Court Opinion

ID: 4073544
Source: CourtListenerOpinion
Date Created: 2016-09-30 04:06:01.250812+00
Date Added: 2024-06-11T14:32:51.889933
License: Public Domain

ACCEPTED
                                                                             01-15-00680-CV
                                                                  FIRST COURT OF APPEALS
                                                                          HOUSTON, TEXAS
                                                                       11/16/2015 1:30:28 PM
                                                                       CHRISTOPHER PRINE
                                                                                      CLERK

№. 01-15-00680-CV                                    FILED IN
                                              1st COURT OF APPEALS
                                                  HOUSTON, TEXAS
                                              11/16/2015 1:30:28 PM
 ________________________________________________________
                          IN THE              CHRISTOPHER A. PRINE
                                                       Clerk
                    COURT OF APPEALS
                         FOR THE
                 FIRST COURT OF APPEALS
                   AT HOUSTON, TEXAS
 _________________________________________________________
   ESP RESOURCES, INC. f/k/a PANTERA PETROLEUM, INC.,
                         Appellant,

                                 v.

                   BWC MANAGEMENT, INC.,
                         Appellee.

   On Appeal from the 113th Judicial District Court in Harris County
                 Trial Court Case №. 2013-25068
___________________________________________________________

                    APPELLEE’S BRIEF
__________________________________________________________

                    TIMOTHY J. HENDERSON
                  6300 West Loop South, Suite 280
                     Bellaire, Texas 77401-2905
                            713.667.7878
                         713.668.5697 (fax)
                      timjhenderson@msn.com

                    COUNSEL FOR APPELLEE

                        November 16, 2015
                       (a) Identity of Parties and Counsel
      For ESP Resources, Inc. f/k/a Pantera Petroleum, Inc. (“ESP”), Appellant:

                               David A. Fettner, Esq.
                                FETTNER THOMPSON
                              6700 Sands Point Drive
                               Houston, Texas 77074
                                   713.626.7277
                                  1.888.876.2292
                            daf@fettnerthompson.com
                          services@fettnerthompson.com

                                        and

                              Joshua D. Brinen, Esq.
                           BRINEN & ASSOCIATES, LLC
                            7 Dey Street, Suite 1503
                           New York, New York 10007
                                  1.212.330.8151
                               1.212.227.0201 (fax)
                             jbrinen@brinenlaw.com

      For BWC Management, Inc. (“BWC”), Appellee:

                             Timothy J. Henderson
                        6300 West Loop South, Suite 280
                          Bellaire, Texas 77401-2905
                                 713.667.7878
                              713.668.5697 (fax)
                           timjhenderson@msn.com

      The Reporter’s Record of the Trial proceeding will be referenced by the

abbreviation “RR” followed by the name of the witness, if pertinent, the volume, the

page and the line numbers, or if an exhibit, “RR” followed by the volume and the
                                 _______________
                                      Page ii
page number(s), the trial exhibit number, a document description. There are 7

volumes in the Reporter’s Record.

      The official Trial Court Clerk’s Record will be referenced by the abbreviation

“CR” followed by identification of which of the Clerk’s Records is being referenced,

if necessary, and then to the cited page numbers. There is 1 Volume of the Clerk’s

Records.

                                 _______________
                                     Page iii
                                (b) Table of Contents
(a) Identity of Parties and Counsel                     ii

(b) Table of Contents                                   iv
(c) Index of Authorities                                 v
(d) Statement of the Case                                1

(e) Statement of Jurisdiction                            2

(f) Issues Presented                                     3
(g) Statement of Facts                                   4

(h) Summary of the Argument                              6
(i) Argument                                             7

      A. Admission of Evidence:                          7
      B. Exclusion of Evidence:                         12

      C. Legal and Factual Insufficiency Points:        15
(j) Prayer                                              19

NOTICE OF ELECTRONIC FILING                             20

CERTIFICATE OF SERVICE                                  20
CERTIFICATE OF COMPLIANCE                               21

                                   _______________
                                        Page iv
                                            (c) Index of Authorities

Cases

4M Linen & Uniform Supply Co. v. W.P. Ballard & Co.,
 793 S.W.2d 320 (Tex. App.-Houston [1st Dist.] 1990, writ denied) .............. 12, 13

Barnhart v. Morales,
  459 S.W.3d 733 (Tex. App. – Houston [14th Dist.] March 5, 2015,
  no. pet) ................................................................................................................8, 9

