha t Gibne y ’s f raud claims against Roy and Culver Inte rests w ere time barred. Accordingly , w e overruleT h e re c o rd re fle c ts th a t a p p e l l e e s m o v e d fo r a n i n s tru c te d ve rd i c t o n l i m i ta ti o n s g r o u n d s a s to 18 pa rag rap hs t hi rt ee n an d fou rt ee n [ c l ai m s ag ai ns t A na -T ec h] of G i bn ey ’ s se ven t h a m en de d p eti t i on
. H ow eve r, t he t r i al cour t speci f i cal l ynot ed t hat : “ T her ef or e, I ’ m goi ng t o f i nd t hat und erpar agr aph 13 o fy ourpet i t i on, t hi s cont r act of

M i cr o- Bl end i s bar r ed b y t he st at ut e of l i m i t at i ons. ” T he t r i al cour t di d not f i nd t hat par agr aph f our t een ofG i bney ’ s sev ent h am ended pet i t i on was bar r ed b yt he st at ut e of l i m i t at i ons. 19 Gi bney ’s first is sue. 2. Remai ni ng D erivat ive C laim s Agai nstR oy an d A na-Tech In his secon d issue on a ppe al, Gibn ey argues tha t the statu te of limitation s shou ld not h av e bar re d hi s c lai m thatR oy “ fraudul entl y

took ” $ 4 .9 3 mi ll ion dol lars from M ic ro Blen d an d gav e it to Ana -Te ch “und er the d isguise of p ayroll se rv ices.” Gibne y d oes a dm it that “[t]he onl y

pote nti al li mita ti ons is sue is for t he per iod 1994 throug h Apr il 15, 1999.” Howev er , G ibn ey

al so arg ues that appel lee s did not put on any ev ide nce of thei r li mita ti ons defense and thathi s c lai ms are deferre d b y the di sc ov er y r ule , frau dul ent c oncea lment , and t he c o n tinuous tor t doctr ine s. Onc e ag ain , app ell ees count ered by arg uin g that( 1) Gi bney fail ed to rais e a facti ss ue th at A na- Tech was a s ham org ani z ati on, ( 2) Gi bney fa ile d to est abl is h the es sent ial el ements of his ca uses of act ion for fraud and breach of fid u ciar y duty , s peci fical ly

damag es, and (3 ) the fact s a dduce d at tr ial es tabl is hed t hat Gibne y ’s frau d an d brea ch of f iduciary du ty cause s o f a ction accrue d mo re t han four years before G ibn ey

fil ed s uit

. How ever, Gibney

h asmi s c ha racte r iz ed th e trial court’s directed v erdicts. T he reco rd
re flects th a t t he tr ial co urt di re cte d a v erdict asto Gi bney ’s remaini ng der iv ati v e c lai m of brea ch of

f iduciary duty against Roy and Ana -Te ch on no-e v iden ce groun ds w ith respe ct to da mag es. Be caus e Gi bney has fail ed to proper ly

address the tr ial co urt’s d irect ed 18
ve rd ic twit h re s p e ctt o t h e re m a in in g d e ri va t ive cl a im s a ga in s tR o ya n d A n a -T e c h , we conc lud e that Gibney

has inadeq uatel y

bri efed thi s i ss ue. SeeT EX
. R. A PP
. P. 38.1( h)

. In20

any ev ent, w e w il l anal yz e the se cl aims w it hin the cont ext of a l eg al suffici ency rev iew

. a. A pp licab le L aw To est abl is h c ommon l aw fraud, a pl ain ti ff

mustprov e: “( 1) a mat er ial
re present ation wa s made ; ( 2) the re present ati on was false; ( 3) w hen t he represent ati on
w as made, the speake r knew it w as false or made it rec kl ess ly w it hout any

know led g e of the t ru st and as a po si ti v e as ser ti on; ( 4) the re p re se n ta ti on was made w it h the i ntent ion that itbe a cte d upon by the other

par ty ; ( 5) the par

ty a ct e d i n reli ance upon t he
re p re s e n t a t i o n ; a n d ( 6 ) t h e p a rty s u ffered i nju ry .” Johnso n & Higgins of Tex., Inc. v. Ken necoEnergy, Inc. , 962 S.W .2d 5 07, 5 24 ( Tex . 199 8)

. On t he ot her hand, the ele ments of a breach of f idu ci ar

y duty cl aim are : (1 ) a f idu ci ar y rel ati onshi p betw een t he pl ain ti ff and defendant; (2 ) the d efendant breache d hi s fid uci ar y duty to the p lai nti ff ; and ( 3) the defendant’ s brea ch res ult ed in inj ur y to the plai nti ff

or bene fit t o the defendant. Se e Punt s
v. W il son , 137 S.W .3d 889 , 891 (Te x . App .–T exarkana 2004 , no p et.); se e al so Los Cuc os Mexican Caf

e, Inc. v. Sanchez , N o. 1 3 -0 5- 578- CV , 200 7 Tex . Ap p. LE X IS 3 408, at * 16 (Te x . App .–Corp us Christi May 3, 200 7, no pet. ) ( me m. op.). b. Discus sion The tr ial co urt di re cte d a v erdict i n fav or of appel lees a s to G ibn ey ’s remaini ng cause s of

action against Roy and Ana-T ech, stating thatGibne y failed to prove dam ages. W it h respect t o damag es, the follo w ing ex chang e oc cur re d: THE CO URT:

. . . . [Y]ou sti ll hav en’ t tol d me w hat w oul d be th e me asure of

dam ages for Micro-Blen d , beca use e ve n if t h a t we re s o , t h e n fo r th e wo r kt o h a ve bee n don e, it had to have bee n pa id for. Th ere had to be a lo ss to som eon e. Micro-Blend w ould hav e had to be pay ing s o m e th ing for i t. F ro m the o nseti n thi s c ase, y ou’ v e s aid al l the dam ages, every

pen ny paid to Ana -Te ch are21 dama g e s i n t h i s c a s e
. S o me b o d y w a s g e tt i ng some s ki ds. So mebody w as sel li ng a profit. There w as a c osti nv olv ed i n sell ing that product

. Now , w ith all t h e m o n ey com ing i n, th ere’s X amount o f doll ars. A n d a produ ct is bei ng del iv ered. Somehow

there had to be a cos t t o i t, and y ou just seem to w rite tha t outcomp letely i n y our theo ry on t his ca se. An d I can’ t do that. [Coun sel for Gibne y]: Judge, tha t’s a dispu ted issue of fact for the jury to de ci de. TH E C O U R T: To be a d i s p u t e d i s s u e o f fa ct , t h e re h a s to be ev ide nce w hic h reason abl e m inds c oul d not differ, Cou nsel , and there’s no e v ide nce to suppo rtthatfig ure, ok ay , in thi s par ti cul ar ca se. Al l ri g ht. Al l ri g ht.

. . . . THE CO URT

. . . . I’ m g oin g to g ra nt y our re q uest [moti on for direct ed v erdict]. I don’ t t hin k t h e re ’s any evidence regarding the d am ages. At trial, Gibne y

repea ted ly

argued tha t Ana -Te ch w as a sham organiz ation thatdid not p er form any serv ic es for the benef itof Mic ro -B len d; rat her , Gibne y asser ted that itwas Mi cro- Bl end w ho was actu all y per forming the ser

v ic es. Throug hout tr ial , G ibn ey cl aimed that all money

recei v ed by

Ana- Tech from Mi cro-B le n d wa s damag es and t hat t he
measurement an d c alc ula ti on of the damag es w as a fact is sue for th e j ur y to d e cide. Appel lee s c ountered by present ing ev ide nce that Ana- Tech’ s “ pay ro ll se rv ic es” co nferred a benefitto Mi cro- Bl end and thatAna- Tech was not a sh am org ani z ati on. Fur therm ore, appel lee s n oted that alt houg h the co rrectm easure of damages w as benefit of the barg ain , Gi bney fail ed to pl ead any

theo ry for t he meas urement of damag es. Gi bney offered th e ex per

t t est imony

of W endy

Kur z , a cer ti fied publ icac count ant, to est ablish th at Micro-Blend mad e $4 .93 million in pa ym e n ts to An a-T ech for payroll22

