Court Opinion

ID: 4040858
Source: CourtListenerOpinion
Date Created: 2016-09-28 22:39:15.882101+00
Date Added: 2024-06-11T14:02:58.070227
License: Public Domain

ACCEPTED
                                                                                03-14-00087-CV
                                                                                        3761677
                                                                      THIRD COURT OF APPEALS
                                                                                 AUSTIN, TEXAS
                                                                          1/14/2015 10:28:19 AM
                                                                               JEFFREY D. KYLE
                                                                                          CLERK
                     NO. 03-14-00087-CV
                                                               FILED IN
           In the Third Court of Appeals                3rd COURT OF APPEALS
                                                             AUSTIN, TEXAS

                  Austin, Texas                         1/14/2015 10:28:19 AM
                                                            JEFFREY D. KYLE
                                                                 Clerk

          _______________________________________

                  Edwin Kiest Norton III,
                                                  Appellant,
                                     v.

                   Mary Michelle Cheney,
                                                Appellee.
          _______________________________________

    ORAL ARGUMENT DEMONSTRATIVES
          _______________________________________

David F. Minton                           Lisa Bowlin Hobbs
 State Bar No. 14192300                     State Bar No. 24026905
Zooey Wharton                             Kurt Kuhn
 State Bar No. 24008264                     State Bar No. 24002433
Minton, Burton, Bassett & Collins,        KUHN HOBBS PLLC
P.C.                                      3307 Northland Drive, Suite 310
1100 Guadalupe                            Austin, Texas 78731
Austin, Texas 78701                       (512) 476-6003
(512) 476-4873                            (512) 476-6002 (fax)
(512) 479-8315 (fax)                      Lisa@KuhnHobbs.com
                                          Kurt@KuhnHobbs.com

                      COUNSEL FOR APPELLEE
                                    ORAL ARGUMENT DEMONSTRATIVES
Appendix 1. ................................................................................................................. Timeline

Appendix 2 ..............................................................County Line Enterprises Stock Ledger

Appendix 3 .............Demonstrative of Norton’s County Line Enterprises Stock Shares

Appendix 4 ............................ Trial Court’s Valuation of County Line Enterprises Stock

                                                                  2
Dated: January 14, 2015                          Respectfully submitted,

                                                 /s/Lisa Bowlin Hobbs
  David F. Minton                                 Lisa Bowlin Hobbs
   State Bar No. 14192300                           State Bar No. 24026905
  Zooey Wharton                                   Kurt Kuhn
   State Bar No. 24008264                           State Bar No. 24002433
  Minton, Burton, Bassett & Collins, P.C.         KUHN HOBBS PLLC
  1100 Guadalupe                                  3307 Northland Drive, Suite 310
  Austin, Texas 78701                             Austin, Texas 78731
  (512) 476-4873                                  (512) 476-6003
  (512) 479-8315 (fax)                            (512) 476-6002 (fax)
                                                  Lisa@KuhnHobbs.com
                                                  Kurt@KuhnHobbs.com

                                COUNSEL FOR APPELLEE

                              CERTIFICATE OF SERVICE
        I hereby certify that on January 14, 2015, I served a copy of this Brief of Appellee
on counsel of record electronically, in accordance with the Court’s rules on electronic
filing, as listed below:

Nathan Kennedy                                          via e-Service
1607 Nueces Street
Austin, Texas 78701
nkennedy@nathankennedylaw.com

John T. Beliveau                                        via e-Service
Law Office of John T. Beliveau
100 Rocky River Road
Blanco, Texas 78606
jtbeliveaulaw@gmail.com

                                                 /s/ Lisa Bowlin Hobbs
                                                 Lisa Bowlin Hobbs

                                             3
APPENDIX 1
                  TIMELINE OF KEY TRANSACTIONS

                                                                       Walcutt dies.
                                Ricky Goss                             His shares are
                                 shares are                            purchased by
                               purchased by                            Concepts and
                                 CLE and                              redistributed as
                                 retired as                            a partnership
CLE formed.                   treasury stock.                           distribution.
   1988                           1992                                    2006