Bay Area Healthcare Grp., Ltd. v. McShane,
  239 S.W.3d 231 (Tex. 2007) ................................................................................10
Bowie Memorial Hosp. v. Wright,
  79 S.W.3d 48 (Tex. 2002) ....................................................................................11
Caffe Ribs, Inc. v. State,
 328 S.W.3d 919 (Tex. App. – Houston [14th Dist.] 2010, no pet.) ......................11

Cain v. Bain,
 709 S.W.2d 175 (Tex. 1986) ................................................................................16

Cappuccitti v. Gulf Indus. Products, Inc.,
 222 S.W.3d 468 (Tex. App. – Houston [1st Dist.] 2007, no pet.) ........................18

City of Brownsville v. Alvarado,
  897 S.W.2d 750 (Tex. 1995) ................................................................................10

City of Keller v. Wilson,
  168 S.W.3d 802 (Tex. 2005) ................................................................................16

COC Services, Ltd. v. CompUSA, Inc.,
 150 S.W.3d 654 (Tex. App. – Dallas 2004, pet. denied) .....................................18

Dillard Dep’t Stores, Inc. v. Hall,
  909 S.W.2d 491 (Tex. 1995) ................................................................................15

                                                   _______________
                                                        Page v
Gee v. Liberty Mut. Fire Ins. Co.,
 765 S.W.2d 394 (Tex. 1989) ................................................................................10

GTE Mobilnet of S. Tex. v. Pascouet,
 61 S.W.3d 599 (Tex. App. – Houston [14th Dist.] 2001, pet. denied) .................16

GTE Southwest, Inc. v. Bruce,
 998 S.W.2d 605 (Tex. 1999) ..................................................................................8

Holloway v. Skinner,
 898 S.W.2d 793 (Tex.1995) .................................................................................18

Hooper v. Chittaluru,
 222 S.W.3d 103 (Tex. App. – Houston [14th Dist.] 2006, pet.
 denied) (op. on reh’g) ...........................................................................................11
In re E.A.K.,
  192 S.W.3d 133 (Tex. App. – Houston [14th Dist.] 2006, pet. denied) ..................9

Interstate Northborough Partnership v. State,
  66 S.W.3d 213 (Tex. 2001) ..................................................................................11
K Mart Corp. v. Sanderson,
  937 S.W.2d 429 (Tex. 1996) ................................................................................15

Ludlow v. DeBerry,
  959 S.W.2d 265 (Tex. App.-Houston [14th Dist.] 1997, no pet.) ..........................13

Maritime Overseas Corp. v. Ellis,
 971 S.W.2d 402 (Tex. 1998) ................................................................................16

PGP Gas Prods., Inc. v. Fariss,
 620 S.W.2d 559 (Tex. 1981) .................................................................................13

Pool v. Ford Motor Co.,
  715 S.W.2d 629 (Tex. 1986) ................................................................................16

Prestige Ford. Co. v. Gilmore,
  56 S.W.3d 73 (Tex. App. – Houston [14th Dist.] 2001, pet. denied)....................11

                                               _______________
                                                    Page vi
Texaco, Inc. v. Sanderson,
  898 S.W.2d 813 (Tex. 1995) ................................................................................15

Wade v. Commission for Lawyer Discipline,
 961 S.W.2d 366 (Tex. App.-Houston [1st Dist.] 1997, no pet.) ............................12

Walker v. Anderson,
 232 S.W. 899 (Tex. App. – Dallas 2007, no pet.) ................................................18

Statutes

TEX. R. APP. P. §25.1(b).............................................................................................2

Rules

Tex. R. App. P. 33.1(a)(1)(A)-(B) ............................................................................14

TEX. R. EVID. 103(a) ................................................................................................12
Tex. R. Evid. 103(a)(2) ............................................................................................14

Tex. R. Evid. 103(b) .................................................................................................12
TEX. R. EVID. 401 .....................................................................................................15

Tex. R. Evid. 803(6) .................................................................................................10
Tex. R. Evid. 902(10) .................................................................................................9

                                                _______________
                                                    Page vii
                           (d) Statement of the Case
      This is a suit on 3 Promissory Notes (RR, Volume 4, Pages 3-8). The case

was tried to a jury which rendered a verdict on March 31, 2015 (CR, Vol. 1, Pages

146-157). The Court granted a Judgment on the verdict on May 8, 2015 (CR, Vol.