ser v ic es. Ku rztestif ie d tha t s he was abl e to make t his dete rmi nati on by matc hin g up amounts thatw ere i n M irco- Bl end’ s ex pendi tures to amoun ts re corded i n Ana- Tech’ s t ax returns. How ever, Gibney failed to provi de a ny evidence th at An a-T ech d id notconfer a ben ef it to Micro-Blend in exchange for the $ 4.9 3 million in paymen ts ma de. Gibney only p re se n te d hi s o w n s elf- ser v ing tes ti mony

thathe b eli ev ed th at A na- Tech was a s ham
org ani z ati on and that Ana- Tech had not confer re d any benefitto Mi cro- Bl end. In fact , G ibn ey

has mai ntai ned t hroug hout tr ial and on appeal that he was not perso nally invo lve d in the day-to-day ope ration s of Micro-Blen d, w hich un derm ines his all eg ed persona l kn o wl edg e of the re lat ion shi p betw een M ic ro -B len d and Ana- Tech. Other w is e, Gibn ey

fail ed to presentaddi ti onal ev ide nce as to t he appropr iat e meas ure for damag es, thatAna- Tech was a s ham org ani z ati on, a nd th at M ic ro -B len d su sta ine d any damag es. Becaus e of

this , Gibne y

fail ed to es tabl is h the damag es ele ment for eit her of his der iv ati v e caus es of acti on. See John son & Higgins of Tex., Inc. , 962 S.W .2d a t 524 (n oti ng that to est abl is h common law fraud, a pla int iff mus t prov e, among other thi ng s, that: “( 6) the par

ty su ffered i nju ry .” ); see als o Punt s , 137 S.W .3d a t 891 ( sta ti ng thatamong the elem ent s for a brea ch of f iduciary dut y claim is a requirem entthatthe de fend ant ’s breach results in an injury

to the p laintif

f ). T here fore, w e con clude thatthe trial court did not err i n g ran ti ng a pp el l ee s ’ mo ti on for d i recte d v erdi ct as to Gi bn ey ’ s re ma i ni ng der i v at i v e c l ai ms ag ain st Roy

and Ana- Tech. Ac cordin g ly , we ov er ru le Gi bney ’sse cond is sue. 3. T he Tr ial Co ur

t’ s D irec te d Verd icto n Gib ney ’s D erivat ive C laim s In hi s t hird i ss ue on appeal , G ibn ey as ser ts that the t ri al cour

t’ s d irect ed v erdict on his der iv ati v e c laims is not suppo rt ed by the re cord. Spec ific all y , G ibn ey note s t hat t ax returns, ban k state me nts, ch ecks, and other docu me nts ad mitt ed int o evidence estab lish23

that Roy , personal ly

and throug h hi s o ther compani es, si phoned money from M ic ro -B len d. Gi bney al so cont ends that Roy ’s co mpanie s p ro v ide d no ser v ic es for M ic ro -B len d ev en thoug h M ic ro -B len d pai d R oy ’s co mpanie s for v ar iou s s er

v ic es and t hat M ic ro -B len d’s tax
re tur ns do notreflect v ar iou s other so urces of inc ome. In ad dit ion , G ibn ey arg ues that the tr ial co urt’ s direct ed v erdicts on his der iv ati v e cl aims of fra ud and breach of f idu ci ar y duty
w ere “ cl ear ly premature and improper and re q uires [si c] re v ersal .” C onv ersel y , app ell ees c o n t e n d t h a tG ib n e y’s m o s tre c e n tli ve p le a d in g, h is s e ve n t h a m e n d e d p e t it io n , is d e fe ct ive in that Gi bney

fail ed to pl ead any

measu re of damag es to s uppor t a jud g ment. Appel lee s als o arg ue th at t he tr ial co urt’ s d irect ed v erdicts w ere not“ premature” be ca u se the t ri al court is aut horized to direct a verdict in fa v or of a defend antonce the pla intif f rests his
cas e- in- chi ef and the ev id e n ce a dduce d at that poi nt c oncl usi v ely prov es facts that est a b l i s h t h e r i g h t o f t h e mo v a n t , o r n e g a t e s t h e r i g h t o f t h e n o n mo v a n t , t o j u d g me n t

. a. A pp licab le L aw A directe d v erdict is p rope r on ly u nde r limite d circumsta nces: (1) when the ev iden ce conc lus iv ely

es tabl is hes the r ight o f t he mov ant t o j udg ment or neg ates the ri g ht of the opponentor

( 2) w hen th e e vi dence i s i nsuffici ent t o rais e a mat er ial fact i ss ue. Se e Prude ntial In s. Co. v. Fin. Review Servs., Inc. , 29 S.W .3d 7 4, 77 ( Tex . 200 0) ; Ray v. McFar lan d , 97 S.W .3d 7 28, 7 30 (T e x. App.–F ort W orth 20 03, n o pet .) ; see a lso Kelly v. Di oces e of Cor

pus Chr is ti , 832 S.W .2d 88, 90 -91 (Te x . App .–Corp us Chris t i 1 9 9 2 , w rit di s m ’d w. o
. j. ). In rev iew ing a directed verdict, w e mu st credit favorable evidence if
reaso nab le jurors could an d disregard cont rary ev iden ce unle ss reason able jurors could not. See Cit

y o f Ke ller

, 168 S.W .3d a t 827

. If the q uest ion to be decide d is w het her the losing party at trial raised a ma terial fact24

is sue, w e c onsi der

al l the e v ide nce in a l ig ht mos t fav orabl e to the p arty ag ain st w hom the
v erdict was ins tr uct ed and dis re g ard al l contra ry e vi dence and inferences
. See C oast al Tr ansp. C o. v

. Cro wn Ce nt. Petr

ole umC or

p. , 136 S.W .3d 2 27, 2 34 ( Tex . 200 4)

. In
ess ence, w e g iv e the l osi ng par ty the benefit of al l re asona ble inferences created by the
ev ide nce. See i

d. If w e det er mine that any co nflicti ng ev ide nce of proba ti v e v alu e rais es a mater ial fact i ss ue on any theo ry of re cov er

y , t hen t he di re cte d v erdict i s i mprop er becau se suc h an is sue is for the j ur y to re sol v e. See Szczepani k v. Fi rs t S. T ru st Co. , 883 S.W .2d 648 , 649 (Tex. 1994 ) ( per curiam ). Moreover, “[a] trial court ma y not prop erly direct a v erdict, on its ow n mo tion, if all of the ev iden ce ha s not be en p resen ted .” W edgewor th v . Ki rskey, 985 S.W .2d 1 15, 1 16 (T e x. Ap p .– Sa n A n to n io 19 9 8 , p e t. de n ie d ) (ci ti n g Nassar v. Hughes , 882 S.W .2d 3 6, 38 (Te x . App .–Hou ston [1st Dist.] 19 94, w rit denied )). It is rev ersible error if the trial court direct s a v erdict before the pla int iff has present ed all of his ev ide nce. Id. ( ci ti ng Buckner
v. Buck ner , 815 S.W .2d 877 , 878 (Tex. App. –T y ler 1991 , no wr it)). b. Discus sion Gibne y argues t hatt he trial co urt’s d irected verdicts on his derivativ e claims were premature and improper bec ause the tr ial cour

t direct ed the v erdicts in fav or of appel lee s based on l imi tati ons before a ppel lee s h ad present ed thei r ev ide nce. G ibn ey , howev er , has notprovi ded this Court w ith an y auth oritysu ppo rting his cont ent ion th at th e trial court mu st
w aitunti l the d efendant has present ed it s cas e- in- chi ef t o directa v erdict. SeeT EX
. R. A PP
. P. 38.1( h)

. In fact, sev eral T exas courts have conclud ed th at th e trial court ma y direct a v erdict
o n c e t h e p l a i n t i ff h a s p re s e n t e d i t s c a s e - i n - c h i e f. See Wedgeworth , 985 S. W .2d a t 116 ;G i bney , i n hi s case- i n- chi ef , pr esent ed v ol um i nous pay r ol l r ecor ds, i nv oi ces, checks, r ecei pt s, and 19 bi l l s of l adi ng. I ncl uded i n t hese v ol um i nous r ecor ds wer e cop i es ofw hat w e hav e pr ev i ousl yr ef er r ed t o as D ef endan t ’ s Exhi bi t s 45, 72, and 74, whi ch, as we hav e pr ev i ousl yconcl uded, concl usi v el yest abl i shed t hat G i b n e y d i d n o t e s ta b l i s h a ri g h t t o ju d g m e n t o n s ta tu te o f l i m i ta ti o n s g ro u n d s
. See Kell y v. D iocese of

C or pus C h ris ti , 83 2 S

. W

. 2d 88 , 90 -91 (T ex
. A pp
. –C orp us C hri s t i 19 92 , w ri t di s m ’ d w

. o.j

. ).