                  1990                                1995                                   2010
               Norton &                         May: Rocky Goss                           Randy Goss
              Cheney marry.                          shares are                           dies. As with
                                                purchased by CLE                             Walcutt
                                                   and retired as                          transaction,
                                                  treasury stock.                        his shares are
                                                                                         purchased by
                                                                                         Concepts and
                                                     December:                            redistriubted
                                                 Concepts formed.                        as partnership
                                                  It is undisputed                        distribution.
                                                 that Concepts is a
                                                community interest
                                                    partnership.

             Norton and Cheney were married in 1990.

             Concepts, a community interest partnership, was formed in 1995.

             Concepts distributed 90,152 shares of CLE stock to Norton in 2006.

             Concepts distributed 12,251 shares of CLE stock to Norton in 2010.

             Norton acquired a total of 102,403 shares of CLE stock during his marriage to
              Cheney from these two distributions.

             There is no evidence in the record that Norton acquired these shares before his
              marriage to Cheney.
APPENDIX 2
         ,\"'
                                                          The County Line Enterprises, Inc.
                                                                   Stock Ledger

•     .Cert.
       No.

           1
           2
             Date Issued

                     01/02/89
                     01/02/89
                     01/02/89
                                       Person:or Entity

                                      Bruce D. Walcutt
                                       Richard L. Goss
                                                             #of Shar.es· Shares
                                                               Issued

                                                               105,918
                                                               105,918
                                                               105,916
                                                                         ..
                                                                            O/S

                                                                               0
                                                                               0
                                                                               0
                                                                                           Date
                                                                                        ·Cancelled

                                                                                         10/16/06
                                                                                         05/18/92
                                                                                         03/14/89
                                                                                                     ·Replace-··
                                                                                                        ment
                                                                                                       Share#

                                                                                                         34
                                                                                                         25
                                                                                                       21,22
                                                                                                                   Ref.
                                                                                                                 Comments.

                                                                                                                   1, 13
                                                                                                                    1,5
                                                                                                                     1
           3                         Edwin K. Norton Ill
           4         01/02/89          Rocky L. Goss            40,816         0         05/18/95       31          1,9
           5         01/02/89           Don A. Miller           20,708      20,708                                   1
           6         01/02/89        Benjamin A. Collins        20,479         0         11/29/94       NIA         1,8
           7         01/02/89          Randy J. Goss             8,145         0         10/01/10        38        1,14
           8         01/02/89          Adrienne Milloy          4,100         0          06/28/95        32        1, 10
           9         01/02/89         Bruce D. Walcutt          26,270        0          03/04/89      ·17,20       1,2
          10         01/02/89          Richard L. Goss          26,270        0          03/04/89       18,20       1,2
      ·. ·11         01/02/89        Edwin K. Norton !II        26, 180       0          03/04/89       19,20       1,2
          12         01/02/89          Rocky L. Goss            10,090        0          05/18/95        31         1,9
          13         01/02/89           Don A. Miller            5,050      5,050                                    1
          :14.       01/02/89        Benjamin A. Collins         5,120        0          11/29/94       N/A         1,8
          15         01/02/89          Randy J. Goss            2,020         0          10/01/10        38        1, 14
          16         01/02/89          Adrienne Milloy           1,000        0          06/28/95        32        1, 10
         '17         03/04/89         Bruce D. Walcutt          17,724        ·o         10/16/06        34        2, 13
         ·18 · .     03/04/89          Richard L. Goss          17,724         0         05/18/92        25         2,5
        ..19         03/04/89        Edwin K. Norton Iii        17,634         0         03/31/89      23,24        2,4
         20          03/04/89         John Blazier-Agnt        25,638          0         01/14/93     26,27,28      2,6
       .. 21         03/14/89        Edwin K. Norton Ill        86,458         0         03/31/89      23,24         3
         22          03/14/89        Edwin K. Norton Ill        19,458         0         03/31/89      23,24         3

