AFFIRMED and Opinion Filed May 4, 2023 

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In The 

### Court of Appeals Fifth District of Texas at Dallas No. 05-22-00334-CV THIRD EYE, INC., Appellant V. UST GLOBAL INC., Appellee On Appeal from the 101st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-21-02821 MEMORANDUM OPINION Before Justices Reichek, Nowell, and Garcia Opinion by Justice Reichek Third Eye, Inc. appeals the trial cour t’s judgment granting UST Global Inc.’s requests for (1) specific performance of Third Eye’s contractual obligation to produce documents, (2) a writ of manda mus allowing UST to inspect Third Eye’s books and records, and (3) an award of attorn ey’s fees. Third Eye brings three issues generally challenging the factual sufficien cy of the evidence supporting the trial court’s rulings and the breadth of the judgment. We affirm.–2– Background In 2014, UST and Third Eye signe d a Subscription Agreement (the Agreement) pursuant to which UST acquire d 833 shares of Third Eye and became the company’s sole minority shareholder. The Agreement included a section entitled “Information Rights” that required Third Eye to deliver to UST, (a) a quarterly unaudited income statement and statement of cash flows, and an unaudited balance sh eet at the end of such month, prepared in accordance with gene rally accepted accounting principles, within forty-five days of the end of each fiscal quarter; (b) a yearly unaudited balance sh eet, statements of income and cash flows, and a statement of stockhol der’s equity within ninety days after the end of each fiscal year; and (c) consolidated financial stat ements for any period Third Eye had a subsidiary whose accounts were consolidated with those of Third Eye. The Agreement additionally required Third Ey e to permit UST, subject to applicable laws and regulatory approvals, to visit an d inspect Third Eye’s books of account and records during Third Eye’s normal business hours. Third Eye was not required to provide access to information it reasonably considered to be a trade secret or confidential unless it was covered by an enforceable confidentiality agreement acceptable to Third Eye. On October 13, 2020, UST sent a dema nd letter to Third Eye requesting Third Eye make various books and records ava ilable for inspection and copying. In support of the request, US T cited the Agreement and section 21.218 of the Texas Business Organizations Code. UST stat ed it was making the request “for the–3– purposes of evaluating Third Eye’s fina ncial position and understanding Third Eye’s operations and practices, so that UST Glob al can monitor and protect the value of UST Global’s equity in Third Eye.” Third Eye responded one month later declining to produce records that exceeded “the permissible scope of Sect ion 21.218 records requests.” Third Eye further stated that, due to the fact the companies were involved in an arbitration proceeding, it was declining to produce any records unless appropriate measures were put in place to “protect confiden tiality and limit disse mination of sensitive company information.” UST replied that its rights to inform ation under the Agreement were broader than those under section 21.218, and it had never been provided the financial disclosures it was contractually entitled to receive. UST noted that its desire to evaluate Third Eye’s financial position to de termine the value of its equity interest was particularly compelling given recent communications indicating Third Eye may be insolvent. UST stated it was “amenable to reasonable confidentiality protections for the requested documents” and requested that Third Eye provide it with proposed measures within a week. The record contains no response to UST’s request for proposed confidentiality protections, and Third Eye did not allow UST to access its books and records. UST brought this suit in March 2021 alle ging a claim for brea ch of contract and requesting a writ of manda mus. UST asserted that Third Eye had never provided–4– any of the information required by the Agreement and requested specific performance of the Information Rights pr ovision, as well as a writ of mandamus ordering Third Eye to provide UST with ac cess to its books and records. UST further sought an award of attorn ey’s fees and costs. A trial was conducted befo re the court without a jury. Vijay Padmanbhan, chief corporate officer and head of the in vestment committee for UST, testified that UST never received any of the documents Th ird Eye was required to deliver pursuant to the Information Rights provision. He further testified th e company had never been allowed to inspect Third Eye’s books and records. Shouvik Bhattacharyya, f ounder and chief executive officer of Third Eye, testified that, for a period of time he pr epared quarterly and yearly financial statements with the help of an accountant, and filed tax returns on behalf of Third Eye. He stated he used QuickBooks to prepare balance sheets and profit and loss statements and had an elect ronic folder of accounting and finance matters. With respect to informing UST about Third Eye’ s financial performa nce, he said he provided informal updates by email from December 2015 to 2017. According to Bhattacharyya, UST employees provided the data used to create the financial statements. Padmanbhan denied that UST employees prepared financial information for Third Eye. Beginning in 2017, Bhattacharyya st ated UST employees began creating separate companies and taki ng Third Eye’s business. He said UST mentioned there–5– were “rogue employees” and he believed those employees were using Third Eye’s confidential information. Bhattacharyya also believed UST had breached a master service agreement between the two companies, and it was this claim that was the subject of the arbitration proceeding. The arbitration proceeding was still in process when UST sent the demand letter requesting access to Third Eye’s books and records. Bhattacharyya testified he refused to comply with the demand because he was trying to “protect the company.” He further stated that all documents responsive to UST’s demand had been turned over in discovery. In suppor t of this assertion, Third Eye submitted a one-page summary showing various categorie s of Third Eye’s income and expenses for the period of January 2014 through Ma y 2021. Bhattacharyya stated he had records of the payroll, rent, and other e xpenses reflected in the document, but he believed those records were “not the books and records requested by UST.” After hearing the evidence, the tria l court found “UST had a proper purpose for demanding to examine and copy Third Eye’s books, records of account, minutes, and share transfer records; and Third Eye did not permit, and s till refuses to permit, UST to access, examine, a nd copy its books, records of account, minutes, and share transfer records.” Accordingly, the judg ment ordered Third Eye to permit UST to examine its books and records at Third Eye’ s offices. The trial court additionally found UST was entitled to specific performan ce on its breach-of-contract claim, and ordered Third Eye to produce the documents required to be delivered under the–6– Information Rights provision of the Agreemen t. Finally, the trial court awarded UST its attorney’s fees. Analysis In its first two issues, Third Eye contends the evidence is factually insufficient to support the trial court’s judgment. To evaluate a f actual sufficiency challenge, we consider and weigh all the evidence presented. Dow Chem. Co. v. Francis , 46 S.W.3d 237, 242 (Tex. 2001) (per curiam). We can set aside a ve rdict only if the evidence supporting it is so weak, or the findings so against the great weight and preponderance of the evidence, that it is clearly wrong and unjust. Id . We must not substitute our judgment for that of the f actfinder, and should remain cognizant that the factfinder is the sole judge of witness credibility. Golden Eagle Archery, Inc. v. Jackson , 116 S.W.3d 757, 761 (Tex. 2003). Third Eye’s primary challenge is to th e trial court’s finding that UST had a proper purpose in requesting to inspect Th ird Eye’s books and records. An improper purpose is a defense to a books-and-records request. T EX