S peci f i c a l l y , Ro yn o t e s t h a t : “ ( 1 ) Gi b n e y ’ s e x p r e s s i o n o fp e r s o n a l o p i n i o n t h a t t h e s a l a r i e s and 20 com pensat i on wer e ‘ shocki ng’ i s i ncom pet ent ev i dence; ( 2) ev i dence oft he a m ountof t he sa l ari es and c om pe ns ati on al on e d oe s no t provi de evi de nc e of excessi v eness; ( 3) ‘ exces s i ve c om pe ns ati on ’ cl ai m s requ i re exper t t est i m onyt o r ebutt he p r esum pt i v e r easona bl eness oft he sal ar i es and com pensat i on r ecei v ed; and ( 4) t o t he e xt ent pr of i t f r om t r ansact i ons b et ween M i cr o- Bl end and ot herC ul v erent i t i es cou l d be const r ued as co m pe ns ati on , t he evi de nc e e i t he r c o n c l u s i v el yes t ab l i s he d t ha t t he t ran s ac t i on s oc c urred be fore N ove m be r 27, 19 98 or di d n ot s ho w an yprofi t t o t he ot he r C ul ve r e n ti ty

. ” R oy furt he r notes t ha t “[ m ] ere 25 Nas sar , 882 S.W .2d a t 38; Buck ner , 815 S.W .2d 877, 878. It is onl y re v ersi ble er ro r if the tr ial co urt di re cte d a v erdict w it hout all ow ing the pla int iff t o present all of i ts ev ide nce. See W edgewor th , 985 S.W .2d a t 116

. The record re flect s that the t ri al cour t’ s d irect ed v erdicts
occ ur re d after

Gi bney w as afforded t he opport uni ty to presentall of his ev ide nce to t he tr ial
c o u rt

. T h e re fo re , t h e t ri a l c o u rt ’s d i r e c t e d ve rd ic t s we re n o tp re m a t u re
. Ad d it io n a ll y, 19 becau se w e hav e already deter mined that Gi bney ’s der iv ati v e c lai ms fail , G ibn ey has fail ed to presentthi s C our

t w it h a mat er ial fact i ss ue w hic h woul d be re ser v ed for a jur

y to de ci de. See P ru denti al Ins . C o. , 29 S.W .3d a t 77 (h old ing thata di re cte d v erdict i s p ro per i f the pla int iff has fail ed to rais e a mater ial fact i ss ue) ; Ray, 97 S.W .3d a t 730 ( same) ; see a lso Kelly, 832 S.W .2d a t 9 0 -9 1 ( sa me). Ba sed on th e foreg oin g , we c oncl ude t hat t he tr ial
court ’ s d i re ct e d v e rd i ct s o n G i b n e y ’ s d e r i v a t i v e c l a i ms w e re n e i t h e r p re ma t u re nor improper
. Acc ordin g ly , we ov er ru le Gi bney ’s thi rd i ss ue. B. Gi bn ey ’s I nd iv id ual ize d Sha reh ol der Op pressio n Cl aim 1. Fac tual Sufficienc y of the Jury ’s Findings of Exce ssi ve Compensa tion By his f irst issue on cross-app eal, Roy conten ds tha t the ev iden ce in the record is factu ally insuf f icient to supp ort the jury ’s fin dings thatRoy paid him self

and his fa mily
me mb ers excessiv e com pen sation

. On the ot her ha nd, Gibne y asserts tha t the record 20m i nor i t y shar ehol derdi ssat i sf act i on wi t h cor por at e go v er nanc e i s noteno ugh t o sup por t a f i ndi ng o f

shar ehol deropp r essi on. Ev i dence ofcond uct pr ej ud i c i al t o t he m i nor i t yshar ehol der , so har sh an d bur densom e as to vi si bl ydep ar t f r om or di nar yst andar ds of f ai rdea l i ng, i s r equi r ed. T her e i s no such evi de nc e i n t hi s rec ord

. ”

G i bneym akes t he f ol l owi ng a l l egat i ons wi t h r espectt o hi s excessi v e com pensat i on cl ai m s aga i nst 21 R oy ’ s f am i l y m em ber s: (1 ) B ro th e r— D o u g C u l v e r, w i th l i ttl e o r n o e d u c a ti o n , n o l i c e n s e , n o c e rti fic a ti o n , no o f f ice , a n d w a s m a k i n g o v e r $ 7 2 ,0 0 0 .0 0 , i n c o m p e n s a tio n p e r ye a r, pl us , ben ef i t s; ( 2) D i sabl ed Son— T r oyC ul v er , wi t h a [ b] r ai n i nj ur yand r ecei v i ng Soci al Secur i t yBenef i t s, wi t h l i t t l e orno educat i on, no l i cense, no cer t i f i cat i on, and onl ysweeps and cl eans- up t he shop was m aki ng ov er$72 , 000. 00, i n com pensat i on p er y ear , pl us, ben ef i t s; ( 3) D aught erD awon [ si c] S p i e g e l h o ffw i th l i ttl e o r n o e d u c a ti o n , n o l i c e n s e , n o c e rti fic a ti o n , a n d w h o [s i c ] j o b w a s to answert he t el ephon e, was m aki ng ov er $46, 000. 00 i n com pensat i on p ery ear , pl us be nef i t s. ( 4) Fam i l yM em ber/ Fri end— T er r y D oy el , t he se cr et ar yw i t h t hr ee ( 3) H at s, wi t h l i t t l e orno educat i on, no l i cense, no cer t i f i cat i on
. . . was m aki ng ov er $80, 000. 00 i n com pensat i on p er y ear , pl us be nef i t s. Cro ss- appel l ant , C ul v er , Jr

. , has l i t t l e ed ucat i on, no l i cense, no c e rti fic a ti o n , a n dd o e s n o t k n o wh o wt o b u ilda s k id , w a s d o u b le d ip p in g , b y m a k in g d o u b le c om pe ns ati on from M i c ro-B l en d, I nc
. , of ove r $18 6,00 0.00 pe r y ea r, pl us , be ne fi t s
. ( R ec ord c i t ati on s om i t t ed ) ( em ph as i s i n o ri gi na l ). 26 is dev oid of

anyev ide nce that the c ompensat ion pai d to Roy and his famil y

members was re asona ble g iv en th at many of Roy ’s famil y

member s “h a d littl e or no e ducat ion , no li cens es, no c erti ficat ion s, and/or di sabl ed a n d qu a lif ied for a ny j ob, yet were av erag ing
ov er $70, 000.00 per

y ear i n compensat ion , in Ing les ide , Texas, w it h a p opul ati on of about nin e ( 9) thou sand peopl e.” 21 a. A pp licab le L aw In con duct ing our fa ctua l suf f iciency rev iew , w e are mindf ul tha t the jury is the sole ju d ge o f t h e c re d ib il it y o f

wi t n e s s e s a n d t h e we ig h tt o b e g ive n t o t h e ir t e s t im o n y, a n d we
m a y n o tsu b s t it u t e o u r j u d gm e n tfo r t h a to f t h e ju ry. See G o ld e n Ea g le A rch ery, Inc. v. Jacks on , 116 S.W .3d 757, 761 ( Tex . 200 3) ; Maritim e Oversea s Corp. v. Ellis , 971 S. W .2d 402 , 407 (Tex. 1998 ). W e set asid e a f inding for factu al insuf f iciency only i f

it is so con trary to t he ov er

w hel ming w eig ht of the ev ide nce as to be c le a rlyw ro ng and unj ust

. Cain v. Bain , 709 S.W .2d 175 , 176 (Tex. 1986 ) ( per curiam ).W e m ust , as t he r ev i ewi ng co ur t , cl ear l yst at e whyt he j ur y ’ s f i ndi ng i s f act ual l yi nsuff i ci en t when 22 re v e rs i n g a ju ry ve rd i c t, b u t w e n e e d n o t d o s o w h e n a ff i rm i n g a ju ry’ s ve rd i c t. See G onz alezv. McA llen Med. C tr
. , I nc. , 195 S. W

. 3d 6 80, 681 ( T ex. 200 6) 27 b. Discus sion As prev iou sl y

menti oned, q uest ion s tw o and three of the jur y ch arg e as ked the fo llo wing: Ques ti on N o. 2. Do y ou f ind f rom a prepo nde rance o f t he evidence tha t Roy Culv er, Jr., since Nov ember