•     . 27
          23
         "24
          25
          26

         .28
                     03/31/89
                     03/31/89
                     05/18/92
                     01/14/93
                     01/14/93
                     01/14/93
                                     Edwin K. Norton Ill
                                     Edwin K. Norton Ill
                                          CLE, Inc.
                                      Bruce D. Walcutt
                                     Edwin K. Norton If I
                                          CLE, Inc.
                                                                24,710
                                                                98,840
                                                               123,642
                                                                 8,546
                                                                 8,546
                                                                 8,546
                                                                            24,110
                                                                            98,840
                                                                               0
                                                                               0
                                                                             8,546
                                                                               0
                                                                                         03/01/94
                                                                                         10/16/06
                                                                                                       29, 30
                                                                                                         34
                                                                                                                     4
                                                                                                                     4
                                                                                                                    5,7
                                                                                                                     6
                                                                                                                     6
                                                                                                                     6
      ::·29          03/01/94             Don A. Miller         18,500      18,500                                   7
     ·. 30           03/01/94              CLE, Inc.           105,142         0                                     7
      . 31           06/15/95              CLE, Inc.            50,906         0                                     9
      ..32           06/28/95         Adrienne Milloy           5,100          0        06/28/95        N/A       10, 11
       ·33.          07/01/95          Don A. Miller            7,138          0        10/15/10         41       12, 15
        34           10/16/06              CLC                 132,188         0        11/09/06      35,36,37      13
       .35           11/09/06        Edwin K, Norton Ill       90,1?2       90, 152                                 13
        36           11/09/06          Don A. Miller           35,162       35,162                                  13
        37           11/09/06         Randy J. Goss             6,874          0        10/01/10        38          13
        38           10/01/10              CLC                 17,039          0        10/01/10       39,40        14
           39        10/01/10        Edwin K. Norton Ill       12,251       12,251                                  14
          40         10/01/10          Don A. Miller            4,788       4,788                                   14
          41         10/15/10          Don A. Miller            7,138       7, 138      01/01/00                    15
     -
                                     Edwin K. Norton Ill                   234,499
     -          ,.
                                  ----Goo-A~                              -94:.:" ·-
                                                                              .~   ·~

                                               Total                       325,845

•   G:ICLIENTSICL 0317\CLE\Stock Ledger 2010

                                                       . ··--·----       --------
                  THE COUNTY LINE ENTERPRISES, INC~
                 STOCK LEDGER REFERENCE COMMENTS

•
    1.   Initial Stock Distribution by The County Line Enterprises, Inc. ("CLE")

    2.   Bruce Walcutt, Richard Goss and Edwin Norton surrendered 8,546 Shares each
         (Certificate Nos. 9, 10, and 11 were cancelled and Certificate Nos. 17, 18, and 19
         were issued) for a total of 25,638 Shares which were issued to John C. Blazier,
         Escrow Agent as Share Certificate No. 20 for Don IVJ.iller to acquire (Certificate
         No. 29 I 18,500 Shares and Certificate No. 33 I 7,138 Shares).

    3.   Ed-win Norton - Equal exchange of Shares. Certificate No. 3 I 105,916 Shares
         was cancelled. Certificate No. 21 I 86,458 Shares and Certificate No. 22 I 19,458
         Shares (Total of 105,916 Shares) were issued.

    4.   Edwin Norton - Reissue of Shares to allow a division of the existing Shares into
         two Certificates for pledging of 98,840 Shares to Alliance Bank to secure existing

•
         debt. Certificate No. 19 I 17,634 Shares, Certificate No. 21 I 86,458 Shares, and
         Certificate 22 I 19,458 Shares (Total of 123,550 Shares) were .cancelled.
         Certificate No. 23 I 24,710 Shares· and Certificate No. 24 I 98,840 Shares (Total
         of 123,550 Shares) were issued.

