1 

### CAUSE NO. 07-15 -00082- CV

IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS

AMARILLO, TEXAS Appealed from the 99 th 

### District Court Lubbock County, Texas ROBERT WESTERBURG, ADMINISTRATOR OF THE ESTATE OF R.D. WEST a/k/a RANDY DIXON WESTERBURG,

Appellants/Cross-Appellee,

vs. WESTERN ROYALTY CORP., Appellee/Cross-Appellant.
CROSS-APPELL EE ’S BRIEF
Steven Thornton State Bar No. 00789678 WESTERBURG & THORNTON, P.C. 606 0 N. Central Expressway, Suite 690 Dallas, Texas 75206 Phone No.: 214.528.6040 Facsimile: 214.528.6170 steve@mwtlaw.com
ATTORNEY FOR APPELLANT ROBERT WESTERBURG
CROSS-APPELL EE REQUESTS ORAL ARGUMENT ACCEPTED 07-15-00082-CV SEVENTH COURT OF APPEALS

AMARILLO, TEXAS 6/4/2015 4:40:36 PM Vivian Long, Clerk2 

### TABLE OF CONTE NTS
TA BLE OF CONTENTS ................................

.................. ... ...... . ...... 2 TABLE OF AUTHORITIES .....................................

............... ......... 3 SUM MARY OF CASE ....................................

... ........................... 4 REQUEST FOR ORAL ARGUMENT ...........................

......... ............ 5 STA TEMENT OF FACTS ..........................................

............ ......... 6 SUMMARY OF THE ARGUMENT ...................................

................. 10 ARGUMENT AND AUTHORITIES ............

... ..................... .. ............. 1 1 I. Standard of Review .....................

............... .............. ............ 1 1 II. Judge Sowder Properly Ordered Western Royalty to Produce Records

.... 1 2 A. Texas Law Regarding Corporate R ecords

............... ......... ... .... 12 B. Judge Sowder Properly Granted Westerburg Access to Western Royalty’s Books and Records

........................ ... ......... ......... 13 C. Western Royalty’s Point of Error is Meritless

...... ...... ..................... 1 4 C.1. Western Royalty Failed t o Properly Preserve Error Regarding the California Probate Court and Prevented Westerburg from Completing his Reporting Requirement

... .... ... ......... ..... ... 15 C.2. Judge Sowder’s Order Limited to Documents that Satisfy Westerburg’s Proper Purpose

......... ...... ... ................... . 16 C.3. Western Royalty Incorrectly Rep r esents the Effect of IRS Ruling ............................................................ 1 8 CO NCLUSION and PRAYER ..............................

......... ........... ...... ... 20 CERTIFICATE OF SERVIC E ...............................

............ ............. ... 2 1 CERTIFICATE OF COMPLIANCE

........................................... ........ 22 CROSS

- APPELLEE’S APPENDIX

.................................. ............. ... .. 2 33 

### TABLE OF AUTHORITIES

Case Law Baker's Campground, Inc. v. McCall a, 2012 Tex. App. LEXIS 6173 (Tex. App.

– Wac o 2012, no pet.) .......................................

............... 1 1 City of Houston v. Clear Creek Basin Authorit y , 589 S.W.2d 671, 678 (Tex. 1979) .................................................................................. 1 2 Creditwatch, Inc. v. Jackson , 157 S.W.3d 814, 816 (Tex. 2005) ...............

..... 1 1

Other Authorities California Probate Code § 8800 ...........................

............ ...... .... 6, 14, 2 3 California Prob ate Code § 8804 ............

......................... ............ 6, 14 , 2 3 California Prob ate Code § 8850 ....................................

............. 6 , 14, 2 3
Tex. Bus. Orgs. Code § 21.218 ......

...... .. .... 4, 6 , 7, 10, 11, 12, 13, 1 4 , 19 , 20, 23
Tex. Bus. Orgs. Code § 21.2 22

............ ...... ........................... ....... 4 , 7 , 23 Tex. R. Civ. P. 166a

... ... ................................. ..................... ......... ... 1 24 

### SUMMARY OF THE CASE In 2013, Robert Westerburg’s brother, R.D. West, died in California. A portion of the Estate of R.D. West included 350 shares of Western Royalty Corporation (hereinafter “Western Royalty”). Once appointed as administ rator of R.D. West’s estate and acting solely in that capacity, Robert Westerburg (hereinafter “Westerburg”) sought to examine the books and records of Western Royalty in order to ascertain a valuation of the stock owned by the Estate and to allow Westerbu rg to complete an inventory requirement set by the probate court and California probate law. Pursuant to the Texas Business Organizations Code, Westerburg made a request to Western Royalty for access to the books and records of the company.
Western Ro yalty refused. Westerburg filed suit against Western Royalty seeking access to the books and records of the company and recovery of his attorney’s fees, costs and expenses pursuant to sections 21.218 and 21.222 of the Texas Business Organizations Code.
A fter engaging in some limited discovery, the parties filed competing traditional motions for summary judgment. Judge Sowder considered both motions and ultimately granted Westerburg’s request and ordered Western Royalty to make available to Westerburg a d efined set of books and records for examination and photocopying. Judge Sowder refused to award Westerburg any attorney’s fees in this matter but did award him court costs and expenses.5 