27, 1998, mali ci ousl y

or w ro ng fully

used his posi ti on as the Chi ef Ex ecut iv e Officer

of Mi cro- Bl end, Inc ., to award ex ces sive sal ar ies and c o m p e n s a t io n t o h im s e lf t o t h e d e t ri m e n to f

Mi c h a e l G ib n e y? Ques ti on N o. 3. Do y ou f ind f rom a p repo nde rance o f t he evidence tha t Roy Culv er, Jr., since Nov ember

27, 1998, mali ci ousl y

or w ro ng fully

us ed his posi ti on as the C hie f Ex ecut iv e Of

ficer of Mi cro- Bl end, Inc ., to award ex ces si v e s ala ri es and c o m p e n s a t io n t o m e m b e rs o f h is fa m il y t o t h e d e t ri m e n to f Mi c h a e l G ib n e y? The ju ry respon ded i n the aff ir mati v e to both q uest ion s. H ow ev er , t he ev ide n ce in the record do es no t supp ort the jury ’s conclusion s. 22 Gibne y directs this Court to “P la intif fs [sic] Ex hibits 13 and 15" in suppo rt of his cont ent ion th at Roy and his fam ily mem bers received excessiv e com pen sation . Th ese ex hib it s a re si mply

tax retur ns for R oy

an d hi s famil y

members t hat d emonst ra te t he fo llo wing: W ag es, Tips , and Ot her C ompensat ion Y ear Endi ng 2000 Y ear Endi ng 2001 Roy C ulv er , J r. $186,59 8.36 $1,093, 447.02 Troy C ulv er $68,511 .42 $77,558 .52 Terr y D oy el $50,408 .96 $68,412 .40The r ec or d, h ow ev er , c on t ai ns a n em ai l f r om G i bn eyt o H el m Pl et ch erBo we n & Sa un de r s L. L. P. 23 dat ed Novem ber18, 199 7, wher e G i bneyadm i t s t hat he m ade $100, 000 f r om M i cr o- Bl end i n t he y ear199 6. R oy not es t hat M i cr o- Bl end di st r i but ed al m ost $420, 000 i n di v i dends t o G i bney bet ween 199 5 a nd 20 04. G i b n e y t e s t i f i e d t h a t he r e m a i n e d a c o n t r a c t e m p l o y e e w i t h Mi c r o - Bl e n d , e a r n i n g o n l y$ 1 , 0 0 0 p e rw e e k, because he “ was expect i ng b i g pa y backs f r om t he d i v i dends. ” I n ad di t i on, t he r ecor d ref l ect s t hat G i bney v ol unt ar i l y r esi gned f r om t he M i c ro-B l en d B oar d an d f r om hi s posi t i on a s a cont r act em pl oy ee wi t h M i cr oB l e n d

. 28 Daw n Spi eg elh off $38,613 .60 $45,989 .96 Dou g C ulv er $31,000 .00 $67,140 .99 Roy include d a similar c h a rtwi th his m otion to set asid e the jury ’s fin dings, w hich chron icled, i n relevant part, the comp ensa tion p aid to Micro-Blen d em ployees. T he ch art prov ide d, i n rele v ant p art: Name Ana- Tech 200 0 Mi cro- Bl end 200 1 Roy C ulv er , J r. [C EO o f Mi cro- Bl end] $195,65 2 $176,42 4 Mi ke Lucas [Bo ard member ] 164,332 112,543 J.K . R amsey

[Bo ard member

] 107,223 105,995 Troy D ean C ulv er 72,915 80,365 Terr i Doyel 53,488 69,674 Daw n Spi eg elh off 40,440 45,989 Dou g C ulv er $ 31, 000 $ 72, 132 Gi bney as ser ts that he w as pai d $50,000 per y ear as a c ontractl aborer for M ic ro Blen d at th e time he lef t the comp any in 1995

. Based o n the abo v e me ntion ed sa laries, 23 G ib ney testif ied that “ it shocke d me to think tha t I’m making $50 ,00 0 and the re’s a
sec re tar y maki ng 80,000 or 70 or w hatev er , 75 or 78.” G ibn ey reli es sol ely

on h is l is ti ng of compens ati on for each ind iv idu al, hi s o w n tes ti mony that the s ala ri es w ere “ shoc ki ng ,” and his contenti on that pers ons w it hin m ini mal credenti als in Ing les ide , Tex as, sh oul d not make s uch sal ar ies

. This ev ide nce is not enoug h.29

The factual sc enar io in the i n st a n t case has not been s peci fical ly address ed by Tex as cour

ts. Howev er , t he F ifth C ircui t, in Rutter v. Com m is si oner of Inter nal R evenu e , has hel d tha t t he reason abl eness of compens ati on pai d by a c or porati on i s a q uest ion of fact and thateach case tur ns on its ow n fact s and circums tanc es. 853 F .2d 1 267, 1271 (5 th C ir . 198 8)

. The Rutter co u rti n ti m a te d the foll ow ing factors for a rev iew ing co urt t o
cons ide r in the d eter minat ion of re asona ble co mpensat ion : (1) the em ployee’s qualif ication s; (2) the na ture, exten t and scope of the em ployee’s work; (3) the siz e an d com plexities of the bu siness; (4 ) a c ompar is on of sal ar ies pai d w it h g ro ss i ncome and neti ncome; (5) the prevailing general eco nom ic conditio ns; (6) comp arison of

salaries w ith distribut ions to stockho lders; (7) the prevailing rates of comp ensa tion for co mp arab le positio ns in comparabl e c oncer ns; (8 ) the s ala ry

pol icy of the t ax pay er

[c or porati on] a s t o al l employees; and (9 ) in the c ase of small co rp ora ti ons w it h a l imi ted n umber of off ic ers[, ] t he am oun t of

comp ensa tion p aid to a particula r emp loyee in prev ious years. Id. (cit in g Owensby & Kr it ik os, Inc

. v. Com m ’

r of Inter nal R evenu e , 819 F .2d 1 315, 1323 (5 th C ir . 198 7) ; Mays on Mfg. C o. v . C om m ’ r of Inter nal R evenu e , 178 F .2d 1 15, 1 19 ( 6th Ci r. 1949) ). The R utter

co urt furt her

emphas iz ed th at no si ng le factor is deter minat iv e and that the re v iew ing cour t shoul d cons ide r and w eig h the total ity of t he fac ts and ci rc umstan ces i n det er mini ng reason abl e c ompensat ion

. Id. Mo re ov er , “ the acti on of the Board of Di re cto rs of a c or porati on i n v oti ng sal ar ies for a ny g iv en per iod i s e nti tl ed to the presu mp tion th at such salaries are reaso nab le and prope r.” Mays on Mf g. C o. , 178 F .2dAr t i cl e 12

. 31 oft he T exas Busi ness Cor por at i on Actpr ov i des t hat “ [ a] cl ose co r por at i on sh al l be 24 m an ag ed

. . . (1) by a b oa rd of di rec t ors i n t he s am e m an ne r an ord i na ryco rpo rat i on i s m an ag ed by i t s bo ard ofdi r ect or s und ert hi s Act ; or ( 2) i n t he m anner pr ov i ded f or i n i t s ar t i cl es of i ncor por at i on o ri n a shar ehol der s’ ag ree m en t

. ” T EX
. B US
. C OR P
. A C T A NN
. ar t

. 12. 31 ( Ver non 2003)

. T he T exas Busi ness C or por at i on Act al so a d d re s s e s th e d u ti e s o f d i re c to rs i n c l o s e c o rp o ra ti o n s
. See id. a rt. 1 3 .0 6 ( V e rn o n 2 0 0 3 ). S p e c i fic a l l y , “[i ]n di schar gi ng t he d ut i es of di r ect orund ert hi s Act orot herwi se, a di r ect or , i n con si der i ng t he b est i nt er est s of th e c o rp o ra ti o n , m a yc o n s i d e r th e l o n g -te rm a s w e l l a s t h e s h o r t- te rm i n te re s ts o f th e c o rp o ra ti o n a n d i ts shar ehol der s, i ncl udi ng t he p ossi bi l i t yt hat t hose i nt er est s m aybe best ser v ed b yt he co nt i nued i ndepe ndence of t he co rpo rat i on
. ” I d.

