Filed - Supreme Court of Texas

NO. 12-0454 

IN THE SUPREME COURT OF TEXAS 

IN RE ROBERT L. AND JULIA T. McCULLOUGH 

Original Proceeding from the 

416 th District Court, Collin County, Texas 

and from the Fifth Court of Appeals, Dallas, Texas 

Trial Cause No. 416-02008-2009 

Appellate Court Cause No. 05-11-01303-CV 

REAL PARTIES IN INTEREST SCARBROUGH MEDLIN & ASSOCIATES, INC. 

AND SCARBROUGH, MEDLIN & ASSOCIATES FINANCIAL SERVICES, INC.’S 

RESPONSE TO AMENDED EMERGENCY MOTION FOR TEMPORARY RELIEF 

Leland C. de la Garza 

State Bar No. 05646600 

Brian P. Shaw 


Shackelford, Melton & McKinley, LLP 

3333 Lee Parkway, Tenth Floor 

Dallas, Texas 75231 

Telephone: (214) 780-1400 

Facsimile: (214) 780-1401 

ldelagarza@shacklaw.net 

bshaw@shacklaw.net 

COUNSEL FOR REAL PARTIES IN INTEREST

TO THE HONORABLE JUSTICES OF THE TEXAS SUPREME COURT: 

Real Parties in Interest Scarbrough, Medlin & Associates, Inc. and Scarbrough, 

Medlin & Associates Financial Services, Inc. (collectively “SMA”) oppose Relators' 

Amended Emergency Motion for Temporary Relief (the “Amended Motion”), and in 

support of their opposition show as follows: 

I. SUMMARY OF RESPONSE 

The McCulloughs did not show that temporary relief is necessary to preserve 

their rights or is just under the circumstances, the standard by which this Court must 

evaluate their request. The McCulloughs did not show that they cannot preserve their 

right to supersede the judgment by posting the additional $209,000.00 in security 

required by the trial court. The trial court and the Fifth Court of Appeals both already 

concluded that the McCulloughs would not suffer substantial economic harm if 

required to post the additional security. The Court should deny the Amended Motion. 

II. FACTUAL BACKGROUND 1 

A. Proceedings in the Trial Court 

On August 16, 2011, the McCulloughs filed affidavits of net worth with the trial 

court. The affidavits showed a net worth of $325,600.00. In arriving at their net worth, 

the McCulloughs included $365,000.00 of the $1.2 million judgment liability and two 

amounts for taxes, $35,000.00 and $18,000.00. The McCulloughs deposited $162,800.00 

with the clerk of the court in lieu of a supersedeas bond, representing 50% of the 

McCulloughs’ claimed net worth. 

1 The facts stated in this Factual Background section and elsewhere are supported by the attachments 

hereto and the verification of SMA’s counsel at the end of this Response. 

1

SMA contested the McCullough’s claimed net worth. The McCulloughs then 

filed a Motion for Reduction of Cash Deposit. After evidentiary hearings held in 

November 2011, the trial court entered an Order on Supersedeas Bond on December 16, 

2011, which removed the disputed judgment and tax liabilities from the McCulloughs’ 

net worth and required the McCulloughs to post additional security of $209,000.00. The 

Court also denied the McCulloughs’ request for a reduction in the cash deposit. 

B. Proceedings in the Dallas Court of Appeals 

The McCulloughs appealed the trial court’s supersedeas rulings by motion 

pursuant to TEX. R. APP. P. 24.4. On March 13, 2012, the Dallas Court of Appeals denied 

the McCulloughs’ appeal. McCullough v. Scarbrough, Medlin & Assoc., 362 S.W.3d 847 

(Tex. App. – Dallas 2012, orig. proceeding). While the appeal was pending, twice the 

McCulloughs asked the Court of Appeals for a stay of the judgment and twice their 

requests were denied. 2 

C. The Garnishment Lawsuit 

After the trial court set the supersedeas bond at $371,800.00, and the 

McCulloughs failed to timely post the required security, on January 20, 2012, SMA filed 

a garnishment lawsuit, Cause No. 416-00247-2012, Scarbrough, Medlin & Associates, Inc. 

and Scarbrough, Medlin & Associates Financial Services, Inc. v. Bank of America, N.A., 

Cullen/Frost Bankers, Inc., Credit Union of Texas, Capital One Bank, N.A., ING Bank, FSB 

d/b/a ING Direct USA, Willie Nell Thompson, and Andrea Stroh Thompson, District Clerk of 

Collin County, Texas. On February 3, 2012, the Collin County District Clerk answered 

2 The Dallas Court of Appeals entered orders denying the McCulloughs’ requests for stay of enforcement 

on January 19, 2012, and February 7, 2012. See Exhibits1 and 2 to the attached Affidavit of Brian P. Shaw. 

2

the garnishment lawsuit admitting that she held $162,800.00 deposited in connection 

with the case styled Scarbrough, Medlin & Associates, Inc., et al. v. Robert L. McCullough, et 

al., Cause No. 416-02008-2009. 

On March 5, 2012, the McCulloughs filed a Motion to Dissolve or Modify the 

Writs of Garnishment and a Request for Ex Parte Temporary Restraining Order and 

Writ of Injunction and a Motion for Substitution of Property in the garnishment lawsuit. 

The McCulloughs requested that the trial court enjoin an execution sale of a 

condominium owned by the McCulloughs that was scheduled for March 6, 2012, and to 

permit them to substitute a meager cash deposit they claimed represented the equity in 

the condominium. On March 5, 2012, the trial court granted a Temporary Restraining 

Order restraining the sale of a condominium owned by the McCulloughs and scheduled 

a temporary injunction hearing on March 19, 2012. The trial court held a hearing on 

March 19, 2012, and on May 7, 2012, the trial court entered an Order (the “Garnishment 

Order”) 3 denying the McCulloughs’ motions and granting SMA’s Motion to Release 

Funds Held in Registry of the Court. The trial court found that the Collin County 

District Clerk held $162,800.00 belonging to the McCulloughs and ordered the Clerk to 

distribute the funds to SMA to be applied to the underlying judgment. 

On May 4, 2012, the McCulloughs’ lawyer, Cary Jay Cross, filed a petition in 

intervention asserting that he loaned $72,800.00 of the $162,800.00 supersedeas cash 

deposit and he wanted his money back. SMA moved to strike Cross’ intervention and 

on May 14, 2012, the trial court struck Cross’ intervention. 

3 See Exhibit 3 to the attached Affidavit of Brian P. Shaw. 

3

III. 