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. § 21.222(b)(4). To show an improper purpose, the part y invoking the defense must establish by proof “a state of facts sufficien t to convince the court the stockholder is not seeking the information which might be revealed by the desired inspection for the protection of his interest as a stockholder, or that of the corporation, but that he is actuated by corrupt or unlawful motives.” Moore v. Rock Creek Oil Corp. , 59 S.W.2d 815, 818 (Tex. 1933).–7– Third Eye argues it presented unrebutte d evidence of its concern that UST would take the information obtained through the inspection and us e it to harm Third Eye. As facts supporting this concern, Third Eye points to Bhattacharyya’s testimony that UST was misappr opriating Third Eye’s info rmation and assets. But Bhattacharyya specifically testified that UST employees were st arting new, separate companies and taking Third Eye’s business. There was no evidence that UST, itself, was seeking to harm the company in which it had invested. See Moore , 59 S.W.2d at 819 (wholly incredible that stockholders made demand to depre ss market value of their own stock). Indeed, UST stated it wa s willing to work with Third Eye to put in place reasonable confidentiality protec tions for Third Eye’s information. Third Eye additionally points to the fact that the parties were involved in an arbitration proceeding, and the inspec tion request “stemmed from information obtained during all the arbitration procedures .” The information to which Third Eye refers concerned the company’s potential insolvency. Third Eye does not explain why the fact that UST learned of Thir d Eye’s potential insolvency during an arbitration proceeding renders its concer n about the company as a shareholder improper. Nor does Third Eye explain ho w information obtained through a booksand-records inspection would have been ha rmful to Third Eye in the arbitration instituted to resolve a master service ag reement dispute. Th e mere fact that stockholders seeking access to a compan y’s books and records are on unfriendly terms with the company is not a ground for denying mandamus relief. Id . at 818.–8– Third Eye cites several cases for the pr oposition that its concerns regarding UST’s potential misuse of its financial in formation should have compelled the trial court to deny UST’s request. In those cas es, however, the court did not hold the company’s alleged concerns we re conclusive, but rather were sufficient to raise a fact issue on whether the shareholder ha d a proper purpose for requesting the inspection. See Uvalde Rock Asphalt Co. v. Loughridge , 425 S.W.2d 818, 820–21 (Tex. 1968) (orig. proceeding); In re Elusive Holdings, Inc. , 641 S.W.3d 498, 504 (Tex. App.—Austin 2021, orig. proceeding); In re Dyer Custom Installation, Inc. , 133 S.W.3d 878, 883 (Tex. App.—Dallas 2004, orig. proceeding); Guar. Old Line Life Co. v. McCallum , 97 S.W.2d 966, 968 (Tex. App.—Dallas 1936, orig. proceeding). Here, the fact issue was pres ented to the trial c ourt for resolution. Given (1) UST’s undisputed evidence that Third Eye never provided it with the financial information it was contractually obligated to deliver, (2) UST’s stated concern regarding its investment in Thir d Eye, and (3) Third Eye’s own evidence that it began losing substantial business be ginning in 2017, we conclude the evidence was factually sufficient to support the tria l court’s conclusion that UST had a proper purpose in requesting to inspect Th ird Eye’s books and records. With respect to the trial court’s or der that Third Eye produce documents, Third Eye argues the evidence shows it al ready produced all the documents in its possession. But the evidence regarding wh at information had been given to UST was conflicting, and the court was free to disbelieve Bhattacharyya’s testimony that–9– Third Eye was not withholding information. Golden Eagle , 116 S.W.3d at 761. Bhattacharyya conceded that, even though he had prepared quarterly and yearly financial statements for Third Eye, he never provided them to UST as required by the Agreement. Instead, Bh attacharyya stated he gave UST informal reports via emails. This alone is sufficient evidence to support the trial court’s finding that Third Eye was in breach of the Agreement. Although Bha ttacharyya also stated that employees of UST provided the financ ial information on which Third Eye’s financial disclosures would have been based, Padmanba hn disputed this and said UST’s employees never prepared fina ncial information for Third Eye. Third Eye submitted only a single, one-p age document into evidence to support its assertion that it had turned over all the requis ite financial information in its possession to UST. The document wa s a summary created by Bhattacharyya for the arbitration proceeding to show Third Eye’s profits and losses over a seven-year period. Bhattacharyya stated he had in his possession the underlying records to support the information in the summary, but indicated these documents were not given to UST because he believed that they were not responsive to UST’s booksand-records request. But Third Eye provide d no evidence to show the records would not be part of the information it was re quired to deliver under the Agreement. Furthermore, Bhattacharyya stated he had some of Third Eye’s financial information on his computer in a file called “accounti ng and finance matters.” Bhattacharyya did not specify what types of documents were in the computer file, and the trial court–10– could have concluded that at least some of that information would fall under the disclosure requirements of the Agreement. Finally, Third Eye argues the mandamu s relief awarded to UST is overly broad. Third Eye argues that section 21. 218(b) of the Texas Bu siness Organizations Code limits the right to inspect a compan y’s books and records to only those books and records relating to the stated purpose for the inspection. See T EX