R o y r e c a lle d th a t o n o n e o c c a s io n th e B o a r d a u th o r iz e d a b o n u s o f $ 4 5 ,0 0 0 , b u t h e c o u ld n o t r e c a ll 25 when t he Boar d au t hor i z ed t he b onus. 30 at 11 9. 24 i. Roy ’s Compensa tion Roy tes ti fied th at he had g ra duated from hi gh sc hool , t hat h e di d nothav e any re lev ant l ic enses o r cer ti ficat ion s, and t hat h e c oul d notbui ld a s ki d. He further tes ti fied that he recei v ed c ompensat ion from A na- Tech and M ic ro -B len d; t hat h e bel iev ed th e compens ati on recei v ed from M ic ro-B lend w as re asona ble g iv en th at t he Boa rd had author iz ed th e pay ment; and t hat t he c ompensat ion re cei v ed from Ana- Tech was money o we d t o h im f ro m t h e win d in g u p o f A n a -T e c h b y vi rt u e o f

h is o wn e rs h ip o f

t h e co m p a n y. Roy tes ti fied th at he ag re ed to t ake chec ks for a co upl e tho usand a week from Ana- Tech,
ra ther than tak in g a l u mp sum of $150,000. R oy ’s tes ti mony reflect ed th at he recei v ed pay ments from both Ana- Tech and M ic ro -B len d for two or three y ears. Roy

stated that he
re cei v ed bonu ses on t hree to fiv e occ asi ons for hi s wor k a s t he c hie f ex ecut iv e off ic er of Mi cro- Bl end, but t hat t he bonu ses w ere al w ay s a w arded by v ote of the M ic ro -B len d Boa rd. Roy

den ied ever aw arding himse lf a bon us. 25 Gibne y , howev er, failed to presen t evi den ce up on which the tri al court or this C ourt
can co mp are an d me asure Roy’ s com pen sation

. In fa ct, Gibne y relies hea v ily on the fact that he al leg edl y

made on ly

$50, 000 per

y ear at Mi cro-Blend an d tha t R oy madeAs pr ev i ousl ynot ed, R oy ’ s t ax r et ur ns i ndi cat e t hat h e rec ei v ed $ 186, 598. 36 i n wages, t i ps, and 26 o th e r c o m p e n s a ti o n d u rin g 2 0 0 0 a n d $ 1 ,0 9 3 ,4 4 7 .0 2 i n 2 0 0 1

. T h e re c o rd d o e s n o t c o n ta i n i n fo rm a ti o n a s to t he e xt r a i ncom e Roy r ecei v ed i n 20 01. However , i t i s cl earf r om t he r ecor d t hat R oyhas cr eat ed a nd r un sev e r a l s u c c e s s f u l b u s i n e s s e s a n d i t i s p l a u s i b l e t h a t t h e a d d i t i o n a l i n c o m e i s d e r i v e d f r o m a n o t her such b u s i n e s s
.

D oug’ s t ax r et ur ns r ef l ect t hat he r ecei v ed $31, 000 i n wages, t i ps, and ot hercom pensat i on d ur i ng 27 2000 and $67, 140. 99 i n 20 01. 31 s ig n if ic a n t ly m o re m o n e y t h a n h e d id e ve n t h o u gh t h e i d e a fo r t h e c o m p a n y wa s h is o wn
. Gi v en R oy ’s st atus as the chi ef ex ecut iv e of ficer of an apparentl y

thri v ing bus ine ss , i t doe s not a ppear

unreas onabl e for

Roy to re cei v e $195,652 in c ompensat ion dur ing 2000 and $176,42 4 i n c ompensat ion dur ing 2001. Fur ther more, the ev ide nce demonst ra tes that 26 Roy ’s co mpensat ion w as author iz ed by the Board. The record does not cont ain su ff ic ien t evidence to overcome the presu mp tion th at com pen sation decision s mad e by the Boa rd
a re re a s o n a b l e a n d proper
. See Mays on M fg. Co. , 178 F .2d a t 119

. Mo re ov er , G ibn ey has not p re sent ed any ev ide nce as to the remaini ng el ements i nti mated i n Rutter in est abl is hin g thatR oy ’s co mpen sa ti o n was ex ces si v e or unreason abl e. See R utter , 853 F. 2d at1271. ii. Doug Culver’s Compensation At t ri al, D oug tes ti fied th at he does not hav e anylic enses or certi ficat ion s, but that 27 he w as train ed to l ear n the syste ms us ed by M ic ro -B len d. W it h respect t o D oug , G ibn ey int ro duced M ic ro -B len d’s tax retur ns to es tabl is h D oug ’s sa lar y for 2 000 and 2001: $31,000 and $72,132 , respecti v ely

. Dou g furt her tes ti fied th at he co ntr ibu ted $ 6,000 to $7,000 w orth of meter ing eq uip ment t o M ic ro -B len d and that he recei v ed shares of Mi croBl end s toc k i n ex chang e for his co ntr ibu ti on. Dou g al so noted that he made $9.00 per hour les s t han ot her

tec hni ci ans at M ic ro -B len d bec ause “R oy w anted to mak e s u re thathe
w asn’ t ac cus ed of paddi ng the pay ro ll w it h a k in fo lk. ” N o addi ti onal ev ide nce w asD o ye l’s t a x r e tu r n s r e f le c t th a t s h e r e c e iv e d $ 5 0 ,4 0 8 .9 6 in w a g e s , t ip s , a n d o th e rc o m p e n s a tio n in 28 2000 and $68, 412. 40 i n 20 01.

S pe i gel hoff ’ s t ax r et ur ns r ef l ect t hat she r ecei v ed $ 38, 613. 60 i n wages, t i ps, and ot her 29 com pensat i on i n 20 00 a nd $ 45, 989. 96 i n 20 01. 32 p re se n ted a s t o the remaini ng el ements es tabl is hed i n Rutter , es pe c i al l y

e v i de nce regarding prevailing rates of com pen sation for com para ble positions i n co m para ble compani es. See i

d. In fact , w e hav e not hin g to compare D oug ’s co mpensat ion to other than Gi bney ’s bal d as ser ti on that the compensat ion prov ide d w as “s hock ing .” Gi bney has not p re sent ed any

ev ide nce as to th e remain ing el ements i nti mated i n Rutter in est abl is hin g thatD oug ’s co mpensat ion w as ex ces si v e or unreason abl e. See i

d. iii. Ter ri Doyel’s Compensation Doyel tes ti fied th at s he g ra duated from hig h sc hool , but that she does not h av e any specia l licen ses or ce rtif ication s to ma nage th e bo okkee ping for Micro-Blen d. On ap pea l, Gi bney di re cts us to Mi cro- Bl end’ s t ax retur ns show ing Doy el’ s s ala ri es dur ing 2000 and 2 0 0 1 : $ 5 3 , 4 8 8 a n d $ 6 9 , 6 7 4 , re s p e ct i v e l y . C l e a r l y , w i t h i n t h e c o n t e xto f Rutter , evi den ce 28 of an empl oy ee’ s s ala ry and thei r q ual ific ati ons alo ne are notdi spos it iv e. See i d. T here fore, ba sed o n ou r review of the reco rd, Gibne y

did notestab lish thatDoy el’s compens ati on was ex ces si v e or unreason abl e. iv . Daw n Spiegel hoff’s Compensation At trial , G ibne y

failed to estab lish Spiegelho f f ’s educa tion level or q ualif ication s. Gi bney merely asser ts on appe al that Spi eg elh off had “l ittl e or

no e ducat ion , no li cens e, no c erti ficat ion , and w ho [si c] jo b w as to ans w er the tel ephone

. . . .” Ag ain , G ibn ey di re cts us to Micro-Blend ’s tax returns for the ye a rs 2000 and 200 1 to est ablish Sp eigelhof f ’s sal ar y : $40,440 and $45,989 , respecti v ely