ARGUMENT & AUTHORITIES 

The McCulloughs request from this Court last-minute emergency relief to stay 

the Garnishment Order (ordering the Collin County District Clerk to deliver $162,800.00 

to SMA), stay the sale of their condominium (which was scheduled for June 5, 2012), 

and stay any further enforcement proceedings on the judgment “until such time as this 

Court has the ability to fully consider and rule upon Realtor’s (sic) Petition for Writ of 

Mandamus.” Amended Motion, 3. The Texas Rules of Appellate Procedure provide 

two bases for discretionary temporary relief: 

 

Tex. R. App. P. 24.4(c) authorizes the Court to issue temporary orders 

“necessary to preserve the parties’ rights.” 

 

Tex. R. App. P. 52.10(b) authorizes the Court to grant “just relief” pending the 

court’s action on the petition. 

The McCulloughs are not entitled to temporary relief because a stay is not necessary to 

preserve the parties’ rights and a stay is not just under the circumstances of this case. 

A. A stay is not necessary to preserve a right held by the McCulloughs. 

TEX. R. APP. P. 24 does not provide an automatic stay of enforcement once a 

supersedeas bond Order is appealed. Rather, Rule 24 gives the appellate court 

discretion to issue “any temporary orders necessary to preserve the parties’ rights.” In 

the context of a money judgment, Rule 24 gives a judgment debtor the right to 

supersede collection of the judgment by posting security in the amount required by the 

trial court. If the judgment debtor does not post the required security, he does not have 

4

the right to supersede enforcement. Thus, the right protected by Rule 24 is the right to 

supersede the judgment. 

A stay is not necessary to preserve the McCulloughs’ right to supersede the 

judgment because the McCulloughs failed to show that they cannot post security of 

$371,800.00. Since they already posted security of $162,800.00, the McCulloughs had the 

ability to supersede the judgment by posting an additional $209,000.00. The trial court 

found that the McCulloughs have sufficient unencumbered cash or other assets on hand 

to be able to post a bond or cash deposit for an additional $209,000.00, including 

between $51,000.00 and $64,154.00 in cash, $312,900.00 in retirement accounts, and 

$100,000.00 in personal effects and jewelry. 4 The trial court also found that it is not 

likely the McCulloughs will suffer substantial economic harm if required to post a 

supersedeas bond of $371,800.00. 5 These evidentiary findings are not subject to factual 

sufficiency review by the Texas Supreme Court. See In re Ron Smith, 192 S.W.3d 564, 568 

n. 3 (Tex. 2006). If the McCulloughs had posted the full $371,800.00 security, the 

judgment would be superseded, all enforcement action would stop, and their assets, 

including the supersedeas deposit, would be protected from seizure. Therefore, a stay 

of the judgment is not necessary to protect the McCulloughs’ right to supersede the 

judgment. 

The present status quo is the McCulloughs are judgment debtors owing over $1.2 

million dollars, the McCulloughs failed to post the security required by the trial court 

4 Order on Supersedeas Bond, 21. While a copy of this Order is attached as Exhibit B to the Appendix 

to the McCulloughs’ Petition for Writ of Mandamus, a copy of the Order is attached hereto for convenient 

reference as Exhibit 4. 

5 Order on Supersedeas Bond, 19. 

5

and, as a result, the judgment is not superseded, and SMA successfully garnished 

$162,800.00 held by the Collin County District Clerk belonging to the McCulloughs. A 

stay of enforcement will not preserve a right presently held by the McCulloughs; rather, 

it will harm SMA’s existing right to enforce the judgment. 

B. There is no immediate threat of a sale of the condominium. 

As reflected in the McCulloughs’ Amended Motion, the execution sale of the 

condominium previously scheduled for June 5, 2012, was cancelled and will be 

rescheduled in the future. Right now, the condominium is not scheduled for sale. As a 

result, a stay order with respect to the condominium is unnecessary. 

C. A stay does not provide “just relief.” 

The McCulloughs have the right to bring this mandamus proceeding, but they 

do not have an automatic right to a stay of enforcement of the judgment while their 

mandamus proceeding is pending. Instead, this Court may grant “any just relief” 

pending the Court’s action on the mandamus petition. TEX. R. APP. P. 52(b). SMA did 

not find any guiding principles in Texas on what constitutes “just relief” under Rule 52. 

But in evaluating the request for a stay, SMA believes this Court should consider 

whether the relief is necessary, the history of this proceeding, and the likelihood that 

the McCulloughs will be successful in this mandamus proceeding. The lack of necessity 

for temporary relief was discussed above. The McCulloughs’ history of delay and their 

lack of likelihood of success on the merits are discussed below. 

6

As reflected in the docket sheets of the trial court in the underlying lawsuit, the 

related garnishment action, and the Dallas Court of Appeals, 6 the McCulloughs have 

engaged in serial dilatory tactics in order to delay SMA’s enforcement of its judgment. 

SMA obtained a favorable jury verdict in April 2011, and then a judgment in July 2011. 

SMA’s contest of the McCulloughs’ net worth was resolved in SMA’s favor in 

December 2011, after numerous hearings. The McCulloughs then unsuccessfully 

appealed the trial court’s supersedeas ruling to the Dallas Court of Appeals and twice 

unsuccessfully sought a stay of enforcement of the judgment under TEX. R. APP. P. 

24.4(c). 7 Thereafter, the McCulloughs obtained an ex parte temporary restraining order 

in the garnishment action enjoining the sale of the condominium, but their request for a 

continuing temporary injunction was denied. 8 The McCulloughs unsuccessfully moved 

to dissolve the writs of garnishment issued in the garnishment proceeding, including 

the garnishment of the Collin County District Clerk. Ultimately, after an evidentiary 

hearing, the trial court ordered the funds held by the clerk to be turned over to SMA. 9 

Then, one of the McCulloughs’ attorneys, Cary Jay Cross, intervened in the garnishment 

action asserting a claim to part of the $162,800.00 supersedeas deposit, but on motion 

from SMA, the trial court struck the intervention. More than a year after trial concluded 

in favor of SMA, and after countless legal proceedings, most of which were caused by 

the McCulloughs’ delay tactics, SMA has yet to collect one dime on its judgment. 

6 Copies of the docket sheets are attached as Exhibits 6, 7, and 8 to the attached Affidavit of Brian P. Shaw. 

7 See Exhibits 1 and 2 to the attached Affidavit of Brian P. Shaw. 

8 See Exhibits 3 to the attached Affidavit of Brian P. Shaw. 


7

On June 6, 2012, the McCulloughs filed “Appellants Emergency Motion to Stay 

Garnishment Order and Release of Funds” with the Dallas Court of Appeals in 

connection with the McCulloughs’ attempt to appeal from the Garnishment Order. The 

McCulloughs’ request for stay was denied within a few hours of its filing. 10 This new 

filing, and the Dallas Court of Appeals’ swift denial of the request, is further proof the 

dilatory pattern engaged in by the McCulloughs. 