### REQUEST FOR ORAL ARGUMENT Westerburg requests oral argument in thi s cause as he believes it would be helpful to the Court in evaluating these issues. Westerburg believes that given the nature of the claims he is making and the defenses set forth by Western Royalty, the Court may have questions for the parties that will be useful in reaching a decision.6 

### STATEMENT OF FACTS Mr. R.D. West died on August 22, 2013 in California. At the time of his death, R. D. West was a record holder of 350 shares of Western Royalty. A California Probate Court appointed Robert Westerbu rg to administer the Estate of R.D. West, deceased. Clerk’s Record, Vol. 1

– 95. Westerburg, by and through R.D. West’s ownership and being a holder of shares of Western Royalty, qualified to examine the corporate records of Western Royalty pursuant to Te xas Business Organizations Code § 21.218. Clerk’s Record, Vol. 1

– 97. On February 19, 2014, Westerburg delivered to Western Royalty a written demand for examination of sixteen specific categories of books and records. Clerk’s Record, Vol. 1

– 96. Wes terburg’s purpose in seeking the examination of these documents is to determine the fair market value of the Estate’s interest in Western Royalty for the purpose of preparing the required Inventory and Appraisement for filing in the pending probate case in the Superior Court of California, San Diego, California. Clerk’s Record, Vol. 1

– 97. Pursuant to the California Probate Code, Westerburg must file with the California Probate Court Clerk an inventory of the property to be administered in the Decedent’s estate together with an appraisal. California Probate Code §§ 8800(a), 8804, and 8850(a); Clerk’s Record, Vol. 1

– 95, 101

- 103. As Western Royalty is not a publically traded company and as Western Royalty does not produce and distribute any informatio n (other than a small7



### dividend to shareholders and a 1099 federal income tax reporting form) to its shareholders from which such a calculation can be made, Westerburg has no other means available to him which would provide the information necessary to comp ly with the California Probate Code. Clerk’s Record, Vol. 1

– 97. The only purpose for which Westerburg sought this information is to meet his obligations under the California Probate Code. Clerk’s Record, Vol. 1

– 97. Western Royalty refused Westerb urg’s request. Clerk’s Record, Vol. 1

– 97. As such, Westerburg brought suit against Western Royalty seeking the right to access and examine the requested books and records of Western Royalty and to recover his costs and expenses, including attorney’s fe es, pursuant to sections 21.218 and 21.222 of the Texas Business Organizations Code. Clerk’s Record, Vol. 1

– 97. Western Royalty objected to both of these claims. During the proceedings, Judge Sowder ordered Western Royalty to produce to Westerburg: 1 ) financial documents detailing the book value of the stock; 2) any financial statements from the last four years; 3) p rofit or loss statements from the last four years; 4) loan applications made by Western Royalty from the last four years; 5) federal and state tax returns submitted by Western Royalty from the last four years; 6) all existing oil and gas leases and corresponding division orders and royalty payments for the last four years; 7) a sworn statement from Tom Whiteside, President of Western Royalt y , that the company has no good will or intangible value; and, 8) any details of any stock sold, including purchase price and8



### amount of stock, that has occurred in the last seven years. Clerk’s Record, Vol. 1

– 75. In response to the Court’s order, Weste rn Royalty produced no financial documentation detailing the book value of the corporation’s stock. Western Royalty did produce 105 pages of documents. Those documents consisted of 2010

- 2013 tax returns, 3 leases and a sworn statement that the company has no good will or intangible value. Clerk’s Record, Vol. 1

– 107

- 220

. Western Royalty answered that it had no f inancial documents detailing the book value of the stock, no financial statements from the last four years and no profit or loss statements
f rom the last four years. Clerk’s Record, Vol. 1

– 107

- 220

. Based on this production, Westerburg was unable to determine the share value for Western Royalty and, consequently, was unable to fulfill his reporting obligation to the California Probate Court. Following this order and limited production of documents, the parties filed competing motions for summary judgment. In his motion, Westerburg detailed the problems with Western Royalty’s prior record production and the need for
additional documents to sat isfy his purpose of determining the value of the Estate’s shares in Western Royalty. After considering the motions and evidence adduced by both parties, Judge Sowder granted Westerburg’s request and ordered Western Royalty to produce documents in eight defined categories. Judge Sowder also awarded Westerburg court9



### costs and expenses. But, Judge Sowder denied Westerburg’s request for recovery of his attorney’s fees. Clerk’s Record, Vol. 1

– 256

- 259.10 

### SUMMARY OF THE ARGUMENT Westerburg contends that J udge Sowder properly granted his Motion for Summary Judgment and ordered Western Royalty to produce a specific category of books and records for examination pursuant to Section 21.218 of the Texas Business Organizations Code. Western Royalty’s production following Judge Sowder’s first order was insufficient to allow Westerburg to determine the value of the shares of Western Royalty. Given the evidence produced to the trial court by the parties, this Court should affirm Judge Sowder’s ruling ordering Weste rn Royalty to produce a specific category of books and records for Westerburg’s
examination.11 

### ARGUMENTS AND AUTHORITIES Western Royalty contends in this appeal that Judge Sowder improperly ordered Western Royalty to produce specific categories of books and records for Westerburg’s examination. Western Royalty relies on an IRS regulation and a prior order from Judge Sowder in its argument that it fulfilled its obligations under section 21.218 of the Texas Business Organizations Code, thus leaving Wester burg without a proper purpose for requesting additional information. But, the material that Western Royalty produced was insufficient to meet Westerburg’s needs for ascertaining a value for the shares of Western Royalty. Further, Western Royalty only pro duced a fraction of the material that the IRS regulation and Judge Sowder’s original order required. Finally, even if this Court determines that Western Royalty’s original production was sufficient to meet Westerburg’s needs, Western Royalty still violate d section 21.218 of the Texas Business Organizations Code by refusing Westerburg’s original, pre

- litigation request for access to the documents and forcing Westerburg to file the lawsuit.
I. Standard of Review Texas appellate courts review the grant of a traditional motion for summary judgment de novo. Creditwatch, Inc. v. Jackson , 157 S.W.3d 814, 816 (Tex. 2005); Baker's Campground, Inc. v. McCall a, 2012 Tex. App. LEXIS 6173 (Tex. App.