. The ev ide nce ind ic ates thatSpieg elh off was 29T r o y’s ta x r e tu r n s in d ic a te th a t h e r e c e iv e d $ 6 8 ,5 1 1 .4 2 in w a g e s , tip s , a n d o th e rc o m p e n s a tio n in 30 2000 and $77, 558. 52 i n 20 01. 33 re spons ibl e for answer ing the tel ephone and fili ng at Mi cro- Bl end. Here, Gib n e y relied sol ely on t he amountof compens ati on to es tabl is h tha t Sp eig elh off recei v ed ex ces si v e or unreason abl e compens ati on. Howe ver, th e Rutter co urt es tabl is hed t hat o ne el ement alo ne i s n o t dis posi ti v e and that a rev iew ing co urt mus t c onsi der the facts and circumstanc es in total ity . See i d. Therefore, ba sed on our rev iew of the record, Spei g elh off ’s co mpensat ion w as nei ther ex ces si v e nor

unreason abl e.
v . Troy Culver’s Compensation W it h respect t o Tro y

C ulv er ’s co mpensat ion , G ibn ey tes ti fied th at Troy w or ked for Mi cro- Bl end dur ing a po rt ion of Gi bney ’s tenure at M ic ro -B len d from 19 92 to 1995. G ibn ey tes ti fied that Troy “s w ept the shop and cl eaned up.” Gi bney further tes ti fied th a t T roy sus tai ned a “b ra in damag e- ty pe inj ur y ” from a motorcy cl e acc ide nt, but t hat h e remaine d a M ic ro -B len d empl oy ee ev en after the inj ur y . As prev iou sl y

menti oned, Troy

recei v ed $72,915 i n c ompensat ion dur ing the y ear 2000 and $80,365 in compens ati on for th e y ear 200 1. Ag ain, Gib ney relies heavil y on the amo untof

comp ensa tion a lone to est a b lish 30
ex ces si v e or

unreaso n a b le co mpensat ion

. As w as the c ase ear li er , t his ev ide nce alo ne is not enoug h. See i

d. The ev ide nce demonst ra tes that T ro y , despi te his i mpair ment, w as
re spons ibl e for ass embli ng sy ste ms, w hic h incl uded c ompli cat ed w ir ing co mponents

. On appeal , R oy

note d tha t Troy ’s co mpensat ion i ncrease d b e caus e he w as pai d ov erti me,
w hich w as com me nsura te w ith T roy ’s in crease d respo nsibility at Micro-Blend . Th us, Gibne y has no t esta blished t hatt he Boa rd was u nrea sona ble in aut horizi ng T royCulv er’s sal ar ies i n 2000 and 200 1.34

In s u m, G i b n e y

h a s fa i l e d t o p re s e n ts u ffi c i e n te v i d e n c e t o o v e rc o me the presumpt ion t h a t t he c ompensat ion dec is ion s o f the M ic ro -B len d Board w it h respect t o Roy , Dou g , Troy , D oy el, and Spi eg elh off w ere reason abl e and proper
. See Mays on M fg. Co. , 178 F .2d a t 119

. Gibne y co n t inua lly

argues thatthe com pen sation af forde d the se ind iv idu als w as ex ces si v e i n “ Ing les ide , Tex as, w it h a popul ati on of ab out nin e ( 9) thou sand peopl e.” H ow ev er , G ibn ey has not prov ide d t h is Courtw it h s uff ic ien t ev ide nce show ing eit her the av erag e compensat ion scheme in Ing les ide , Texa s, or co mpensat ion sc hemes for c omparabl e pos it ion s w it h comparabl e compani es. Gi bney re li es sol ely on t he amount of compens ati on prov ide d and his ow n s elf- ser v ing tes ti mony

t hat t he c ompensat ion provided was “shocking” to establish that the com pen sation provided to Roy and his fam ily members w as ex ces si v e or unreason abl e. It is cl ear

to thi s Cou rt tha t t here i s a co mplet e abs ence of v it al fact th at t he
com p e n sa ti o n pai d to Roy and his famil y

members was ex ces si v e or unreason abl e; therefore, there i s ins uff ic ien t ev ide nce to suppor t the jur y ’s f ind ing that R oy

mal ic iou sl y

or wro n gf u ll y u s e d h is p o s it io n a s ch ie f e xe c u t ive o f f ic e r of Mi c ro -B le n d t o a wa rd e xc e s s ive
s a l a r i e s t o h i ms e l f a n d h i s fa mi l y m e mb e rs “ t o t h e d e t r i me n to f M i c h a e l Gi bney .” Se e Uni royal Good rich Ti reC o. , 97 7 S. W .2 d a t 33 4 (h o ld in g th a t a le gal su f f ici e n cy ch a lle n ge mayb e s u st a in e d w hen t he record di sc los es a c omplet e abs ence of ev ide nce of a v it al fact)

. Base d on the foreg oin g , w e conc lud e that the jur y ’s answers a s t o q uest ion s tw o and three of the jur

y charg e are ag ain st the o v er w hel ming w eig ht of the ev ide nce. See Cain , 709 S.W .2d at 176 . Accordingly , w e susta in Roy ’s first issue on cross-appe al.W e a d d r e s s t h is is s u e in f u ll b e c a u s e “ a c la im o fo p p r e s s iv e c o n d u c t c a n b e in d e p e n d e n tly 31 s up po rt ed by evi de nc e o f a vari etyof co nd uc t

. ” R e d m o n v . G rif fith , 202 S. W

. 3d 2 25, 234 ( T ex. App. –T y l er 2006, pet

. den i ed) ( ci t i ng D a v is , 754 S. W

. 2d at 381)

. “ Because any one of a v ar i et yof act i v i t i es orcond uct can g i v e r i se t o sha r ehol der oppr essi on, t he f act t hat t her e m ay be a l ack of ev i dence t o sup por t t he e xi st ence ofone such act i v i t ydoe s not d efe at t he cl ai m so l ong as t her e i s ev i dence t o sup por t t hat ano t hersuch i ns t an c e o f co nd uc t oc c urred

. ” I d. a t 2 3 4 n .3

.

W e ha v e al r eadydet er m i ned t hat t he j ur yque st i ons p er t ai ni ng t o exce ssi v e com pensat i on u pon 32 whi ch G i bneyr el i es wer e no t supp or t ed b yt he evi de nce; howev er , i n l i ght of t he R edm on c a s e , w e w ill exa m i n e t h e e n t i r e r e c o r d f o r o t h e r p o t e n t i a l i n s t a n c e s o f o p p r e s s i v e c o n d u c t o n t h e p a r t o f R oy t owar ds G ib n e y. See R edm on , 202 S. W

. 3d a t 234 & n. 3.

In s u p p o rt o f th i s c o n te n ti o n , G i b n e yc i te s s e v e ra l c a s e s fro m d i ff e re n t ju r is d i c ti o n s
. S e e C o n t ’l 33 C of f ee Pr ods. C o. v. C az arez , 9 3 7 S .W .2 d 4 4 4 , 4 5 2 (T e x . 1 9 9 6 ); D a v is v . S h e e r in , 754 S. W

. 2d 3 75, 381 ( T ex. A p p .– H o u s to n [1 s t D i s t.] 1 9 8 8 , w ritd e n i e d ); Bal vik v. Syl vest er , 31 1 N

. W

. 2d 38 3, 38 9 (N

. D

. 19 87 ); Baker v. C om m ercial

Body Bui

l der s, I nc. , 507 P. 2d 387, 393- 94 ( O r
. 1973) ( “ O r t he pl under i ng o fa “ cl ose” cor por at i on byt he si phoni ng offofpr of i t s by excessi v e sal ar i es or bonus pa y m ent s and t he o per at i on o ft he b usi ness f or th e s o le b e n e f it o fth e m a j o r i t y o fth e s to c k h o ld e r s , t o th e d e tr im e n t o fth e m in o r ity s to c k h o ld e r s , w o u ld c o n s t i t u t e s u c h “ o p p r e s s i v e ” c o n d u c t a s t o a u t h o r i z e a d i s s o l u t i o n o ft h e c o r p o r a t i o n u n d e rt h e t e r m s o fORS 5 7 .5 9 5 [O R
. R EV
. S T AT
. A NN
. § 5 7 .5 9 5 (W e s t 2 0 0 5 )].”) ; Brow ning v. C & C Pl yw ood C or

p. , 434 P. 2d 3 39, 340
- 43 (O r. 19 67 ). 35 2. The Trial Court ’s Finding of Shareholder Oppre ssi on 31 By his sec o n d i s s ue o n cross-app eal, Roy arg ues th at be cause the evidence is factu ally insuf f icient as to th e ju ry ’s fin dings of ex cessive compe nsat ion, th e trial court abu sed its discretio n in conclu ding t hatG ibne y was o ppre ssed as a m inority share hold er. Roy furth er co ntends thatno s harehol der oppress ion oc cur re d as a matt er of law

. Gi bney
ass erts that the t ri al cour t’ s fin din g of s harehol der oppress ion is suppo rt ed by two s eparate and indep end entjury

answers w hich prov ided tha t Roy ma liciously and w rongf ully used his posi ti on as the chi ef ex ecut iv e off ic er of Mi cro- Bl end t o award ex ces si ve salar ies and compens ati on to hi msel f and to members of hi s family