The history shown above demonstrates a pattern of delay intended to prevent 

SMA from ever recovering on its judgment. This mandamus proceeding represents just 

another arrow in the McCulloughs’ quiver of delay tactics. 

As for the likelihood of success on the merits, the Court has before it the opinion 

of the Dallas Court of Appeals denying the McCulloughs’ appeal from the Order on 

Supersedeas Bond. A copy of the response SMA filed with the Dallas Court of Appeals 

is attached to this Response. 11 The opinion and SMA’s brief demonstrate that the 

McCulloughs are not likely to prevail in this mandamus proceeding. 

The trial court’s Order on Supersedeas Bond contains detailed findings of fact 

and conclusions of law which support its decision to set the supersedeas security at 

$371,800.00. The primary issue was whether the McCulloughs could use part of the 

judgment on appeal as a liability in their calculation of net worth and whether certain 

they could similarly include tax liabilities. The trial court found that the judgment was 

a contingent liability, not a current liability, and concluded that such liability should be 

excluded from the net worth calculation under Anderton v. Cawley, 326 S.W.3d 725 (Tex. 



8

App. – Dallas 2010, pet. denied). 12 The trial court also concluded that the judgment is 

not a probable liability the amount of which can be reasonably estimated applying 

applicable accounting standards. 13 The trial court concluded the tax liabilities are not 

current tax liabilities and are not probable liabilities the amount of which can be 

reasonably estimated, applying applicable accounting standards. 14 The trial court 

specifically found that the testimony of the McCulloughs’ CPA expert, Thomas Stewart, 

was not credible because his estimates of tax liability were based on contingencies that 

have not occurred. 15 

The Dallas Court of Appeals’ holding in Anderton, and now the McCullough 16 

opinion, that a judgment on appeal is excluded from the net worth calculation because 

it is a contingent liability, represents the correct and prevailing view in Texas courts of 

appeal. See, e.g., Business Staffing, Inc. v. Jackson Hot Oil Service, 2012 Tex. App. LEXIS 

3343 * 10 - 11 (Tex. App. – El Paso 2012, orig. proceeding). 

However, even if a judgment liability is not excluded because it is a contingent 

liability, in this case the trial court made factual findings that under applicable 

accounting principles, the judgment should be excluded from the net worth calculation. 

The trial court concluded that the judgment is not a probable liability the amount of 

which can be reasonably estimated applying applicable accounting standards. 17 The 

trial court’s Order specifically discussed the testimony of the McCulloughs’ witnesses, 

12 See Order on Supersedeas Bond, Findings of Fact, 5 – 13; Conclusions of Law, 1. 

13 See Order on Supersedeas Bond, Findings of Fact, 13. 

14 See Order on Supersedeas Bond, Findings of Fact, 14; Conclusions of Law, 2. 

15 See Order on Supersedeas Bond, Findings of Fact, 15 – 17. 

16 McCullough v. Scarbrough, Medlin & Assoc., 362 S.W.3d 847 (Tex. App. – Dallas 2012, orig. proceeding). 


9

including the testimony of Robert McCullough that he was appealing the entire 

judgment, that he would not concede he owes $365,000.00, and that he has not filed an 

amended tax return reporting as income the money the jury found he misappropriated 

from SMA. 18 The trial court also noted that it considered the circumstances existing at 

the time the McCulloughs’ attorney advised them that it was likely the McCulloughs 

would owe SMA around $365,000.00 on the judgment: the McCulloughs’ counsel’s 

advice was given in connection with an effort to reduce the supersedeas bond amount. 

The trial court also noted the inconsistency with appealing the entire amount of the 

judgment while at the same time treating part of the judgment as a liability in an effort 

to decrease their net worth. 19 The McCulloughs’ mandamus petition takes issue with 

the trial court’s findings, but those findings are not subject to factual sufficiency review 

by the Texas Supreme Court. In re Ron Smith, 192 S.W.3d at 568 n. 3. 

The McCulloughs’ mandamus petition makes much of the fact that SMA did not 

call a CPA to contradict the McCullough’s witnesses. However, the trial court was not 

bound by the McCulloughs’ witnesses’ testimony. SMA’s counsel cross-examined all 

witnesses and developed contradictory testimony through cross-examination. As a 

result of SMA’s counsel’s cross examination, the trial court found that Thomas Stewart, 

a CPA witness called by the McCulloughs, provided incredible testimony, which the 

trial court rejected. 20 The McCulloughs’ evidence was not credible and free from 

contradictions and inconsistency, so the trial court did not abuse its discretion in 



20 See Order on Supersedeas Bond, Findings of Fact, 15 – 17. 

10

ejecting evidence presented by the McCulloughs. See Ragsdale v. Progressive Voters 

League, 801 S.W.2d 880, 881 (Tex. 1990). 

The remainder of the McCulloughs’ mandamus challenge is directed at the trial 

court’s findings and conclusion that it is not likely the McCulloughs will suffer 

substantial economic harm by posting an additional $209,000.00 in security. However, 

the trial court made detailed findings of fact regarding the McCulloughs’ ability to post 

the additional security without suffering substantial economic harm and those findings 

are not subject to factual sufficiency review by this Court. The McCulloughs argue that 

the trial court cannot consider exempt assets in deciding whether they are likely to 

suffer substantial economic harm if they have to post an additional $209,000.00 in 

security. However, they cite no controlling precedent and fail to explain the glaring 

contradiction in counting exempt assets in establishing net worth (to which the 

McCulloughs did not object), but not counting those same assets in deciding whether 

substantial economic harm is likely. 

IV. 

CONCLUSION 

The equitable maxim, “justice delayed is justice denied,” should guide the 

Court’s decision on the McCullough’s request for yet another emergency stay of 

enforcement of the judgment. The McCulloughs failed to show that a stay of 

enforcement is necessary to protect their rights or that a stay is just. The McCulloughs’ 

request for a stay represents their latest attempt to delay SMA in enforcing its judgment 

against the McCulloughs, a judgment that was primarily due to Robert McCullough’s 

theft of SMA’s money. The McCulloughs have used abusive dilatory tactics to 

11

effectively supersede the judgment that they failed to supersede through the rules of 

procedure. Granting a stay only encourages such tactics. The Court should deny the 

Amended Motion. 