– Waco 2012, no pet.). In a traditional summary judgment proceedin g, the issue is whether the movant met its burden for summary judgment by establishing that no12



### genuine issue of material fact exists entitling the movant to judgment as a matter of law. Tex. R. Civ. P. 166a(c); City of Houston v. Clear Creek Basin Authori ty , 589 S.W.2d 671, 678 (Tex. 1979).
II. Judge Sowder Properly Ordered Western Royalty to Produce Records In both his prior ruling and in his ruling on the competing motions for summary judgment, Judge Sowder held that, pursuant to section 21.218 of the Texas Business Organizations Code, Westerburg is entitled to examine the books and records of Western Royalty and has a proper purpose for doing so. The central issue for Western Royalty’s appeal is that Western Royalty contends that it has already produ ced sufficient documentation to allow Westerburg to determine the share value for the company. Westerburg contended, and Judge Sowder ruled, that Western Royalty had not met its obligations under section 21.218 of the Texas Business Organizations Code.
A . Texas Law Regarding Corporate Records The Texas Business Organizations Code provides that a holder of shares of a corporation for at least six months is entitled, upon written demand stating a proper purpose, to examine and copy the corporation’s releva nt books, records of account, minutes and share transfer records. Tex. Bus. Orgs. Code § 21.218(b). More broadly, the Texas Business Organizations Code empowers a court, upon proof of a proper purpose, to compel a corporation to produce such records for examination13



### by the holder regardless of the period during which the holder was a record holder. Tex. Bus. Orgs. Code § 21.218(c).
B. Judge Sowder Properly Granted Westerburg Access to Western Royalty’s Books and Records In this case, Westerburg de monstrated to Judge Sowder that he met all of the requirements of section 21.218 entitling him to examine the books and records of Western Royalty. First, Westerburg adduced evidence that his brother, Mr. R. D. West, was a record holder of 350 shares of W estern Royalty for over 20 years. Clerk’s Record, Vol. 1

– 95. Mr. West died on August 22, 2013. Clerk’s Record,
Vol. 1

– 95. Westerburg then described for Judge Sowder how the Superior Court of California, County of San Diego, appointed Westerburg to ad minister the Estate of R.D. West, deceased. Clerk’s Record, Vol. 1

– 95. Second, Westerburg delivered to the Western Royalty a written demand for examination of sixteen specific categories of books and records on or about February 19, 2014. Clerk’s
Reco rd, Vol. 1

– 96

- 97. In that demand, Westerburg detailed his need for the examination. Clerk’s Record, Vol. 1

– 96

- 97. Western Royalty refused to comply with that request. Clerk’s Record, Vol. 1

– 97. Western Royalty did not contest any of these facts in the summary judgment proceedings. The only other issue was whether Westerburg had a proper purpose in requesting the examination of books and records. California probate law requires an administrator to file with the California Probate Court Clerk an inv entory of the14



### property to be administered in a Decedent’s estate together with an appraisal. Cal. Prob. Code §§ 8800(a), 8804, and 8850(a); Clerk’s Record, Vol. 1

– 95, 101

- 103. In order to satisfy this obligation, Westerburg needed to d etermine the fair market value of the Estate of R.D. West’s interest in Western Royalty. Western Royalty is not a publically traded company nor does it produce and distribute any information to its shareholders from which a determination of the fair market value of the sto ck can be made. Clerk’s Record, Vol. 1

– 97. As such, Judge Sowder determined that, as a matter of law, this need for information constitutes a proper purpose under section 21.218 of the Texas Business Organizations Code. With those facts established, Judge Sowder granted Westerburg’s request and ordered Western Royalty to make available for examination and copying several specific categories of documents. Clerk’s Record, Vol. 1

– 256

- 259. C. Western Royalty’s Point of Error is Meritless
Western Ro yalty makes three arguments that no proper purpose exists regarding Westerburg’s request for access to Western Royalty’s books and records. First, Western Royalty alleges that Westerburg did not request a finding from the California Probate Court as to th e value of the Western Royalty shares. Second, Western Royalty argues that four of Westerburg’s requests are not made in good faith to determine the value of the shares or for a proper purpose. Third, Western Royalty contends the only acceptable order wo uld be to follow an Internal Revenue Service ruling regarding valuation of shares. All of these arguments are15