. Fi nal ly , Gi bney arg ues that the 32 si phoni ng off

of the p ro fits of a “ cl ose” co rp orati on as ex ces si v e s ala ri es or bonus pay ments for the sol e benefit of t he major ity sharehol ders and to the detrim e n t o f the minor ity sh arehol ders woul d c onst it ute o ppress iv e c onduct. 3336

a. A pp licab le L aw W hether ce rt ain acts w ere per

formed i s a q uest ion of fact, b ut t he det er minat ion of whe th e r such acts cons ti tute sharehol der oppress ion i s u sual ly

a q uest ion of law

for t he
cour t. W il li s v . By dalek, 997 S.W .2d 7 98, 8 01 ( Tex . Ap p .– Hou sto n [1s t D is t.] 1999, pet. deni ed) ; Davis , 754 S.W .2d a t 380 -8 1. W e rev iew t h e t ria l cour t’ s l eg al conc lus ion s d e
n o vo. BM C Soft ware Bel gium , N.V. v. Ma rchand , 8 3 S

. W

. 3 d 7 8 9 , 7 9 4 ( Te x . 2 0 0 2) ; see Pegas us Ener

gy Gr oup, Inc . v

. Cheyen ne Pet

ro leumC o. , 3 S

. W

. 3 d 1 1 2 , 1 2 1 (T e x. A p p
. – Co rp u s Ch r i s t i 1 9 9 9 , p e t

. d e n ie d ) ( “L e ga l c o n c lu s io n s o f t h e t ri a l c o u rta re a lwa ys rev iew able and t he app ellate co urt is n ot obligated t o giv e any p articular de feren ce to th ose conc lus ion s. ”). Speci fical ly , we rev iew the tr ial co urt’ s l eg al conc lus ion s d ra w n from t he facts to de ter mine thei r cor re ctn ess
. Ma rchand , 83 S. W .3d at 794 . If the review ing court deter mines th a t a conc lus ion of law i s e rroneous , butthe tr ial co urt rendered a proper jud g ment, then the e rroneous co ncl usi on of l aw w il l not req uire rev ersal

. Id. In Davis , the court of

app eals de f ined “oppressive condu ct” as follows: 1. m ajority share hold ers’ condu ct t h a t subst ant ially defeat s the m inority’ s ex pect ati ons that, obj ect iv ely v iewed, were bot h rea so n a ble under the ci rc umstan ces and cent ra l to the minor ity sharehol der ’s deci si on to j oin the v enture; or 2. bu rd ensome, harsh, or w ro ng ful c onduct; a l ack of probi ty and fair deal ing in the comp any’s af

fairs to the prejudice of some mem bers ; o r a visi ble depar ture from t h e s ta n d a rds of fair deal ing and a v iol ati on of fair pl ay on wh ic h e a c h sh a re h o ld e r i s e n t it le d t o re ly. 754 S. W .2d a t 381 -8 2; see a lso W illis , 997 S.W .2d a t 801

. Cou rt s mus t ex erci se caut ion in deter mini ng w hat s hows o ppress iv e c onduct. Wil lis , 997 S.W .2d a t 801

. A mi nor ity sharehol der ’s reason abl e ex p ect ati ons must be bal anced w it h the co rp orati on’ s n eed t o ex erci se it s b usi ness j udg ment and r un i ts busi ness eff ic ien tl y . Id. Therefore, a37

cor porati on’ s o ff icer s a n d di re cto rs are afforded rather broad l ati tude in condu cti ng
cor porate a ffairs d espi te t he ex is tenc e of a mi nor ity -maj or ity fiduc iar y duty

. Id. Ho we ve r, “[ c] o u rt s t a k e a n e s p e c ia ll y b ro a d vie w o f t h e a p p li c a t i o n o f

o p p re s s ive condu ct to a cl osel y -h eld c or porati on, w here oppress ion may more eas il y

be found.” Red m on , 2 0 2 S

. W

. 3 d at23 4 (quo ti n g Davis , 754 S.W .2d a t 381 ). Ad dit ion all y , maj or ity s h a re h o l d e rs a re s o me t i me s s a i d t o s t a n d i n a fi d u c i a r y re l a t i o n s h i p w i t h b oth t he
cor porati on th at t hey

co ntrol and w it h mi nor ity sh arehol ders. See D eBor d v . Cir cle Y of Y o a ku m, Inc. , 951 S.W .2d 1 27, 1 33 ( Tex . Ap p.–C or pus Chr is ti 1997) , re v’ d on other gr ounds , Stary v. DeBord , 967 S.W .2d 3 52 ( Tex . 199 8)

. b. Discus sion In t he i nst ant c ase, Gi bney reli es heav il y

on t he s e co n d p ro n g of the s harehol der oppress ion anal y si s a s s et forth i n Davis . Gibney onlypresen ted ev iden ce as to th e f irst prong —th e defeat of the min or ity sh a re hol der ’s reason abl e ex pect ati ons by the major ity sharehol der

—w it hin the cont ext of

div ide nd pay ments. In it s a nswer to q uest ion four of the jur y charg e, the jur

y conc lud ed that Roy did not mali ci ousl y or w ro ng fully w it hhol d di v ide nd pay ments to G ibn ey

from 199 8 to 2000. As prev iou sl y note d, G ibne y t e st ified thathe
re mained a c ontractempl oy ee w it h M ic ro -B len d, ea rn ing $1,0 00 per w eek, bec ause he “w as expecting big paybacks from the divi den ds.” Th e record ref lects tha t Gibne y chose to no t bec ome a s ala ri ed empl oy ee of Mic ro -B len d. The re cord f urther reflect s t hat G ibn ey re cei v ed almos t $420,00 0 in sto ck -rela ted pay ments from Mi cro- Bl end from 1995 to 20 04. In fact , t he record i ncl udes chec ks from M ic ro -B len d to Gi bney for t he foll ow ing date s a nd
am oun ts:Ar t i cl e VI of t he M i cr o- Bl end by l aws pr ov i des t he f ol l owi ng: 34 1. D ecl ar at i on T he bo ard of di rec t ors m ay de c l are at an ya n n u a l , re g u l ar or s pe c i al m ee t i ng of t he bo ard a n d th e c o r p o r a tio n m a y p a y, d iv id e n d s o n th e o u ts ta n d in g s h a r e s in c a s h , p r o p e r ty o rin sh ar e of t he co r po r at i on t o t he ex t en t pe r m i t t ed by , an d su bj ec t t o t he p r ov i si on s of , t he l aw s oft he St at e of

T exas. 38 Date Am oun t Reaso n Described on the Check Apr il 12, 1995 $13,475 .00 Par ti al Di str ibu ti on Janua ry 10, 1996 $97,070 .61 48% of Profit s for Y ear Endi ng 12- 31- 1996 Apr il 18, 2001 $57,419 .32 Di v ide nd of $3.23 79924 p er sh are on 17,733 shares Apr il 24, 2002 $57,419 .32 Di v ide nd of $3.23 79924 p er sh are on 17,733 shares Janua ry 1, 2003 $57,419 .32 Di v ide nd of $3.23 79924 p er sh are on 17,733 shares Febr uar y 25, 2003 $57,419 .32 Di v ide nd of $3.23 79924 p er sh are on 17,733 shares Februa ry 26, 20 03 $44 ,33 2.5 0 Div iden d of $2.5 0 pe r share Febr uar y 14, 2004 $36,466 .00 $2.00 per sh are di v ide nd on 17,733 shares The record al so cont ain s c hec ks f ro m M ic ro -B len d to other M ic ro -B len d sharehol der s dati ng from 199 5 to 2004. Li ke Gi bney , no other M ic ro -B len d s harehol der
re cei v ed ca sh di str ibu ti ons from M ic ro -B len d dur ing the 1998 t o 2000 ti me per iod
re ferenc ed i n the j ur

y ch arg e. Cl ear ly , G ibn ey w as nei ther

si ng led out nor

oppress ed, a s to d iv ide nd di str ibu ti ons at an y ti me. I n addi ti on, M ic ro -B len d’s Board was not o bli g ated to i ss ue y ear ly

di v ide nds to M ic ro -B len d s harehol ders, acc ordin g to arti cl e V I o f M ic ro Blen d’s byl aws. 34 See T EX
. B US
. C ORP
. A CT A NN
. art. 2.38- 1 ( Ver non 200 3) ( noti ng that2. R eser v es Bef or e pa y m ent of