Respectfully submitted, 

/s/ Leland C. de la Garza 



Brian P. Shaw 





Telephone (214) 780-1400 

Telecopy (214) 780-1401 

ldelgarza@shacklaw.net 

bshaw@shacklaw.net 

COUNSEL FOR REAL PARTIES IN INTEREST 

SCARBROUGH, MEDLIN & ASSOCIATES, 

INC. AND SCARBROUGH, MEDLIN & 

ASSOCIATES FINANCIAL SERVICES, INC. 

12

June 6, 2012: 

CERTIFICATE OF SERVICE 

A true copy of the foregoing Response was served on the following persons on 

Counsel for Relators 

Kathryn L. Shilling 

545 E. John Carpenter Freeway, Suite 300 

Irving, Texas 75062 

Via email, electronic service, and Federal Express 

Counsel for the Collin County District Clerk 

Robert J. Davis 

Matthews, Stein, Shields, Pearce, Knott, Eden & Davis, LLP 

8131 LBJ Freeway, Suite 700 


Via email and Federal Express 

Counsel for Bank of America 

Evan Moeller 

Hirsch, Westheimer, P.C. 

700 Louisiana Street, Suite 2550 

Houston, Texas 77002 

Via email and Federal Express 

/s/ Brian P. Shaw 

Brian P. Shaw 

13

NO. 12-0454 

IN THE SUPREME COURT OF TEXAS 

IN RE ROBERT L. AND JULIA T. McCULLOUGH 

Original Proceeding from the 

416 th District Court, Collin County, Texas 

and from the Fifth Court of Appeals, Dallas, Texas 

Trial Cause No. 416-02008-2009 

Appellate Court Cause No. 05-11-01303-CV 

AFFIDAVIT OF BRIAN P. SHAW 

On this day, Brian P. Shaw appeared before me, the undersigned notary public, 

and after I administered an oath to him, upon his oath, he said: 

1. My name is Brian P. Shaw. I am over the age of 18. I am an associate with 

the law firm of Shackelford, Melton & McKinley, LLP. Together with Leland C. de la 

Garza, I represent Real Parties in Interest Scarbrough Medlin & Associates, Inc. and 

Scarbrough, Medlin & Associates Financial Services, Inc. (collectively “SMA”) in the 

above-referenced cause. I have personal knowledge of the facts contained herein and 

they are true and correct. 

2. This Affidavit is attached to SMA’s Response to Amended Emergency 

Motion for Temporary Relief (“SMA’s Response”). I have read the facts alleged therein 

and, based upon my own personal knowledge, those facts are true and correct and I 

hereby verify them. 

3. Attached hereto are the following exhibits discussed in SMA’s Response: 

AFFIDAVIT OF BRIAN P. SHAW – PAGE 1

Exhibit 1 - 

Exhibit 2 - 

Exhibit 3 - 

Exhibit 4 - 

Exhibit 5 - 

Exhibit 6 - 

Exhibit 7 - 

Order dated January 19, 2012, from Fifth Court of Appeals 

Order dated February 7, 2012, from Fifth Court of Appeals 

Order dated May 7, 2012, from 416'h District Court 

Order dated December 16, 2011, from the 416 tl1 District Court 

SMA's Response filed in No. 05-11-01303-CV in the Fifth 

Court of Appeals 

Docket Sheet in Cause No. 416-02008-2009; Scarbrough, Medlin & 

Associates, In c. and Scarbrough, Medlin & Associates Financial Seroices, 

Inc. v. Robert L. McCullough and Julia T. McCullough, in the 416'h 

District Court, Collin County, Texas 

Docket Sheet Cause No. 416-00247-2012; Scarbrough, Medlin & 

Associates, Inc. and Scarbrough, Medlin & Associates Financial Seroices, 

Inc. v. Bank of America, N.A., Cullen/Frost Bankers, Inc., Credit Union 

of Texas, Capital One Bank, N.A., ING Bank, FSB d/b/a ING Direct 

USA, Willie Nell Thompson and Andrea Stroh Thompson, District Clerk 

of Collin County, in the 416 tl1 District Court, Collin County, Texas 

Exhibit 8 Docket Sheet in No. 05-11-01303-CV; Robert L. and Julia T. 

McCullough v . Scarbrough, Medlin & Associates, Inc., et ai., in the Fifth 

Court of Appeals 

Exhibit 9 

Order dated June 6, 2012, from Fifth Court of Appeals 

The above listed exhibits are true and correct copies of the originals. I obtained the 

docket sheets from the websites of the Collin County District Clerk and the Fifth Court 

of Appeals. 

AFFIDAVIT OF BRIAN P. SHAW - PAGE 2

SWORN TO AND SUBSCRIBED before me on this the 6 th day of June, 2012. 

'U'U"U", ~ 

/

Order issued January 19,2012 

III The 

Ql:uurt nf Appealu 

llI'iftl! IDiutrid nf We:mu lit IDallnu 

No.05-1I-01J03-CV 

ROBERT L. AND JULIA T. MCCULLOUGH, Appellants 

V. 

SCARBROUGH, MEDLIN AND ASSOCIATES, INC., ET AL., Appellees 

ORDER 

llefore the Court is appellants' January 4,2012 emergency motion f

Order issued Febrwu'y 7 , 2012 

lJiiftl~ 

In The 

([ourt llf Appealz 

IDirdrid oJ Wcxas nt IDnllns 

-- -.------------------ 

No.05-11-0J303-CV 


V. 

SCARBROUGH, MEDLIN AND ASSOCIATI~S, INC., ET AL., Appellees 

ORDER 

Berorc the Court is appellants' February 6,2012 second emergency moiton to stay order on 

supersedeas bond and final judgment. We DENY the motion.

CAUSE NO. 416-00247-2012 

SCARBROUGH, MEDLIN & § 

ASSOCIATES, INC. § 

and § 


ASSOCIATES FINANCIAL SERVICES, INC., § 

v. 

Plaintiffs, 

BANK OF AMERICA, N.A., 

CULLEN/FROST BANKERS, INC., 

CREDIT UNION OF TEXAS, 

CAPITAL ONE BANK, N.A., 

ING BANK, FSB d/b/a ING DIRECT USA, 

WILLIE NELL THOMPSON, and 

ANDREA STROH THOMPSON, 

District Clerk of Collin County, 

Texas, 

Garnishees. 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

IN THE DISTRICT COURT 

416 th JUDICIAL DISTRICT 

COLLIN COUNTY, TEXAS 

ORDER ON MOTIONS 

On March 19, 2012, the Court heard (1) the Motion for Substitution of Property and 

Temporary Injunction and (2) the Motion to Dissolve or Modify Writs of Garnishment and 

Motion to Set Aside and/or Stay Entry of Garnishment Orders (collectively the 

"McCullough Motions"), filed by Defendants Robert L. McCullough and Julia T. 