1, Pages 165-167). ESP filed a notice of appeal (CR, Vol. 2, Pages 264-265).

                                 _______________
                                      Page 1
                         (e) Statement of Jurisdiction
      The Appellate Court has jurisdiction of the District Court Appeal. TEX. R.

APP. P. §25.1(b).

                                _______________
                                     Page 2
                                (f) Issues Presented
      ISSUE 1: Admission of Evidence – The trial court did not abuse its discretion

in admitting relevant evidence offered by Appellee.

      ISSUE 2: Exclusion of Evidence – The trial court did not abuse its discretion

in excluding evidence offered by Appellant on unrelated issues.

      ISSUE 3:      Legal and Factual Insufficiency Points –The evidence was

sufficient to support the jury’s findings.

                                   _______________
                                        Page 3
                                 (g) Statement of Facts
       On September 30, 2007, BWC loaned Pantera Petroleum, Inc. (“Pantera”),

now ESP, as borrower, $73,006.00 documented by a promissory note signed by

Pantera (the “73K Note”). (RR, Vol. 2, Page 36, Line 6 to Page 37, Line 3). The

73K Note was due on September 30, 2012. (RR, Vol. 4, Pages 3-4 {π Ex. 1}).

       On July 30, 2008, BWC loaned Pantera $100,000 documented by a

promissory note signed by Pantera (the “100K Note”). (RR, Vol. 2, Page 28, Lines

11-24). The 100K Note was due on July 22, 2013. (RR, Vol. 4, Pages 5-6 {π Ex.

2}).

       On or about August 29, 2008, BWC loaned Pantera another $100,000.00

documented by a promissory note signed by Pantera (the “Second 100K Note”)1.

(RR, Vol. 2, Page 39, Lines 10-19). The Second 100K Note was also due on July

22, 2013. (RR, Vol. 4, Page 7-8 {π Ex. 3}).

       In addition to the exhibits, the president and sole shareholder of BWC, Jenny

Crichton, addressed the funding of the 3 Promissory Notes (RR, Vol. 2, Page 31,

1
       Jointly, the 73K Note, the 100K Note and the Second 100K Note will be referred to as the
       “3 Promissory Notes”.
                                      _______________
                                            Page 4
Lines 15-20). Ms. Crichton testified that all 3 Promissory Notes were funded (RR,

Vol. 2, Page 40, Lines 1-24).

      In December 2008, Pantera entered into an agreement with ESP Resources,

Inc., a Delaware corporation, whereby Pantera acquired 100% ownership of ESP.

Pantera changed its name to “ESP Resources, Inc.” (RR, David Dugas, Vol. 2, Page

126, Line 6 to Page 127, Line 20 and RR, Vol 6, Page 77 {π Ex. 7}, ESP Form 10-

K {12-31-2013}). ESP is publicly traded under the symbol “ESPI.” (RR, Vol. 6,

Page 77 {π Ex. 7}, ESP Form 10-K {12-31-2013}).

      ESP recognized the $273,000 from the 3 Promissory Notes as “notes payable”

with “interest at 5 percent per annum and are due between September 30, 2012 and

July 22, 2013” in several ESP’s audited Securities and Exchange Commission

(“SEC”) public filings which the officers certifies were true and accurate. See (i)

RR, Vol 4, Page 74 {π Ex. 7}, ESP Form 10-K {12-31-2013}; (ii) RR, Vol 7, Page

63 {∆ Ex. 14}, ESP Form 10-K {12-31-2008}; and (iii) RR, Vol. 8, Page 72 {∆ Ex.

1}, ESP Form 10-K {12-31-2009}.

      ESP/Pantera’s own accountants, BDO Canada LLP (“BDO”), confirmed after

audit, as publically reported by ESP, the receipt of the funds. (RR, Vol 4, Pages 11-

22 {∆ Ex. 6}, BDO Business Records). The BDO business records in the case at

                                  _______________
                                       Page 5
bar, which include an affidavit from Lynn Watt and the document produced by BDO,

pursuant to a Letter Rogatory issued in this case, demonstrate that the 3 Promissory

Notes were fully funded. (RR, Vol. 4, Page 11-22 {π Ex. 6}, BDO Business

Records).