### without merit and were properly rejected by Judge Sowder.

C.1. Western Royalty Fa iled to Properly Preserve Error Regarding the California P robate Court and Prevented Westerburg from Completing his Reporting Requirement Western Royalty argues that Westerburg’s alleged failure to request the California Probate Court to determine the value of the shares somehow impugns Westerburg’s proper p urpose in this matter. Assuming that Western Royalty intended to cite Appendix L instead of Appendix K on this issue (Appendix K is the Final Summary Judgment), Western Royalty is citing to a document that it neither attached to its Motion for Summary Jud gment nor provided to the trial court. Further, this document is not authenticated and contains multiple evidentiary failings including hearsay. As Western Royalty did not include this document at the trial court level and deprived Westerburg of an oppor tunity to refute it, Western Royalty has failed to properly preserve any error regarding Appendix L and Westerburg’s alleged actions before the California Probate Court. But, even if this Court allowed Western Royalty to proceed with this argument using t his document, this argument is ineffective to refute Westerburg’s proper purpose. As set forth in Westerburg’s affidavit, Western Royalty’s conduct has stymied Westerburg’s ability to meet his reporting requirements under the California
Probate Code. Cle rk’s Record, Vol. 1

– 95

- 100. Westerburg specifically described why he cannot meet that obligation with Western Royalty’s current disclosures and
what additional evidence he will need to do so. Clerk’s Record, Vol. 1

– 98

- 100.16



### Further, Westerburg’s affi davit states that he will complete his reporting requirement once he has sufficient information. Clerk’s Record, Vol. 1

– 97. Essentially, the document that Western Royalty improperly cites to this Court is preliminary and will be amended once this Court affirms the Trial Court’s ruling and Western Royalty makes available the required documents.

C.2. Judge Sowder’s Order Limited to Documents that Satisfy Westerburg’s Proper Purpose Western Royalty’s second argument claims that four of the document categories ordered by Judge Sowder do not meet Westerburg’s “Proper Purpose” of determining share value. These categories include the identities of shareholders, bank statements and cancelled checks for a 5 year period and cash flow reports and other doc uments reflecting monies received and expenditures made for the same five year period. Western Royalty simply asserts that these requests were not made in good faith to determine the value of the shares. Western Royalty offers no analysis or precedential authority to substantiate its criticism of Judge Sowder’s order. Western Royalty just says it. In fact, there is a very good reason that Judge Sowder included those four categories in the eight total categories of documents set forth in the Final Summar y Judgment. Initially, Judge Sowder’s ordered Western Royalty to make available for inspection seven specific categories of documents and provide a sworn statement that Western Royalty had no good will or intangible value. Clerk’s Record, Vol. 1

– 75.17



### W estern Royalty responded by producing four years of tax returns, three leases and a sworn statement that the company has no good will or intangible value. Western Royalty affirmatively stated that it had no f inancial documents detailing the book value of the stock, no financial statements from the last four years and no profit or loss statements from the last four years. 1 

### Clerk’s Record, Vol. 1

– 107

- 220

. This document production did not approach the level necessary to allow Westerburg to determine the share value for Western Royalty. Specifically, Westerburg was unable to determine the book value of the stock as he did not know the total number of shares issued and outstanding and the cash or cash equivalent of each and every asset of Western Royalty, including, but not limited to, the value of mineral interests owned by Western Royalty. Clerk’s Record, Vol.
1

– 98

- 100

. Other information that would bear on this issue would be the dates, prices and numbers of shares and parties to prior transfers of a ny shares. Clerk’s Record, Vol. 1

– 98

- 100

. Given that it would be impossible for Western Royalty to manage the company without such financial documentation, Westerburg pointed out that documents such as a stock registry, profit and loss statements, bala nce sheets or any other basic accounting information are critical to determining what the values

1 In an email to the Trial Court dated June 25, 2014, Mr. Tom Whiteside, President and attorney for Western Royalty, stated that the company had three Certificates of Deposit with a total value of approximately $103,000. Clerk’s Record, Vol. 1

– 221

- 222. Western Royalty did not produce a balance sheet evidencing $103,000 cash or an equivalent asset (such as a Certificate of Deposit) nor is there a document reflecting any expenditure of the $103,000.18



### of the Estate’s shares in Western Royalty are. Clerk’s Record, Vol. 1

– 97

- 100. Even if Western Royalty had given all of its financial information sufficient to determine the value of the business (which it did not), Westerburg still cannot evaluate the per share value without knowing how many shares are issued and outstanding. Clerk’s Record, Vol. 1

– 97

- 100. Since the Estate only owned 350 shares, the per

- share value is the critical issue for California Probate Court

– not the total value for Western Royalty. Consequently, Westerburg filed his motion for summary judgment and asked the trial court to expand the original order. After reviewing the affidavit of Robert Westerburg and the previous documents that Western Royalty produced, Judge Sowder ordered Western Royalty to produce eight specific categories of documents. C.3. Western Royalty Incor rectly Represents the Effect of

IRS Ruling
Western R oyalty’s last argument against Judge Sowder’s Final Summary Judgment is that an IRS ruling determines how shares of a closely

- held corporation are valued and that Western Royalty has complied with this ruling. Western Royalty has overstated both the langu age in and the effect of this ruling. The ruling includes the caveat that “ The following factors, although not inclusive are fundamental and require careful analysis in each case :”. (Cross

- Appellant Brief, Appendix G, emphasis added). By that very langu age, the IRS acknowledged that19