McCullough (collectively the ffMcCulloughs"). On the same day, the Court also heard the 

Motion to Release Funds Held in Registry of the Court (the "Motion to Release") 

(alternative pleading contained on page 5 of Plaintiffs' Application for Writ of Garnishment 

After Judgment) filed by Plaintiffs Scarbrough, Medlin & Associates, Inc. and Scarbrough, 

Medlin & Associates Financial Services, Inc. After considering the McCullough Motions, 

the argument of counsel, and post-hearing briefing submitted by counsel, the Court finds 

that the McCullough Motions should be denied. 

The Court finds that Andrea Stroh 

ORDER ON MOTIONS - Page 1

Thompson, Dishict Clerk of Collin County, Texas, has in the registry of the Court 

$162,800.00 belonging to the McCulloughs. After considering the Motion to Release, the 

argument of counsel, and post-hearing briefing submitted by counsel, the Court finds that 

the Motion to Release should be granted. 

IT IS THEREFORE ORDERED that the McCullough Motions are denied. 

IT IS FURTHER ORDERED that the Motion to Release is granted. The District Oerk 

is directed to make a check in the amount of $159,910.00 payable to "Scarbrough, Medlin & 

Associates, Inc. and Scarbrough, Medlin & Associates Financial Services, Inc." Such amount 

shall be credited towards the judgment in Cause No. 416-02008-2009, Scarbrough, Medlin & 

Associates, Inc. and Scarbrough, Medlin & Associates Financial SenJices, Inc. v. Robert L. 

McCullough and Julia T. McCullough, signed by this Court on July 14, 2011. 

IT IS FURTHER ORDERED that Andrea Stroh Thompson, Dish'ict Oerk of Collin 

County, recovers $25.00 for a research fee and $2,865.00 in reasonable attomeys' fees from 

the sums in her possession belonging to the McCulloughs. The District Clerk is directed to 

make a check in the amount of $2,890.00 payable to Collin County, Texas. 

IT IS FURTHER ORDERED that Andrea Stroh Thompson, Dishict Clerk of Collin 

County, is by this order discharged of all liability to the McCulloughs to the extent of the 

sums above ordered. 

Signed on this --; day of May, 

ORDER ON MOTIONS - Page 2

CAUSE NO. 416.02008-2009 

.' 



md § 

SCARBROUGH, MEDUN & § 

A$OCIATFS FINANOAL SERVICES, INC., § 

v. 

Plaintiffs, 

ROBERT L. McCULLOUGH 

md 

JULIA T. McCULLOUGH, 

Defendants. 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

IN THE DISTRICI' COURT 

416th JUDICIAL DISTRICT 

COLUN COUNlY, TEXAS 

'. 

ORDER ON SUPERSEDEAS BOND 

Plaintiffs' Contest of Defendants' Net Worth and Defendants' Motion for 

Reduction of Cash Deposit were heard by the Court. The Court, after considering the 

parties' court filings, evidence admitted and the argument of counsel, makes the 

following findings, conclusions, and orders. 

FINDINGS OF FAC!' 

1. On August 16, 2011, Defendants filed with the Court the AffidaVits of 

Robert L. M

2. On August 25, 2011, Plaintiffs filed a Contest of the McCullough's net 

worth. 

3. On November 11 and 29, 2011, the Court conducted hearings on Plaintiffs' 

Contest of Defendants' net worth and Defendants' Motion for Reduction of Cash 

Deposit. 

4. In open court, Plaintiffs' counsel advised the Court that Plaintiffs were 

only challenging the inclusion of the following liabilities in the calculation of net worth: 

(a) $365,000.00 Ujudgment payablei" 

(b) $35,000.00 "income taxes -current balance;" and 

(c) $18,000.00 "estimated income tax." 

5. The $365,000.00 judgment payable is a portion of the judgment entered by 

this Court in this case on July 14,2011. 

6. The Court has considered the accounting standards established by the 

Financial Accounting Standards Board for accruing a liability in an individual's 

financial statement for the purpose of calculating net worth. 

Under applicable 

accounting standards, a liability must be accrued whe1\ it is probable that a liability has 

... 

been incurred and the amount of the loss can be reasonably estimated and a liability is 

probable when future events are likely to occur. 

7. The Court finds the $365,000.00 judgment payable listed in the Financial 

Statement of the McCulloughs is a contingent judgment liability. 

ORDER ON SUPERSEDEAS BOND - PAOE 2 

332 

•

8. The McCulloughs have treated the judgment in this case as a contingent 

liability as reflected in the Confidential Financial Statement attached as Exhibit B-5 to 

the Affidavit of Robert L. McCullough. 

9. The McCulloughs have filed a notice of appeal giving .notice of their 

appeal from the July 14,2011, Judgment. 

10. The McCulloughs have filed a docketing statement with the Dallas Court 

o£ Appeals indicating their intent to appeal all awards made in the Judgment 

11. . Robert McCullough testified in deposition and in open CQurt that he 

intended to appeal the entire Judgment and seeks to invalidate the entire Judgment. 

12. The McCuIloughs have not conceded that they owe any portion of the 

Judgment. 

13. The McCulloughs have failed to carry their burden of proving that 

$365,000.00 of the Judgment entered in this case is a current liability of the 

McCulloughs. The Court finds the Judgment in this case is not a probable liability the 

amount of which can be reasonably estimated, applying applicable accounting 

standards. 

While the Court heard testimony that Defendants' counsel, Kathryn 

Shilling, told Robert McCullough and the McCullough's CPA Thomas Stewart that it 

was likely that the McCulloughs would owe Plaintiffs around $365,000.00 in this case, 

the Court also heard Robert McCullough's testimony that he was appealing the entire 

judgment, that he would not concede that he owes $365,000.00 to Plaintiffs and that he 

has not filed an amended tax return reporting as income the money the jury found he 

misappropriated from Plaintiffs. In making the above finding, the Court has considered 

ORDER ON SUPERSEDEAS BOND - PAGE 3 

333

the circumstances existing at the time of Shilling's advice to her client, namely that 

Shilling's advice was given in connection with an effort to reduce the supersedeas bond 

that would otherwise be required and the inconsistency between Shilling's advice and 

the legal position taken by the McCulioughs by appealing the entire judgt1lent and the 

McCulloughs' own treatment of the Judgment as a contingent liability. 