      According to ESP’s auditors BDO, the $73,006.90 of the 73K Note was

received on October 1, 2007. (RR, Vol 4, Page 13 {π Ex. 6}, BDO Business

Records). The $100,000.00 of the 100K Note was wired into Pantera’ account on

August 11, 2008. (RR, Vol 4, Page 20 {π Ex. 6}, BDO Business Records). The

$100,000.00 of the Second 100K Note was wired into Pantera’ account on August

29, 2008. (RR, Vol 4, Page 20 {π Ex. 6}, BDO Business Records).

                         (h) Summary of the Argument
      BWC lent ESP $273,006.00 documented by 3 Promissory Notes. The 3

Promissory Notes were in default and were due. ESP did not pay the 3 Promissory

Notes.

      At trial, BWC provided evidence of the 3 Promissory Notes, the funding of

the 3 Promissory Notes, the default and the amount due. As such the Final Judgment

and Order on the verdict should be affirmed.

                                 _______________
                                      Page 6
                                  (i) Argument
A. Admission of Evidence:

      Plaintiff Exhibits 4 and 5 are proof that money (corresponding exactly to the

amount in the $100K Note and the Second $100K Note that ESP signed) was

transferred to ESP. (RR {π Ex. 4 &6}, Vol. 4, Pages 9-10).

      The president and sole shareholder of BWC, Jenny Crichton testified that

Exhibits 4 and 5 were written confirmation to her that the loan money had been

funded. ESP, through its president David Dugas, admitted ESP did get the money

(as a long term debt). (RR, Vol 2, Page 41, Lines 3 to Page 42, Line 2 and RR, Vol

2, Page 148, Lines 2-22). Previously, Ms. Crichton testified that all 3 Promissory

Notes were funded (RR, Vol. 2, Page 40, Lines 1-24). ESP, through its president

David Dugas, admitted and disclosed in public filings that ESP got the money from

the loans. See RR, Vol 4, Page 74 {π Ex. 7}, ESP Form 10-K {12-31-2013}.

Furthermore, Exhibits 4 and 5 are also cumulated to the evidence from ESP own

accounting firm, contained in Exhibit 6 (discussed below) that confirmed that the

$100K Note and the Second $100K Note were funded.

      While no error was committed, certainly the admissions of Exhibits 4 and 5

did not cause an improper judgment. Exhibits 2 and 3 {the $100K Note and the

Second $100K Note} came into evidence without objection. Exhibit 7, ESP’s own

                                 _______________
                                      Page 7
SEC 10-K filing showing the long term obligations of the $100K Note and the

Second $100K Note, came into evidence without objection. See, Reporter’s Record,

Vol. 3, pg.7, Lines 1-8. On the basis of these 3 documents alone, the jury could have

rendered the exact same judgment.

      Therefore, the district court’s admission of Exhibits 4 and 5 would have been

harmless. When erroneously admitted evidence is cumulative, the error is harmless.

GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605, 615 (Tex. 1999).

      Exhibit 6 was a business record affidavit from ESP own auditors obtained by

a letter rogatory early in discovery in this case. The Exhibit was offered as, and with,

a business records affidavit. (RR, Vol. 2, Page 100, Line 8 to Page 101, Line 13).

      The major issue here seems to be handwritten notes on the auditors’ forms.

Barnhart v. Morales, 459 S.W.3d 733 (Tex. App. – Houston [14th Dist.] March 5,

2015, no. pet) addressed this very issue.

      In Barnhart, Barnhart complained about the trial court’s admission of

Barnhart’s Memorial Hermann Hospital emergency room medical records, without

redacting the handwritten notes that hospital staff made on preprinted hospital forms

while treating Barnhart. The challenged handwritten notes include comments that

Barnhart appeared intoxicated, was uncooperative, and had to be restrained by

hospital staff in order to be treated for her injuries. In Barnhart’s view, these

                                   _______________
                                        Page 8
handwritten notes are hearsay within hearsay and inadmissible because there is no

indication who wrote the notes or whether they had personal knowledge of the event

or condition, rendering the notes untrustworthy. The Barnhart Court disagreed,

writing:

           “Rule 803(6) of the Texas Rules of Evidence creates an exception to the
           hearsay rule for

                 A memorandum, report, record, or data compilation, in any form,
                 of acts, events, conditions, opinions, or diagnoses, made at or
                 near the time by, or from information transmitted by, a person
                 with knowledge, if kept in the course of regularly conducted
                 business activity, and if it was the regular practice of that
                 business activity to make the memorandum, report, record, or
                 data compilation, all as shown by the testimony of the custodian
                 or other qualified witness, or by affidavit that complies with Rule
                 902(10)....