    5.   CLE purchased Richard Goss' 123,642 Shares (Certificate No. 2 I 105,918 Shares
         and Certificate No. 18 I 17, 724 Shares were cancelled) as Treasury Stock.
         Certificate No. 25 (123,642 Shares) was issued to CLE on 5/18/92. Outstanding
         Shares were reduced from 514,000 Shares to 390,358 Shares (514,000 - 123,642
         = 390,358).

    6.   John C. Blazier, Escrow Agent transaction (see Comment No. 2 above) was
         terminated. Certificate No. 20 I 25,638 Shares was cancelled. Certificate No. 26
         I 8,546 Shares was issued to Bruce Walcutt. Certificate No. 27 I 8,546 Shares
         was issued to Ed~ Norton. Certificate No. 28 I 8,546 Shares was issued to CLE
         as Treasury Stock. Outstanding Shares were reduced from 390,358 to 381,812
         Shares (390,358 - 8,546 = 381,812).

    7.   Don Miller acquired 18,500 Shares (Certificate N9. 29 I 18,500 Shares) from

•
         CLE Treasury Stock. Certificate No. 25 I 123,642 Shares was cancelled.
                   THE COUNTY LINE ENTERPRISES, INC.
                  STOCK LEDGER REFERENCE COMMENTS

•         Certificate No. 30 I 105,142 Shares was issued to CLE. Outstanding Shares were
          increased from 381,812 to 400,312 Shares (381,812 + 18,500 = 400,312).

    8.    CLE purchased Benjamin Collins' 25,599 Shares (Certificate No. 6 I 20,479
          Shares and Certificate No. 14 I 5,120 Shares were cancelled) as Treasury Stock.
          No new Share Certificates were issued tq CLE. Outstanding Shares were reduced
                                                                                 /
          from 400,312 Shares to 374, 713 Shares ( 400,312 - 25,599 = 374, 713).

    9.    CLE purchased Rocky Goss' 50,906 Shares (Certificate No. 4 I 40,816 Shares
          and Certificate No. 12 I 10,090 Shares were cancelled) as Treasury Stock.
          Certificate No. 31 I 50,906 Shares "was issued to CLE on 6/15/95. Outstanding
          Shares were reduced from 374,713 Shares to 323,807 Shares (374,713 - 50,906 =
          323,807).

    10.   Adrienne Millay's Original Share Ce1iificate No. 8 I 4,100 Shares and No. 16 I

•
          1,000 Shares (Total of 5,100 Shares) were deemed to be lost. Therefore,
          Certificate Nos. 8 and 16 were cancelled and replaced by Share Certificate No. 32
          I 5, 100 -Shares.

    11.   CLE purchased Adrienne Millay's 5,100 Shares (Ce1iificate No. 32 I 5,100
          Shares was. cancelled) as Treasury Stock. No new Share Certificates were issued
          to CLE. Outstanding Shares were reduced from 323,807 to 318,707 Shares
          (323,807 - 5,100 = 318,707).

    12.   Don Miller acquired 7,138 Shares (Ce1iificate No. 33 I 7,138 Shares) from CLE
          Treasury Stock. Outstanding Shares were increased from 318, 707 Shares to
          325,845 Shares. (318,707 + 7,138 = 325,845).
     ,, .
    1:J. The County Line Concepts, Ltd. ("CLC") I CLE purchased Bruce Walcutt's
          132,188 Shares (Certificate No. 1 I 105,918 Shares and Certificate l'qo. 17 I
          17, 724 Shares and Certificate No. 26 I 8,546 Shares were cancelled) and
          redistributed said Shares prQraJ._a_t.o_the_remaining Sbar.ehol.de~~
          34 I 132,188 Shares-was issued to CLC and then cancelled. Certificate No. 35 I
          90,152 Shares was issued to Edwin Norton. Certificate No. 36 I 35,162 Shares

•
                   - - - - - - - - · - - - - - · --· --·
'.