14. The Court finds that the McCuIloughs have failed to carry their burden of 

proving that the income tax liabilities listed in the Financial state~ent 

totaling 

$53~O.OO are current liabilities. The Court finds that the income tax Jiabilities listed in 

the Financial statement are not current liabilities of the McCulloughs. The Court fmds 

the income tax liabilities are not probable liabilities the amount of which can be 

reasonably estimated, applying applicable accounting standards. 

15. The Court did not find Thomas Stewart's testimony regarding the tax 

liabilities to be credible. Stewart's estimates of tax liability are based on contingencies 

that have not occurred. 

16. Stewart testified the income tax liability of $35,000.00 was primarily for 

taxes, penalties and interest that wouJd be due on the moneys the jury found were 

misappropriated by Robert McCullough from Plaintiffs. However, the 'McCulloughs 

have appealed the Judgment, including the findings of misappl'opriat.ion and the 

McCulloughs have not filed an amended tax return reporting the misappropriated 

moneys as income. 

17. Stewart testified the estimated income tax liability of $18,O~OO was based 

on the differences in value between the assets and liabilities as if all assets were sold. 

ORDER ON SUPERSEDEAS BOND - PAG£4 

334

However, Stewart and Robert McCullough testified that the McCulloughs were not 

selling their assets. 

18. The Court finds that the McCulloughs' current net worth is $743,600.00. 

In making this finding, the Court has deducted from Defendant's liabilities reflected in 

their Financial Statement the following liabilities: (a) $365,000.00 represented in 

Defendants' Financial Statement as "Judgment Payable;" (b) $35,000.00 represented in 

Defendants' Financial Statement as "Income Taxes - Current Balance"; and (c) 

$18,000.00 represented in Defendants' Financial Statement as "Estimated Income Tax." 

19. The Court finds that it is not likely the McCulloughs will suffer substantial 

economic harm if required to post a total supersedeas bond of $371,800.00, which is 50% 

of $743,600.00. 

20. The McCulloughs have already posted $162,800.00 as a c~h deposit to 

supersede the Judgment. In order to post a supersedeas bond equal to 50% of the 

McCuUoughs' net worth, they will be required to post an additional bond or cash 

deposit of $209,000.00. 

21. The McCulloughs have sufficient unencumbered cash or Qther assets on 

hand to be able to post a bond or cash deposit for an additional $209,090.00. Without 

limitation, the McCulloughs have between $51,000.00 1 and $64,154.00 2 in cash, 

$312,900.00 in retirement accounts, and $100,000.00 in personal effects and jewe1ry. The 

I This amount was testified to by Robert McCullough at the hearing. 

llbis amount is listed in Defendants' Motion for Reduction ofCssh Deposit. 


335

"'all" 

McCulIoughs have additional assets that are less liquid and one asset that is being 

liquidated to pay for litigation expenses (discussed below). 

22. The requirement that the McCulloughs post an additional $209,000.00 in 

bond or cash deposit will not deprive the McCulIoughs of funds to pay for their 

litigation expenses, including the appeal from the Judgment. 

Robert McCullough 

testified he had a buyer for their Inland Diversified Real Estate Trust, Inc. asset (valued 

in the Financial Statement at $55,600.(0) and he intended to use the proceeds of that sale 

to pay their legal expenses for the appeal. 

23. In addition to the assets they have accumulated, the McCulloughs have 

jobs that contribute in excess of $300,000.00 in income per year. Robert" McCullough is 

employed by Frost Insurance Agency as an executive and earns in excess of $250,000.00 

per year. Julia McCullough is a school teacher earning around $50,000 per year. 

24. The McCulloughs maintain numerous bank accounts. Robert McCullough 

testified that the primary checking account they use is Account No. 0069-8860-0305 at 

Bank of America. The Court finds the following deposits were made into that account 

between July 2010 and October 2011: 

7/10/10 - 8/10/10 

8/11/10 - 9/9/10 

9/10/10 -10/7/10 

10/8/10 -11/05/10 

11/6/10 -12/10/10 

12/11/10 -1/07/11 

1/8/11 - 2/4/11 

2/5/11-3/10/11 

3/11/11-4/8/11 

4/9/11- 5/9/11 

5/10/11- 6/9/11 

$27,546.32 

$31,137.67 

$30,65289 

$24,787.16 

$22,062.69 

$22,700.48 

$23,090.51 

$44,454.42 

$27,566.92 

$20,268.20 

$23,336.86 

ORDER ON SUPERSEDEAS BOND - PAOE 6 

336

6/10/11 - 7/8/11 

7/9/11-8/10/11 

8/11/11- 9/9/11 

9/10/11 -10/7/11 

TOTAL 

$28,859.43 

$25,402.94 

$14.870.37 

$24,469.83 

$391,206.70 

The Court further finds the average deposit per month made during this time period 

was $26,080.45. The Court finds that the McCulloughs have sufficient demonstrated 

earning capacity to pay for their living expenses and to maintain a very comfortable 

standard of living. The Court finds that the McCulloughs will not have to invade their 

earnings to post an additional $209,000.00 in security. 

25. The Court finds that the McCulloughs have the ability to borrow money to 

pay towards an additional $209,000.00 in security. Robert McCullough testified that he 

has a line of credit loan with $44,000.00 in available credit. McCullough also testified 

that he could borrow against his 401K retirement plan. Robert McCullough testified 

that he has made no effort to borrow money to post security for the Judgment in this 

case. 

26. The Court has considered the economic impact the McCullough's will 

experience if required to use their cash and other assets and available credit to pay an 

additional $209,000.00 in security. The Court fmds that, considering all fuhds and loans 

that are available to the McCulloughs, posting an additional $209,000.00 in security will 

leave the McCulloughs with two homes, three cars, all of their personal effects and 

jewelry, more than half of their retirement accounts and funds for litigation expenses 

and substantial income to pay for living expenses and to maintain the McCullough's 

standard of living. 

The Court notes that during 2011, the McCulloughs gifted 

ORDER. ON SUPERSEDEAS BOND - PAOE 7 

337

$90,000.00 of their assets to third parties ($75,000.00 to one of the McCullough's children 

and Julia McCullough's mother and over $15,000.00 in tithing to their church) through 

September 2011, which reduced the amount of cash that would otherwise be available 

for use as security for the Judgment. 

13. The Court finds that although the McCulloughs have historically paid the 

college and other expenses of their adult children, those expenses are not legal 

obligations of the McCullough since those children are adults. 