anydi v i dend t her e m aybe set asi de out of anyf unds oft he co r por at i on a v a ila b e [s ic ] f o rd iv id e n d s s u c h s u m o rs u m s a s th e d ir e c to r s f r o m t i m e t o tim e in th e ir absol ut e di scr et i on t hi nk pr operas a r eser v e f und t o m eet cont i ngenci es orforequ al i z i ng di v i dends orf orr epai r i ng or m ai ntai ni ng a nypr oper t yof t he co r por at i on o rf orsuch ot her pur pose as t he d i rect or s shal l t hi nk conduci v e t o t he i nt er est of t he co r por at i on, and t he di r ect or s m ayabo l i sh an ysuch r eser v e i n t he m anneri n whi ch i t was cr eat ed. 39 the b oard of di re cto rs may , notsh all , aut hor iz e and the c or por a ti o n may , notsh all , pay share di v ide nds to sharehol ders subj ectto any rest ri cti ons in the cor porati on’ s art ic les of incorpo rati o n o r an y

restrictions set forth in th e T exas Business Corpo ration Act). Therefore, ba sed on our rev iew of the re cord, the jur

y ’s ve rd ict as to ques ti on four of the jur y ch arg e i s s uppor

ted b y the ev ide nce in the re cord. In addi ti on, the re cord reflect s t hat Gi bney ’s ex pect ati ons as the mi nor ity sh a re hol der w ere notdefeated b y the major ity sharehol ders. See Davis , 754 S.W .2d a t 381 -8 2. W it h respect t o the se cond p ro n g o f t he s harehol der

anal y si s s et forth i n Davis , Gi bney al leg ed th ro ug hout the tri al and on appeal thatR oy mal ic iou sl y

or w ro ng fully

deni ed him acc ess to the b ooks a n d r e co rd s of Mi cro- Bl end. See i d. If true, th is action would most cer tai nly be c onst ru ed as “ burdenso me, harsh, or w ro ng ful c onduct; a l ack of probi ty and fair dealing in the co mp any’s af fairs to t he p rejudice of some mem bers; or a vi sible dep arture f rom th e stan dard s of fair dealing and a v iolation of fair play on which each share hold er is entitled to rely .” Id. Article 2.4 4 of the T e xa s B u s in e s s Corporatio n Act p ro vide s t h e fo llo wing: Any person w ho s hal l hav e been a s harehol der for a t l eastsi x

( 6) months immedi atel y

precedi ng hi s d emand, o r shal l be the h old er of at l eastfiv e per cent( 5%)of all outs tandi ng sh ares of a cor porati on, upon written dem and sta ti ng the purpos e the re of , shal l hav e the ri g ht t o examine, i n person or by ag ent, acc ountant , or

att or ney , atany

reas o nabl e ti me or

ti mes, for any proper pur pose, i ts re lev ant b ooks and re cords of acco unt, minut es, and40

s ha re tran s fer

rec ords , an d to ma k e extracts t he refrom
. T EX
. B US
. C ORP
. A CT A NN . ar t. 2.44( c)( Ver non Su pp. 2 007) ( emphasi s a dded)

. Ar ti cl e 2.4 4 further prov ide s t hat i f a cor porati on refuses to al low su ch a s harehol der

ac ces s to i ts books and re cords, the cor porati on s hal l be l iab le to t he s harehol der for al l cos ts and
ex pense s, inc lud ing att or ney ’s fees, inc ur re d i n defendi ng hi s r ig hts under thatAr ti cl e. Id.
art. 2.44( D)

. In ad dit ion , t he c or porati on woul d be li abl e for any other re medies afforded by l aw
. Id. After hear ing al l the e v ide nce, the jury co ncl uded, in re spons e to q uest ion one of the jur y charg e, that Roy

di d notmal ic iou sl y

or w ro ng fully

prev ent G ibn ey

from i nspecti ng Mic ro -B le n d ’s b o o ks an d rec o rd s. Th e evid e n ce in th e rec o rd su p p o rt s t h e ju ry’s f in d in g. Roy tes ti fied th at on ly

on tw o or

three oc cas ion s d id Gi bney co ntact hi m and t hat G ibn ey did not send any

l etters t o M ic ro -B len d req uest ing to ex amine Mi cro- Bl end’ s b ooks and
re cords. Roy

f urther noted that as far

as he knew

Doy el, hi s s ecretar

y , di d notrecei v e any lette rs from Gibne y

conce rning M icro-Blend ’s books an d records; D oyel c or rob orat ed R oy ’s te st im o n y as t o th e la ckof w rit te n requ e st s fo r in sp e ct io n f ro m Gib n e y. An d , a l th o u gh Gibne y asserted througho ut trial and on ap pe a l that he mad e nu me rous requests ora lly and in w riting to insp ect Micro-Blend ’s books an d records, the reco rd doe s not con tain document ati on from G ibn ey reflect ing a de sir e and sta ti ng a proper pur pose for th e ins pect ion i n c ompli ance w it h ar ti cl e 2.4 4 of the Tex as Busi ness C or porati on Act. See i d.
art. 2.44( c)

. Therefore, t he jur y ’s v erdict as to q uest ion one of the j ur y ch arg e i s s uppor

ted by the ev ide nce in the record. Base d on the foreg oin g , Gi bney has not esta b lis h e d that Roy eng ag ed i n burdenso me or w ro ng ful c onduct t hat wo u ld c o n st it ute a cl aim for sharehol der

oppress ion

. See Davis , 754 S.W .2d at 381-82. Be caus e Gi bney has not41

e s t a b l i s h e d e i t h e r o f t h e tw o p ro ng s i n Davis , w e c oncl ude t hat t he tr ial co urt abu sed it s dis creti on i n c oncl udi ng thatGi bney had suc ces sfull y

es tabl is hed a cl aim for s harehol der
o p p re s s io n a ga in s tRo y a n d in a wa rd in g G ib n e y $ 2 5 0 , 0 0 0 in d a m a ge s
. Ac c o rd in gl y, we sus tai n R oy ’s se cond is sue on c ro ss -a ppeal

. Beca use w e hav e c oncl uded t hat G ibn ey has not est abl is hed a cl aim for share hold er opp ression againstRoy , w e n e e d n o tadd ress Roy ’s third issue on crossappeal pertai nin g to the p ro pr iety of aw ardin g i ndi v idu al damag es to G ibn ey
. SeeT EX
. R. A PP
. P. 47.1. 3. P re-Jud gm entIn te rest Finally , in h is t hird issue on app eal, Gib ney arg ues th at th e trial court erred in deny ing hi m pre-

jud g ment interestbec ause the t ri al cour t c oncl uded t hat h e was enti tl ed to reli ef for

sh arehol der

oppress ion , and bec ause he proper ly pl eaded for

pre- jud g ment int erest

. Beca use w e hav e c oncl uded that Gib ney is not entit led to a judg ment on eit her hi s d er i v at i v e c l ai ms or h i s s ha reh ol de r

o pp res s i on c l ai ms a nd b ec au s e Gi bn ey ’ s c l ai ms
w ere purel y

economicin nature , w e concl ude that the tr ial co urt di d notabus e i ts dis creti on in deny ing Gi bney

preju dg ment i nterest

. SeeT EX
. F IN
. C OD E A NN . §§ 304.101 , 304 .104 (V er non 200 6) ; John son & Higg ins of Tex. , 962 S.W .2d a t 530 ( preju dg ment i nterestdoes notapp ly to claims involv ing purely econ om ic loss); se e also Lege v . Jones , 919 S.W .2d 870, 875- 7 6 ( T e x. App.– Hou sto n [14 th D is t.] 1996, no w ri t) ( hol din g thatthe aw ard of prejud gmen t interestis discretion aryw ith the trial court). Accordingly , we overrule Gibney’s thi rd i ss ue. V. C ONCL US I ON Base d on the foregoing, w e af f irm the judgmen t of

the tr ia l c ourt as to Gibne y ’s42

derivativ e claims and we rev erse and rend er a take -noth ing judgm e n ta s t o Gibne y ’s sharehol der

oppress ion cl aims i n fav or of Roy C ulv er , J r.

_________

_________

________ DO RI C ON TRERAS G ARZA, J u s t i c e Me moran dum Opi nio n del iv ered and filed thi s t he 10t h day

of Apr il , 200 8.