### the listed factors are not an exhaustive list of the issues which may be considered. Further, no language exists in this Ruling which reads that it is binding or pre

emptive on any court in any jurisdiction. While the IRS m ay consider it their own policy, Western Royalty failed to show how expanding beyond the categories set under this ruling constitute s any breach of law or a reversible error. Moreover, even if this Court were to hold that this ruling was conclusive and
pr e - empted any Texas law or judicial determinations, Western Royalty failed to comply with the requirements of the ruling. As set forth in C.3., Western Royalty’s production was wholly insufficient to meet Westerburg’s proper purpose, the requirements of th e IRS ruling or Judge Sowder’s first order. 2 

### Western Royalty is asking this Court to reverse Judge Sowder and hold that since Western Royalty says it does not have the kind of documents that IRS ruling identified, Western Royalty is absolved from its obli gations under 21.218 of the Texas Business Organizations Code. Given Western Royalty’s conduct, Judge
Sowder had no other option but to grant Westerburg’s Motion for Summary Judgment and to order Western Royalty to produce additional documents to satisfy Westerburg’s proper purpose.

2 Western Royalty wrote that the trial court accepted t he IRS ruling as “a good, common sense approach to use”. (Cross Appellant’s Brief, p. 15). That language appears nowhere in the trial court’s prior order and Western Royalty failed to cite where and when that statement was allegedly made.20 

### CONCLUSION and PRAYER Westerburg contends that Judge Sowder correctly granted his motion for summary judgment in that Westerburg is entitled to review Western Royalty’s books and records pursuant to section 21.218 of the Tex as Business Organizations Code. Westerburg put on evidence of each element of his claim to access to Western Royalty’s books and records as set forth in that section. Judge Sowder held that there were no genuine issues of material fact regarding those el ements and rendered a summary judgment in favor of Westerburg granting him access to eight specific categories of documents. Western Royalty contends that it has produced sufficient documents to satisfy Westerburg’s purpose. Based on the
uncontroverted e vidence before the trial court, Judge Sowder determined as a matter of law that Western Royalty had failed to produce the documents necessary for Westerburg to meet his obligation to the California Probate Court. Nothing in Western Royalty’s brief points to any contradiction in the evidence before Judge Sowder. As such, Judge Sowder properly granted Westerburg’s Motion for Summary Judgment. For the reasons stated herein, Westerburg prays that this Court affirm the portion of Judge Sowder’s ruling in the Final Summary Judgment in which he ordered Western Royalty to produce corporate books and records in eight specific categories. Given the evidence adduced at the summary judgment proceeding, Westerburg further prays that this Court render a judgment in fa vor of Westerburg21



### for his total attorney’s fees through this appeal. Finally, Westerburg also prays for all other relief, in law and equity, to which he may be justly entitled.

Respectfully submitted,

WESTERBURG & THORNTON, P.C. 6060 N. Central Expressway, Suite 690 Dallas, Texas 75206 Phone No.: 214.528.6040 Facsimile: 214.528.6170 steve@mwtlaw.com By:

______________________________ Steven Thornton State Bar N o. 00789678 ATTORNEY FOR PLAINTIFF

CERTIFICATE OF SERVICE I certify that a true copy of the above was served on each attorney of record or party in accordance with the Texas Rules of Civil Procedure and the Texas Rules of Appellate Procedure on this 4 th 

### day of June, 2015.

Steven Thornton22 

### CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify that this brief contains 3, 4 56 words (excluding the caption, identity of parties, table of conten ts, table of authorities, statement of case, statement of issues presented, statement of jurisdiction, signature, proof of service, certification, and certificate of compliance). This is a computer

- generated document created in Microsoft Word, using 14

- poi nt typeface for all text, except for footnotes which are in 12

- point typeface. In making this certificate of compliance, I am relying on the word count provided by the software used to prepare the document.

Steven Thornton23 

### CROSS
- APPELLEE’S APPEN DIX List of Documents Final Summary Judgment A California Probate Code § 8800 B California Probate Code § 8804 C California Probate Code § 8850 D Tex. Bus. Orgs. Code § 21.218 E Tex. Bus. Orgs. Code § 21.222 F12.W2014 11:15:00 """'-- 

### 8Uclr i"IIMt"CIII*



### NO. 2014-510,562

ROBERT WESTERBURG, 

### § ADMINISTRATOR OF THE ESTATE OF 

### § R.D. WEST a/k/a 

### RANDY DIXON 

### § WESTERBURG 

### § § \r.S, 

### § § WESTERN ROYALTY CORP. 

### § IN THE DISTRICT COURT

991H 

### JUDICIAL DISTRICT

LUBBOCK COUNTY, TEXAS
Flnallymmarv Judgmpnt 

### On December 8 2014, 

### the Court considered the following motions by 

### submission made In the above

.. ntltled and numbenld cause:



### a. P/Bintifrs Motion for 

### Summary Judgment; 

### and,
b. Defendant 

### Western Royalty ColponJtton's Motion for 

### SumtmJI)' Judgment 

### Altar consldellng the motions, pleadings, evidence 

### and the appropriate legal authority, In 

### part this 

### Court 

### Is d 

### the opinion 

### that Plaintiff's motion 

### should be GRANTED and that in part Defendanfs motion should 

### be DENIED. IT IS, THERFORE, ORDERED, ADJUDGED AND DECREED 

### that Plaintiff Robert Weetelburg, Administrator of the 

## Estate of 

### R.D. West a/kla 

### Randy Dbcon Weeterburg's Motion for Summmy Judgment Is

## GRANTED~" pert IT IS FURTHER ORDERED 

### that Dafendant Westem Royalty Corporation's 

## ·n part Motion for Summ&Jy Judgment is

## DENIED~ IT IS FURTHER ORDERED that the Defendant Weetem Royalty CorporatiOn shall produce to 

### Plaintiff Robert Westerburg, Administrator of 

### the Estate of 

### R.D. West 8/kJa Randy 

### Dixon Weatetburg the follOWing documents: TB1. The records containing the names and addresses of all past and current shareholders of the corporation and the number and class or series of shares issued by the corporation held by each of them.
2. The records containing the names and last known mailing addresses of shareholders entitled to vote at any shareholders meeting.
3. The bank statements and cancelled checks for the period January 1, 2009, to the present.
4. The cash flow report(s) and/or check register and/or check stubs reflecting the monies received and the expenditures made for the period January 1, 2009, to the present.
5. The documents describing the mineral interest and/or legal description of each mineral interest presently owned by Western Royalty Corp.
6. The deeds evidencing Western Royalty Corp.'s ownership of mineral or royalty interests.
7. The documents evidencing ownership, leasehold, or royalty interest in real or personal property owned by Western Royalty Corp.
8. The Division Orders reflecting mineral interests owned by Western Royalty Corp. IT IS FURTHER ORDERED that Defendant Western Royalty Corporation shall copy and email the above-described documents to Plaintitrs counsel, Steven Thornton. Defendant Western Royalty Corporation shall Bates-label the above-described documents and shall identify which documents are responsive to which categories set forth in this Order. Plaintiff shall reimburse Defendant for the reasonable costs of photocopying the above-described documents. IT IS FURTHER ORDERED that Defendant Western Royalty Corporation shall produce the above-described documents listed in this Order to Plaintitrs counsel, Steven Thornton, on or before _D_e_ce_m_b_e_r_ 1

_ 8

_th

______ ,, 2014 at 5:00p.m.

Final Summary Judgment Page2IT IS FURTHER ORDERED that Plaintiff have and recover from Defendant $0.00 Western Royalty Corporation the sum of $13,487.50 as reasonable and necessary attorney's fees incurred in this cause. IT IS FURTHER ORDERED that Plaintiff have and recover from Defendant Western Royalty Corporation the sum of $588.09 for costs incurred in this cause.**·-~URTHER** ORDERED that Plaintiff have and recover from t Western Royalty Corporation ve Thousand Dollars ($5,000.00) as



# c IT IS FURTHER ORDERED that the costs of court are taxed against the Defendant Western Royalty Corporation for which let execution issue if the same are not timely paid. IT IS FURTHER ORDERED that this judgment carries post-judgment interest at the
rate of 5.00% per annum from the date of this judgment until paid, together with all costs of
court in this behalf expended. All writs and processes for the enforcement and collection of this judgment or the
costs of court may issue as necessary. All relief requested in this case and not expressly granted herein is denied. This judgment, disposing of all the parties in the lawsuit and all of the issues, is final and appealable.

Final Summary Judgment Page3

### December 8, 2014 SIGNED 

# on-----------"

# w£&~~&~' JUDGE PRESIDING

# . .

® 

# LexisNexis ®

1 of 3 DOCUMENTS Deering's Cal i fornia Codes Annotated Copyright <C 20 14 b y Matthew Bender & Company , Inc

. a member of the LexisNexis Group. All rights reserved

.

... This document is current through Chapter 9 of • • • the 2014 Regular Session ofthe 2013-2014 Legis l ature. PROBATE CODE Division 7. Administration of Estates of Decedents Part 3. Inventory and Appraisal Chapter 1. General Provisions GO TO CALIFORNIA CO DE S ARCIDVE DIRE CT ORY Cal Prob Code§ 8800 (2014) Page 1

§ 8800

. Inventory and a pprai sa l ; Certification that tax r eq uir e m e nt s have been satisfied or a r e inapplicable
(a) The personal representative shall file with the court clerk an inventory of property to be administered in the decedent's estate together with an appraisal of property in the inventory. An inventory and appraisal shall be combined in a single document. ( b ) The inventory and appraisal shall be filed within four months after letters are first issued to a general personal representative. The court may a ll ow such further time for filing an inventory and appraisal as is reasonable under the circum s tances of the part i cular case. (c) The personal representative may tile partial inventories and appraisals where appropriate under the circumstance s of the particular case , but a ll inventories and appraisals shall be tiled before expiration of the time a ll owed under subdivision (b). ( d) Concurre n t with the filing of the in ve n tory and appra i sa l pursuant to this section, the personal r epresentative sbaJJ also file a certification that the requirements of Se c tion 480 o f the Revenue and Taxation Code eithe r : ( 1 ) Are not applicable because the decedent owned no real property in California at the time of death

. (2) Have been sati s fied by the tiling of a change in ownership statement w i th the county recorder or a s sessor of each county in California in which the decedent owned property at the time of death

. HISTORY: Enacted Stats 1 990 ch 79 § 14 (AB 759) , operative Ju l y 1, 1991. Amended Stats 1992 ch 1180 § 1 (SB 1639). NOTES: Former S e ct ion s : Former § 8800 , s im i lar to the present section , was added Stats 1988 ch 1199 § 82.5 , operative Jul y 1 , 1989 , and repealedStats 1990ch79§ 13 , operat i veJuly 1 , 1991.