CONCLUSIONS OF LAW 

1. The $365,000.00 judgment payable listed in the McCulloughs' Financial 

Statement is a contingent judgment liability and, under Anderton '0. Cmlliey, 326 S.W.3d 

725, (Tex. App. - Dallas 2010, orig. proceeding) and other appellate decisions dealing 

with the determination of net worth under Tex. Civ. Prac. & Rem. Code § S2.006(c) and 

Tex. R App. P. 24, such a liability is not included in the current net worth calculation. 

2 The $35,000.00 and $18,000.00 tax liabilities listed in the Mc.

IT IS TIiEREFORE ORDERED that Defendants shall post additional security in 

the amount of 5209,000.00, provided that enforcement of the Judgment will be 

suspended for twenty days after the date of this Order. Should Defendants post the 

additional security required herein within such twenty day period, enforcement of the 

Judgment is stayed. Should Defendants not post the additional security required. herein 

within such twenty day period, the Judgment may be enforced against the Defendants. 

It is further ORDERED that the Post-Judgment Injunction entered on October 6, 

2011, is hereby modified to exclude from the injunction payment of attorney's fees and 

expert's fees, and as modified, the Post-Judgment Injunction is continued in effect until 

further Order of the Court. 

Signed this -tb- day of December, 2 


339

No. 05-11-01303-CV 

IN THE COURT OF APPEALS 

FIFTH DISTRICT OF TEXAS AT DALLAS 

ROBERT L. AND JULIA T. McCULLOUGH, Appellants 

V. 

SCARBROUGH, MEDLIN AND ASSOCIATES, INC. 

and 

SCARBROUGH, MEDLIN & ASSOCIATES FINANCIAL SERVICES, INC., Appellees 

On Appeal from the 416 th District Court 

Collin County, Texas 

Trial Court Cause No. 416-02008-2009 

APPELLEES’ RESPONSE TO MOTION 

TO REVIEW ORDER ON SUPERSEDEAS BOND 

TO THE HONORABLE JUSTICES OF THE COURT OF APPEALS: 

Appellees Scarbrough, Medlin & Associates, Inc. and Scarbrough, Medlin & 

Associates Financial Services, Inc. ( collectively “SMA”) hereby respond to the Motion 

to Review Order on Supersedeas Bond (the “Motion to Review”) filed by Appellants 

Robert L. McCullough (“McCullough”) and Julia T. McCullough (collectively the 

“McCulloughs”), and in support thereof show as follows:

I. SUMMARY OF RESPONSE 

The trial court correctly deducted the judgment liability and taxes the 

McCulloughs included in their net worth calculation because: 

 

the judgment liability is a contingent liability not includable in the net worth 

calculation as held in this Court’s decision in Anderton v. Cawley, and accrual is 

not warranted under GAAP; and 

 

the tax liabilities are not includable in the net worth calculation because they are 

not current liabilities for which accrual is warranted under GAAP; they are 

imaginary liabilities raised for the purpose of reducing the bond. 

The trial court correctly refused to reduce the supersedeas bond because the 

McCulloughs failed to show that posting additional security would cause them 

substantial economic harm. 

II. 

INTRODUCTION 

On July 14, 2011, the 416 th District Court of Collin County entered a judgment 

against the McCulloughs for $1.2 million following a jury trial on claims that Robert 

McCullough stole commissions from SMA. 1 The McCulloughs appeal from that 

judgment. 

On August 16, 2011, the McCulloughs filed affidavits of net worth with the trial 

court. 2 The affidavits showed a net worth of $325,600.00. In arriving at their net worth, 

the McCulloughs included $365,000.00 of the $1.2 million judgment liability, and two 

1 CR 409-412. 

2 SCR 45, 48. 

APPELLEES’ RESPONSE TO MOTION TO REVIEW ORDER ON SUPERSEDEAS BOND – Page 2

amounts for future income taxes, $35,000.00 and $18,000.00. 3 The McCulloughs 

deposited $162,800.00 with the clerk in lieu of a supersedeas bond, 4 representing 50% of 

the McCulloughs’ claimed net worth. On August 25, 2011, SMA filed a contest of the 

McCulloughs’ net worth. 5 On October 4, 2011, SMA filed a Brief in Support of Net 

Worth Contest. 6 On November 18, 2011, the McCulloughs filed a Motion for Reduction 

of Cash Deposit. 7 On November 29, 2011, SMA filed a Response to the Motion for 

Reduction of Cash Deposit. 8 

After evidentiary hearings held in November 2011, the trial court entered an 

Order on Supersedeas Bond on December 16, 2011, which removed the disputed 

judgment and tax liabilities from the McCulloughs’ net worth and required the 

McCulloughs to post additional security of $209,000.00. 9 The Order denied the 

McCulloughs’ request for a reduction in the cash deposit. 10 

III. 

STANDARD OF REVIEW 

The trial court’s determination of the amount of security and whether to reduce 

the security due to “substantial economic harm” is reviewed for an abuse of discretion. 

G.M. Houser, Inc. v. Rodgers, 204 S.W.3d 836, 840 (Tex. App. – Dallas 2006, no pet.); 

Ramco Oil & Gas, Ltd. v. Anglo Dutch (Tenge) L.L.C., 171 S.W.3d 905, 909 (Tex. App. – 

Houston [14 th Dist.] 2005, orig. proceeding). Generally, the test for abuse of discretion is 

3 SCR 57. 

4 SCR 44. 

5 SCR 205. 

6 SCR 223. 

7 SCR 271. 

8 SCR 277. 

9 SCR 331. 

10 SCR 331. 


whether the trial court acted without reference to any guiding rules and principles or 

whether the trial court acted arbitrarily and unreasonably. McDaniel v. Yarbrough, 898 

S.W.2d 251, 253 (Tex. 1995). 

The general rule under the abuse of discretion standard is that legal and factual 

insufficiency are not independent grounds of error, but they are relevant factors in 

assessing whether the trial court abused its discretion. In re T.J.L., 97 S.W.3d 257, 266 

(Tex. App. – Houston [14 th Dist.] 2002, no pet.). Under this rule, there is no abuse of 

discretion as long as some evidence of a substantive and probative character exists to 

support the trial court’s decision. Id.; see also Wood v. O’Donnell, 894 S.W.2d 555, 556 

(Tex. App. – Fort Worth 1995, no writ). However, the Texas Supreme Court held in In re 

Smith, 192 S.W.3d 564, 569 (Tex. 2006), that a reviewing appellate court must conduct a 

legal and factual sufficiency analysis of the trial court’s determination of security. 