           The challenged handwritten notes are found within medical records that
           were accompanied by an affidavit prepared by the custodian of records
           for Memorial Hermann Hospital in compliance with Rule 902(10). See
           Tex. R. Evid. 902(10). The custodian’s affidavit provided that all 34
           pages of records contained in Plaintiff’s Exhibit 18 were business
           records of Memorial Hermann Hospital that were kept in the regular
           course of the hospital’s business and that the records were made by an
           employee, representative, or a physician on the hospital’s medical staff
           who had personal knowledge of the act, event, or condition being
           recorded. There is no requirement that the custodian preparing the
           affidavit be the creator of the records or have personal knowledge of
           the information recorded in the document but only knowledge of how
           the records were prepared. In re E.A.K., 192 S.W.3d 133, 142 (Tex.
           App. – Houston [14th Dist.] 2006, pet. denied).

           As Rule 803(6) makes clear, the hearsay exception applies to all
           business records regardless of their form. See Tex. R. Evid. 803(6).
                                   _______________
                                        Page 9
         The fact that some parts of the challenged records were handwritten
         notes on preprinted forms designed to be filled in by the hospital’s staff
         while evaluating and treating emergency room patients does not take
         them outside of the business records hearsay exception.... Here, the
         challenged records, along with the business records affidavit, establish
         that the handwritten notes were made by Memorial Hermann Hospital
         staff while treating Barnhart in the emergency room. Barnhart has not
         shown that the handwritten nature of these notes renders them
         untrustworthy. We therefore conclude the trial court did not abuse its
         discretion when it overruled Barnhart’s hearsay within hearsay
         objection and admitted Plaintiff's Exhibit 18 without redacting the
         handwritten notes.”

Barnhart at 743-44.

      Moreover, there was no reversible harm because the jury had before it other

evidence of the funding via the testimony of Ms. Crichton (RR, Vol. 2, Page 40,

Lines 1-24). See TEX. R. APP. P. 44.1(a).

      The admission or exclusion of evidence rests within the sound discretion of

the trial court. City of Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995)

and Bay Area Healthcare Grp., Ltd. v. McShane, 239 S.W.3d 231, 234 (Tex. 2007).

To obtain reversal of a judgment based on error of the trial court in admission or

exclusion of evidence, the following must be shown: (1) the trial court did in fact

commit error, and (2) that the error was reasonably calculated to cause and probably

did cause rendition of an improper judgment. Gee v. Liberty Mut. Fire Ins. Co., 765
S.W.2d 394, 396 (Tex. 1989).

      When reviewing matters committed to the trial court’s discretion, a reviewing
                                  _______________
                                      Page 10
court may not substitute its own judgment for that of the trial court. Bowie Memorial

Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex. 2002). Thus, the question is not whether

this Court would have admitted the evidence. Rather, an appellate court should

uphold the trial court’s evidentiary ruling if there is any legitimate basis for the

ruling, even if that ground was not raised in the trial court. Hooper v. Chittaluru,

222 S.W.3d 103, 107 (Tex. App. – Houston [14th Dist.] 2006, pet. denied) (op. on

reh’g).

      A party seeking to reverse a judgment based on evidentiary error must prove

that the error probably resulted in rendition of an improper judgment, which usually

requires the complaining party to show that the judgment turns on the particular

evidence excluded or admitted. Prestige Ford. Co. v. Gilmore, 56 S.W.3d 73, 78

(Tex. App. – Houston [14th Dist.] 2001, pet. denied).        To determine whether

excluded evidence probably resulted in the rendition of an improper judgment, an

appellate court reviews the entire record. Caffe Ribs, Inc. v. State, 328 S.W.3d 919,

927 (Tex. App. – Houston [14th Dist.] 2010, no pet.) (citing Interstate Northborough

Partnership v. State, 66 S.W.3d 213, 220 (Tex. 2001)).

      While no error was committed, certainly the admission of exhibit 6 did not

cause an improper judgment. Exhibits 1 {the $73K Notes} came into evidence

without objection. Exhibit 7, ESP’s own SEC 10-K filing showing the long term

                                  _______________
                                      Page 11
obligations of the $73K Note, came into evidence without objection. See, Reporter’s

Record, Vol. 3, pg.7, Lines 1-8. On the basis of these 2 documents alone, the jury

could have rendered the exact same judgment.