                                          THE COUNTY LINE ENTERPRISES, INC.
                                         STOCK LEDGER REFERENCE COMMENTS

•                   was issued to Don Miller. Certificate No. 37 I 6,874 Shares was issued to Randy
                    Goss. Outstanding Shares remained constant at 325,845 Shares.

     14.            CLC I CLE purchased Randy Goss' 17,039 Shares (Certificate No. 7 I 8,145
                    Shares, Certificate No. 15 I 2,020 Shares and Certificate No. 37 I 6,874 Shares)
                    and redistributed said Shares prorata to the remaining Shareholders. Certificate
                    No. 38 I 17,039 Shares was issued to CLC and then cancelled... Certificate No. 39
                    I 12,251 Shares was issued to Edwin Norton. Certificate No. 40 I 4,788 Shares
                    was issued to Don Miller. Outstanding Shares remained constant to 325,845
                    Shares.

     15.            Don Miller's Original Share Certificate No. 33/ 7,138 Shares was deemed to be
                    lost. Therefore, Certificate No. 33 was cancelled and replaced by Share
                    Certificate No. 41/ 7,138 Shares .

•    g:lclicntslcl 0317\clclstock.lodgcr.lO IO.doc

 •
APPENDIX 3
                                                                                  514,000        25.7%

       3.        3/4/89        11       c        -        26,180          -              -         -
       4.    I   3/4/89        19       I   17,634             -    123,550       514,000        24.0%

       5.        3/14/89        3       c        -       105,91~1                                        I Equal exchange of Shares (105,916 Shares
       6.        3/14/89       21       I   86,458                                                 -         for 105,916 Shares).
       7.        3/14/89       22       I   19,458             -I   123.550   I   514 .000   I   24.0%
       8.        3/31/89       19       c        -        17,634
       9.        3/31/89       21       c        -        86,458          -              -         -         Reissue EN Shares to allow a division of the
                                                                                                             existing Shares into iwo Certificates for
       10.       3/31/89       22       c        -        19,458          -              -         -         pledging of 98,840 Shares to Alliance Bank to
       11.       3/31/89       23       I   24,710             -          -              -         -         secure existing debt.
::>'
       12.       3/31/89   I   24       I   98,840             -    123,550       514,000        24.0%

   I             5/18/92   j· -                  -                  123.550 I                    31.7%
       13.                              -                      -1                 390,358

       14.                                   8,546                  132,096       381,812        34.6%
                 1/14/93       27

       15.       3/1/94        -        -        -             .,   132,0961      400,3121       33.0%

       16.   111/29/94         -        -
                                                               -I   132,0961      374,7131       35.3%

       17.   I   5/23/95   I   -        -        -T            T    132,0961      323,8071       40.8%

       18.       6/28/95            I   -        -I            -I   132,0961      318,7071       41.5%

       19.       7/1/95                 -        -I            -I   132,096       325,845 I      40.5%

       20 . I 11/9/06 · I      35       I   90,152   I         -I   222,248       325,8451       68.2%
                                                                                                         I redistributed said Shares pn
                                                                                                             Shareholders.
                                                                                                             CLC I CLE purchased Randy

       21.   I 10/1/10     I   39   I   I   12,251   I         -I   234,499   I   325,845    I   72.0%   I   Sl1ares (Certificate Nos. 7, 15 & 37) and
                                                                                                             redistributed said Shares prorata to remaining
APPENDIX 4
             Price per share in CLE corporate documents = $45.82
                 No contractual provision for discounting price
                         Cheney’s Expert   Norton’s Expert     Trial Court
Overall Price Per Share      $45.82            $40.97            $40.97
Marketability Discount        15%               45%               25%
Lack of Control Discount       0%               35%               N/A
Total Price Per Share        $38.67            $14.65            $30.73