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. C ODE A NN . § 21.218(b). Because the trial cour t’s judgment does not limit the books and records Third Eye must make availabl e, Third Eye contends the relief awarded exceeds the relief to wh ich UST was entitled. UST’s stated purpose for its request to examine Third Eye’s books and records was to determine Third Eye’s financial soundness and monitor the value of UST’s investment. Third Eye fails to identify any books or records that would not relate to this broad purpose, and we may presume th e trial court conclude d that all the books and records in Third Eye’s possession were properly within the scope of what UST was entitled to examine. See Pulley v. Milberger , 198 S.W.3d 418, 427 (Tex. App.— Dallas 2006, pet. denied) (we presume tria l court made all fi ndings to support judgment). Third Eye further argues the trial cour t’s order requiring it to make its books and records available for inspection at its offices is not supported by either section 21.218 or UST’s pleadings. The Agreement states, however, that Third Eye must allow UST to “visit and inspect Third Eye’ s properties, [and] examine its books of–11– account and records, during normal busine ss hours of [Third Eye] . . . .” UST referenced this provision in its petition. Nothing in section 21.218 prevents a trial court from ordering that a books-and-records inspection take place at the subject company’s offices. See T EX

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. C ODE A NN . § 21.218. Accordingly, we conclude the trial court’s judgment is not erroneously overbroad or unsupported by the pleadings. We resolve Third Ey e’s first two issues against it. Because of our resolution of the first tw o issues, it is unnecessary for us to address Third Eye’s remaining i ssue concerning attorney’s fees. We affirm the trial court’s judgment.

220334F.P05 /Amanda L. Reichek / AMANDA L. REICHEK JUSTICE–12– 

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Court of Appeals Fifth District of Texas at Dallas JUDGMENT THIRD EYE, INC., Appellant

No. 05-22-00334-CV V. UST GLOBAL INC., Appellee On Appeal from the 101st Judicial District Court, Dallas County, Texas Trial Court Cause No. DC-21-02821. Opinion delivered by Justice Reichek. Justices Nowell and Garcia participating. In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED

. It is ORDERED that appellee UST GLOBAL INC. recover its costs of this appeal from appellant THIRD EYE, INC.
Judgment entered May 4, 2023