B. Exclusion of Evidence:

      ESP did not preserve error on any exclusion of evidence matter

      Texas recognizes two types of offers to preserve error: the offer of proof

(formerly referred to as an informal bill of exception) and the formal bill of

exception. See TEX. R. EVID. 103(a), (b); TEX. R. APP. P. 33.2; 4M Linen & Uniform

Supply Co. v. W.P. Ballard & Co., 793 S.W.2d 320, 323 (Tex. App.-Houston [1st

Dist.] 1990, writ denied). To challenge exclusion of evidence by the trial court on

appeal, the complaining party must present the excluded evidence to the trial court

by offer of proof. Wade v. Commission for Lawyer Discipline, 961 S.W.2d 366, 374

(Tex. App.-Houston [1st Dist.] 1997, no pet.).

      Texas Rule of Evidence 103(b) provide “(b) Record of Offer and Ruling. The

offering party shall, as soon as practicable, but before the court’s charge is read to

the jury, be allowed to make, in the absence of the jury, its offer of proof.”

      An offer of proof preserves error for appeal if

      (1) it is made before the court, the court reporter, and opposing counsel,

outside the presence of the jury;

                                    _______________
                                        Page 12
      (2) it is preserved in the reporter’s record; and

      (3) it is made before the charge is read to the jury. See, 4M Linen & Uniform

Supply Co. at 323 (construing requirements of offer of proof under former rule 52(b)

of the Rules of Appellate Procedure).

      ESP did not submit the evidence excluded by offer of proof before the court’s

charge was read to the jury. The offer of proof serves primarily to enable the

reviewing court to assess whether excluding the evidence was erroneous and, if so,

whether the error was harmful. See Ludlow v. DeBerry, 959 S.W.2d 265, 270 (Tex.

App.-Houston [14th Dist.] 1997, no pet.). The offer of proof also allows the trial

court to reconsider its ruling in light of the evidence contained in the bill. Id and

PGP Gas Prods., Inc. v. Fariss, 620 S.W.2d 559, 560 (Tex. 1981) (stating rationales

underlying preservation-of-error requirement).

      Appellants appear to rely on a pretrial and trial discussions with the trial court

when the trial court ruled the Appellants could not adduce testimony or evidence on

concerning the unrelated SEC investigation. Rule 33 of the Rules of Appellate

Procedure governs preservation of error. Rule 33.1(a)(1)(A)-(B) states as follows:

      33.1 Preservation; How Shown

      (a) In General. As a prerequisite to presenting a complaint for appellate

review, the record must show that:

                                   _______________
                                       Page 13
      (1) the complaint was made to the trial court by a timely request, objection, or

motion that:

      (A) stated the grounds for the ruling that the complaining party sought from

the trial court with sufficient specificity to make the trial court aware of the

complaint, unless the specific grounds were apparent from the context; and

      (B) complied with the requirements of the Texas Rules of Civil or Criminal

Evidence or the Texas Rules of Civil or Appellate Procedure; and Tex. R. App. P.

33.1(a)(1)(A)-(B) (underscored emphasis added); see also Tex. R. Evid. 103(a)(2)

(“In case the ruling is one excluding evidence, the substance of the evidence was

made known to the court by offer, or was apparent from the context within which

questions were asked.”).

      The Appellants did not offer the written exhibits or ask any questions as

contemplated by rule 103(a)(2) of the Rules of Evidence.

      In any event, the unrelated SEC litigation involving Mr. Christopher Metcalf

and Mr. Bob Vukavich was irrelevant. The investigation did not tend to make one

issues in the case on the 3 Notes more likely or not. The Court, being generous on

the relevancy point, still noted that “...the prejudicial value of that [the SEC litigation

involving Metcalf and Vukavich] so outweighs the probative value.” (Reporters

Record, Vol. 3, Page 131, Lines 3-12). Further the Court noted that it was not

                                    _______________
                                        Page 14
important in a note case for the jury to know that the SEC sued Mr. Christopher

Metcalfe for manipulating stock prices. (Reporters Record, Vol. 3, Page 109, Lines

15-17).

      There is not a hint of impropriety in the transaction in the case at bar. ESP

signed 3 Notes, got all the money it borrowed, and has not paid BWC the money

back. Nothing about any other completely unrelated transactions involving BWC,

its president, or its president’s former husband even whiffs of relevance in this case.