### EXHIBIT "B"Cal Prob Code § 8804 

# LexisNexis ®

2 of 3 DOCUMENTS Deering's California Codes Annotated Copyright 0 2014 by Matthew Bender & Company, Inc. a member of the LexisNex.is G r oup. All rights r eserve d

. 

### *** This document is cWTent through Chapter 9 of*** the 2014 Regular Session of the 2013-20 1 4 Legislature.
PROBATE CO D E Division 7. Administration of Estates ofDecedents Part 3. Inventory and Appraisal Chapter 1. General Provi sio n s GO TO CALIFORNIA CODES ARCHIVE DIRECTORY
Cal Prob Code § 8804 (20 14) § 8804

. Failure to timely file inv e ntory and appraisal Page 5

If the personal r ep re sentat i ve refuses or negligently fails to file an inve ntory and appra i sa l within the time allowed under this chapter , upon petition of an interested person: (a) The court may compel the personal repre se ntative to file an inventory and appraisal pursuant to the procedure presc ribed in Chapter 4 (co mmencing with Section 11 050) of P art 8. (b) The court ma y rem ove the personal representative from office. (c) The co urt may impose on the personal repre sen tative personal liability for in jury to the estate or to an interested person that directly r esults from the refusal o r failure. The liability may include attorney's f ees, in the court's di scre tion. Damages awarded pursuant to th i s subdiv i sion are a liability on the bond of the p ers onal r ep re sentative, if any . HiSTORY: Enacted Stats 199 0 ch 79 § 1 4 (AB 759), operative Jul y 1 , 1991.
NOTES:
Former Sections: Forme r § 8804 , similar t o th e present sect i on, was added Stats 1988 ch 1199 § 82.5 , operative July 1, 1989 , and repealed Stats 1990 cb 79 § 13, operative July 1 , 1991.

Historical Derivation: ( a) Fo rm e r Prob C § 610, as amended Stats 1976 ch 922 § 1. (b) Form er Prob C § 6 11 , as amended Stats 1970 ch 1282 § 13. (c) Fonner Prob C § 8804 , as added Stats 1 988 ch 1199 § 82.5. (d) Fonner CCP §§ 14 50, 1451.Cal Prob Code § 8850



### e 

# LexisNexis e

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## e 2014 by Matthew Bender & Company, Inc. a member of the LexisNexis Group. All rights reserved.

•• • This document is current through Chapter 9 of ••• the 20 14 Regular Session of the 2013-2014 Legislature.
PROBATE CODE Division 7. Administration of Estates of Decedents Part 3. Inventory and Appraisal Chapter 2. lnventory Art i cle I . General Provisions
GO TO CALTFORNIA CODES ARCHIVE DIRECTORY Cal Pr o b Code§ 8850 (2014) § 8850. Contents of inv e ntory Page 8

(a) The inventory , including partial and supplemental inventories , shall includt: all property to be administered in the decedent's estate. (b) The inventory shall particularly specify the following property:

(1) Money owed to the decedent , including debts , bonds, and notes , with the name of each debtor , the date , the sum originally payable, and the endorsements, if any , with their dates. The inventory shall also specify security for the payment of money to the decedent , including mortgages and deeds of trust

. If security for the payment o f money is real property, the inventory shall include the recording reference or, if not recorded, a legal description of the real property. (2) A statement of the inte r est ofthe decedent in a partnership , appraised as a single item. (3) All money and other cash items , as defined in Section 8901 , ofthe decedent. (c) The inventory shall show, to the extent ascertainable by the personal representative , the portions of the property that are community , quasi-community , and separate property of the decedent.
HISTORY: Enacted Stats 1990 cb 79 § 14 (AB 759), operative July 1 , 1991.
NOTES:
Former Sections: Former§ 8850 , simi l ar to the present section. was added Stats 1988 ch 1199 § 82.5 , operative July l , 1989 , and repealed Stats 1990 ch 79 § 13, operative July 1, 1991.

Historical Derivation: (a) Former Prob C § 571, as amended Stats 1971 ch 1 648 §I , Stats 1986 ch 14 § 2.

### Tex. Business Organizations Code § 21.218 This document is current through the 2013 3rd Called Session
T exas Statutes and Codes > BUSINESS ORGANIZATIONS CODE > TITLE 2. CORPORATIONS > CHAPTER 21. FOR-PROFIT CORPORATIONS > SUBCHAPTER E. SHAREHOLDER RIGHTS AND RESTRICTIONS 

### § 21.218. Examination of Records (a) In this section, a holder of a beneficial interest in a voting trust entered into under Section 6.251 is a holder of the shares represented by the beneficial interest. (b) Subject to the governing documents and on written demand stating a proper purpose, a holder of shares of a corporation for at least six months immediately preceding the holder’s demand, or a holder of at least five percent of all of the outstanding shares of a corporation, is entitled to examine and copy, at a reasonable time, the corporation’s relevant books, records of account, minutes, and share transfer records. The examination may be conducted in person or through an agent, accountant, or attorney. (c) This section does not impair the power of a court, on the presentation of proof of proper purpose by a beneficial or record holder of shares, to compel the production for examination by the holder of the books and records of accounts, minutes, and share transfer records of a corporation, regardless of the period during which the holder was a beneficial holder or record holder and regardless of the number of shares held by the person. 

### History
Enacted by Acts 2003, 78th Leg., ch. 182 (H.B. 1156) , § 1, effective January 1, 2006. Annotations 

### Notes

Revisor’s Notes. --
No substantive change is intended. 