Mr. Bob Vukovich’s actions or inactions, if any, would not lead to any evidence

having any tendency to make the existence, the amount and the non-repayment of

the 3 Notes more or less likely. TEX. R. EVID. 401. See K Mart Corp. v. Sanderson,

937 S.W.2d 429, 431 (Tex. 1996); Dillard Dep’t Stores, Inc. v. Hall, 909 S.W.2d
491, 492 (Tex. 1995); Texaco, Inc. v. Sanderson, 898 S.W.2d 813, 815 (Tex. 1995).

C. Legal and Factual Insufficiency Points:
      When reviewing the legal sufficiency of the evidence, the Court should

consider the evidence in the light most favorable to the challenged finding and

indulge every reasonable inference that would support it. City of Keller v. Wilson,

168 S.W.3d 802, 823 (Tex. 2005). The Court must credit favorable evidence if a

reasonable factfinder could – and – disregard contrary evidence unless a reasonable

factfinder could not. See id. at 827. The Court must determine whether the evidence

                                   _______________
                                       Page 15
at trial would enable reasonable and fair-minded people to find the facts at issue. Id.

The factfinder is the only judge of witness credibility and the weight to give to

testimony. See id. at 819.

      When reviewing a challenge to the factual sufficiency of the evidence, the

Court should examine the entire record, considering both the evidence in favor of,

and contrary to, the challenged finding. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.

1986). After considering and weighing all the evidence, the Court can set aside the

fact finding only if it is so contrary to the overwhelming weight of the evidence as

to be clearly wrong and unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.

1986). The trier of fact is the sole judge of the credibility of the witnesses and the

weight to be given to their testimony. GTE Mobilnet of S. Tex. v. Pascouet, 61
S.W.3d 599, 615-16 (Tex. App. – Houston [14th Dist.] 2001, pet. denied). The Court

may not substitute its judgment for that of the trier of fact, even if the Court would

reach a different answer on the evidence. Maritime Overseas Corp. v. Ellis, 971
S.W.2d 402, 407 (Tex. 1998). The amount of evidence necessary to affirm a

judgment is far less than that necessary to reverse a judgment. Pascouet, 61 S.W.3d

at 616.

      ESP suggested an issue that the money it received as equity money, not a loan

based on the notes it signed (despite its own SEC filings to the contrary). But other

                                   _______________
                                       Page 16
than raise the specter of the ‘equity’ issue, ESP proved nothing. No stock was issued

(to FTS Financial) by ESP and Mr. Dugas did not issue any shares (RR, Vol. 2, Page

108, Lines 4-17). Such ‘proof’ of the issuance of ESP equity for a cash infusion

should have been easy for ESP to establish – if true.

      Appellee asserts that Ms. Crichton concede the loan was equity. Nothing

could be further from the truth. The entire sequence of questions between counsel

for Appellee and Ms. Crichton was based on a separate unrelated agreement when

as follows:

         Q. FTS is a company that, you're saying, actually loaned the money to
         Pantera, correct?
         A. Yes.
         Q. I’m sorry?
         A. Yes.
         Q. Okay. Now, Mr. Henderson asked you earlier do you know the
         difference between debt and equity. And I believe you said that if they had
         a certificate, it would be equity. Correct?
         A. Yes.
         Q. And if you -- if Pantera got equity from FTS -- or sold equity to FTS,
         they wouldn't be required to pay it back, would they?
         A. No, not the equity. (RR, Vol. 2, Page 56, Lines 6-19).

      ESP’s President Mr. Dugas provided no evidence of the issuance of shares to

FTS (RR, Vol. 3, Page 108, Lines 15-17) and Mr. Dugas listed the money as loans

in the SEC public filings which he certified were true and accurate. See, e.g., RR,

                                  _______________
                                      Page 17
Vol 4, Page 74 {π Ex. 7}, ESP Form 10-K {12-31-2013} and RR, Vol 7, Page 63

{∆ Ex. 14}, ESP Form 10-K {12-31-2008}.

      There is certainly nothing unjust about requiring a publically traded company

to pay 3 Notes which its own President signed. As noted in the Court’s Charge, “A

company is deemed to act through the actions and statements, if any, made by or for

the benefit of the company by its officers and authorized representatives.” There

were no objections to the Court’s Charge. See, Reporter’s Record, Vol. 3, pg.4,

Lines 2-8.

      As noted in Walker v. Anderson, 232 S.W. 899, 918 (Tex. App. – Dallas 2007,

no pet.): “The acts of a corporate agent on behalf of the principal are ordinarily

deemed to be the corporation’s acts. Holloway v. Skinner, 898 S.W.2d 793, 795

(Tex.1995); COC Services, Ltd. v. CompUSA, Inc., 150 S.W.3d 654, 675 (Tex. App.

– Dallas 2004, pet. denied). The individual employee or officer who acts for a

corporation is that corporation’s agent. See Cappuccitti v. Gulf Indus. Products,

Inc., 222 S.W.3d 468, 485 (Tex. App. – Houston [1st Dist.] 2007, no pet.).”

      Ms. Crichton testified that she had BWC coordinate with a third party to

provide ESP the money in connection with the 3 Notes, see, e.g., Reporters Record,

Vol. 3, Page 39, Lines 2-5 {as to Note 1}; Reporters Record, Vol. 3, Page 44, Lines

2-12 {as to Notes 2 and 3}.

                                 _______________
                                     Page 18
      Furthermore, Ms. Crichton confirmed that the money for the 3 Notes was

funded by speaking with both the party that paid the money and the party (ESP) that

got the money. Reporters Record, Vol. 3, Page 41, Lines 17-24.

                                   (j) Prayer
      THEREFORE, BWC requests that the Court AFFIRM the Final Judgment and

Order of the District Court.

      Respectfully submitted this 16th day of November 2015.

                                      By:
                                        Timothy J. Henderson
                                        State Bar No. 09432500
                                        6300 West Loop South, Suite 280
                                        Bellaire, Texas 77401-2905
                                        713.667.7878
                                        713.668.5697 (fax)
                                        timjhenderson@msn.com

                                      COUNSEL FOR PLAINTIFF/APPELLEE,
                                      BWC MANAGEMENT, INC.

OF COUNSEL:

David Loev, Esq.
State Bar No. 24002490
6300 West Loop South, Suite 280
Bellaire, Texas 77401-2905
713.524.4110
713.524.4122. (fax)
dloev@loevlaw.com

                                 _______________
                                     Page 19
                      NOTICE OF ELECTRONIC FILING
       I, Timothy J. Henderson, Attorney for Appellee BWC, certify that I have
electronically submitted the foregoing brief for filing in accordance with the
Electronic File and Serve System for the First Court of Appeals on November 16th
2015.

                                           Timothy J. Henderson

                          CERTIFICATE OF SERVICE
       This is to certify that a true and correct copy of the above pleading was served
by United States Certified Mail, return receipt requested, postage prepaid, and/or by
fax and/or by hand delivery and/or electronically through the electronic filing
manager and/or by email by upon all persons or counsel at the address(es) below on
the 16th day of November 2015:

David A. Fettner, Esq.
FETTNER THOMPSON
6700 Sands Point Drive
Houston, Texas 77074
713.626.7277
1.888.876.2292 (fax)
daf@fettnerthompson.com

Joshua D. Brinen, Esq.
BRINEN & ASSOCIATES, LLC
7 Dey Street, Suite 1503
New York, New York 10007
1.212.330.8151 and 1.212.227.0201 (fax)
jbrinen@brinenlaw.com

COUNSEL FOR DEFENDANT/APPELLANT
ESP RESOURCES, INC., f/k/a PANTERA PETROLEUM, INC.

                                           Timothy J. Henderson
                                   _______________
                                       Page 20
                      CERTIFICATE OF COMPLIANCE
       Pursuant to TEX. R. APP. P. 9.4(i)(3), undersigned counsel certifies that this
brief complies with the type-volume limitations.

1.    Exclusive of the portions exempted by TEX. R. APP. P. 9.4(i)(3), this brief
      contains 4846 words printed in a proportionally spaced typeface. (In the
      alternative, for briefs prepared in monospaced typeface, you may certify the
      number of lines of text used).

2.    This brief is printed in a proportionally spaced typeface using Times New
      Roman 14 point font in text and Times New Roman 12 point font in footnotes
      produced by Word software.

3.    Upon request, undersigned counsel will provide an electronic version of this
      brief and/or a copy of the word printout to the Court.

4.    Undersigned counsel understands that a material misrepresentation in
      completing this certificate, or circumvention of the type-volume limits, may
      result in the Court’s striking this brief and imposing sanctions against the
      person who signed it.

                                          Timothy J. Henderson

                                  _______________
                                      Page 21