### Case Notes
Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights: General Overview Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights: Inspection Rights: Remedies Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights: Inspection Rights: Shareholders LexisNexis (R) Notes Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights: General Overview 1. Divorced wife, who had beneficial ownership of 10 percent of corporate stock standing on corporate records in the name of her former husband or a trustee, was entitled to examine the corporate books. Texas Infra-Red Radiant Co. v. Erwin, 397 S.W.2d 491, 1965 Tex. App. LEXIS 2378 (Tex. Civ. App. Eastland 1965). **Steve Thornton**Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights:

Inspection Rights: Remedies 2. Attorney’s fees should not have been awarded to a minority shareholder because the evidence did not show that corporate books and records had been withheld in violation of former Tex. Bus. Corp. Act Ann. art. 2.44(C) (recodified at Tex. Bus. Orgs. Code Ann. § 21.218(b) ). The company was entitled to impose reasonable restrictions for the protection and integrity of its books and records when it required that certain items be copied on its premises. Ritchie v. Rupe, 339 S.W.3d 275, 2011 Tex. App. LEXIS 2217 (Tex. App. Dallas 2011). Business & Corporate Law: Corporations: Governing Documents & Procedures: Records & Inspection Rights: Inspection Rights: Shareholders 3. Attorney’s fees should not have been awarded to a minority shareholder because the evidence did not show that corporate books and records had been withheld in violation of former Tex. Bus. Corp. Act Ann. art. 2.44(C) (recodified at Tex. Bus. Orgs. Code Ann. § 21.218(b) ). The company was entitled to impose reasonable restrictions for the protection and integrity of its books and records when it required that certain items be copied on its premises. Ritchie v. Rupe, 339 S.W.3d 275, 2011 Tex. App. LEXIS 2217 (Tex. App. Dallas 2011). LexisNexis ® Texas Annotated Statutes Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved. Page 2 of 2 Tex. Business Organizations Code § 21.218

**Steve Thornton**

### Tex. Business Organizations Code § 21.222 This document is current through the 2013 3rd Called Session T exas Statutes and Codes > BUSINESS ORGANIZATIONS CODE > TITLE 2. CORPORATIONS > CHAPTER 21. FOR-PROFIT CORPORATIONS > SUBCHAPTER E. SHAREHOLDER RIGHTS AND RESTRICTIONS 

### § 21.222. Penalty for Refusal to Permit Examination of Certain Records (a) A corporation that refuses to allow a person to examine and make copies of account records, minutes, and share transfer records under Section 21.218 is liable to the shareholder for any cost or expense, including attorney’s fees, incurred in enforcing the shareholder’s rights under Section 21.218. The liability imposed on a corporation under this subsection is in addition to any other damages or remedy afforded to the shareholder by law. (b) It is a defense to an action brought under this section that the person suing: (1) has, within the two years preceding the date the action is brought, sold or offered for sale a list of shareholders or of holders of voting trust certificates for shares of the corporation or any other corporation; (2) has aided or abetted a person in procuring a list of shareholders or of holders of voting trust certificates for the purpose described by Subdivision (1); (3) has improperly used information obtained through a prior examination of the books and account records, minutes, or share transfer records of the corporation or any other corporation; or (4) was not acting in good faith or for a proper purpose in making the person’s request for examination. 

### History
Enacted by Acts 2003, 78th Leg., ch. 182 (H.B. 1156) , § 1, effective January 1, 2006; am. Acts 2011, 82nd Leg., ch. 139 (S.B. 748) , § 25, effective September 1, 2011. Annotations 

### Notes

Revisor’s Notes. -- No substantive change is intended. 2011 amendment, deleted ′′ in consideration ′′ after ′′ certificates ′′ in (b)(1). 

### Case Notes
Business & Corporate Law: Corporations: Shareholders: Actions Against Corporations: General Overview Civil Procedure: Remedies: Writs: General Overview LexisNexis (R) Notes Business & Corporate Law: Corporations: Shareholders: Actions Against Corporations: General Overview 1. Shareholder that brought suit against a corporation seeking permission to examine the books and records of the corporation was entitled to attorney fees because the shareholder was the ′′ shareholder of record ′′ even though the shares were in the name of another pledgee to secure payment of corporate debt. Ft. Worth KJIM, Inc. v. Walke, 604 S.W.2d 362, **Steve Thornton**1980 Tex. App. LEXIS 3757 (Tex. Civ. App. Fort Worth 1980).

Civil Procedure: Remedies: Writs: General Overview 2. Where the relators, a company, and certain of its officers, brought a mandamus proceeding before the court to have the trial court expunge from the record an order for discovery, the court held that the trial court, in granting certain stockholders’ motion for discovery, had deprived relators of a jury trial on the issue of proper purpose because the stockholders would have received through the order allowing discovery all of the relief sought in the main suit, and thus relators were entitled to a writ of mandamus ordering the trial court to expunge its order for discovery. Uvalde Rock Asphalt Co. v. Loughridge, 425 S.W.2d 818, 1968 Tex. LEXIS 314, 11 Tex. Sup. Ct. J. 268 (Tex. 1968). LexisNexis ® Texas Annotated Statutes Copyright © 2015 by Matthew Bender & Company, Inc. a member of the LexisNexis Group All rights reserved. Page 2 of 2 Tex. Business Organizations Code § 21.222

**Steve Thornton**