In a legal sufficiency review, if the evidence would enable reasonable and fairminded 

people to disagree in their conclusions, there is legally sufficient evidence. City 

of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). A reviewing court cannot substitute 

its judgment for that of the trier-of-fact, so long as the evidence falls within this zone of 

reasonable disagreement. Id. The evidence must be considered in the light most 

favorable to the finding and the reviewing court must indulge every reasonable 

inference in favor of the finding. Id. 

A factual insufficiency analysis requires the appellate court to consider all of the 

evidence and determine whether the factual finding is “so against the great weight and 

preponderance of the evidence to be manifestly unjust.” Pool v. Ford Motor Co., 715 


S.W.2d 629, 635 (Tex. 1986) (citing In Re King’s Estate, 244 S.W.2d 660, 662 (Tex. 1951)). 

In order to justify reversal based on factual insufficiency, an appellate court is required 

to detail the relevant evidence, and clearly state why the finding is so against the great 

weight and preponderance as to be manifestly unjust, why it shocks the conscience, or 

clearly demonstrates bias. Pool, 715 S.W.2d at 636. 

A trial court does not abuse its discretion merely because an appellate court may 

decide a matter differently from the evidence presented. In the Interest of D.W., 249 

S.W.3d 625, 647 (Tex. App. – Fort Worth 2008, pet. denied) (citing Downer v. Aquamarine 

Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). An abuse of discretion does not occur 

where the trial court bases its decisions on conflicting evidence. Id. An abuse of 

discretion does not occur as long as some evidence of substantive and probative 

character exists to support the trial court’s decision. In the Interest of M.N.G., 147 S.W.3d 

521, 530 (Tex. App. – Fort Worth 2004, pet. denied). 

IV. 

THE RECORD AND APPENDIX 

The record related to the Motion to Review consists of the Clerk’s Record (“CR”) 

filed on December 13, 2011, the Supplemental Clerk’s Record (“SCR”) filed on January 

25, 2012, and Volumes 5 and 6 of the Reporter’s Record (“RR”) filed on February 3, 

2012. 

For the convenience of the Court, the following are helpful citations to the 

Reporter’s Record: 

Volume 5 

Mark Melton – pp. 13 to 58 


Thomas Stewart – pp. 59 to 82 

Robert McCullough – pp. 83 to 89 

Exhibit 4, Notice of Appeal – p. 130 

Exhibit 5, Docketing Statement – p. 133 

Exhibit 6, Personal Financial Statement – p. 143 

Exhibit 7, FASB standards (450-20-20, et. seq.) – p. 145 

Volume 6 

Robert McCullough – pp. 5 to 79 

Exhibit 1, “Deposits into Bank of America Account” – p. 83 

Exhibit 2, Bank of America statements – p. 85 

Attached hereto is an Appendix which includes the following: 

A. Order on Supersedeas Bond; 11 

B. Opinion in Anderton v. Cawley, 326 S.W.3d 725 (Tex. App. – Dallas 2010, 

orig. proceeding); and 

C. The McCulloughs’ sworn financial statement. 12 

V. ARGUMENT & AUTHORITY 

A. The judgment liability was properly excluded from net worth. 

Section 52.006 of the Texas Civil Practice & Remedies Code and Rule 24.2 of the 

Texas Rules of Appellate Procedure require a judgment debtor to post a supersedeas 

bond or deposit for at least 50% of the debtor’s net worth, not to exceed $25 million. 

Rule 24.2(a)(1) makes it clear that net worth means current net worth. 

11 SCR 331. 

12 SCR 54. 


(i) 

Anderton compels exclusion of the judgment liability. 

In Anderton v. Cawley, 326 S.W.3d 725, 726 (Tex. App. – Dallas, 2010, orig. 

proceeding), this Court addressed the question of whether a money judgment on appeal 

is properly included as a liability in the net worth calculation for purposes of 

determining current net worth in the supersedeas bond analysis. In an opinion by Chief 

Justice Carolyn Wright, the Court held that the plain language of Rule 24 does not 

include a contingent money judgment in calculating net worth. Anderton, 326 S.W.3d at 

726. 13 

The McCulloughs wish to ignore the clear holding in Anderton that a contingent 

money judgment is not includable in the net worth calculation and, instead, read 

Anderton as a decision limited to the facts of that case where the trial court accepted one 

expert’s opinion about whether a judgment liability is probable over another. See 

Motion to Review, p. 9-10. However, the Anderton opinion leaves no room for doubt: 

“the plain language of the statute does not include a contingent money judgment in 

calculating net worth.” Anderton, 326 S.W.3d at 726. 

The Court’s construction of Rule 24 in Anderton as excluding a contingent money 

judgment in the determination of current net worth is reasonable. 14 First, Rule 24 is 

concerned with “current” liabilities. By definition, a current liability does not include a 

13 The Court should note that the judgment debtor in Anderton filed a petition for writ of mandamus with 

the Texas Supreme Court on the issue of whether the trial court abused its discretion in entering an order 

that refused to include the judgment in the calculation of net worth. See copy of Petition at RR 115. The 

Texas Supreme Court denied the Petition on November 24, 2010. See copy of docket entry from Texas 

Supreme Court’s website at RR 126. 

14 The Court must give a reasonable construction to rules and statutes, and a court should not construe a 

rule or statute in a way that leads to absurd results. See City of Rockwall v. Hughs, 246 S.W.621, 625-26 

(“[W]e construe the statute’s words according to their plain meaning unless a contrary intention is 

apparent from the context or unless such construction leads to absurd results.”). 


contingent liability. Second, Rule 24 represents a balance between the interests of 

creditors and debtors. If courts allowed a judgment debtor to include the judgment 

being appealed from in the calculation of net worth, it could lead to absurd results. For 

example, if the judgment equals or exceeds the judgment debtor’s net worth, the 

judgment debtor would have no net worth and, thus, would be excused from posting 

any security. Yet, the judgment debtor might have substantial cash or other assets that 

could be available to satisfy the judgment. Not requiring the judgment debtor to post a 

supersedeas bond in that situation does not further the interests sought to be protected 

in the supersedeas bond regime and is inconsistent with the “balance” struck by the 

legislature in balancing the interests of the judgment creditor and the judgment debtor. 

The McCulloughs do not challenge the trial court’s factual finding that the 

judgment in the underlying case is a contingent money judgment. 15 The record 

supports that finding. The McCulloughs prepared a financial statement that listed the 

judgment as a “contingent” liability. 16 McCullough testified he appealed from the 

judgment and is challenging the entire judgment. 17 Even though McCullough’s CPA, 

Thomas Stewart (“Stewart”), advised McCullough to amend his tax returns to report 

the commissions that the jury found he stole as income, 18 McCullough admitted that he 

15 FOF No. 7. 

16 Exhibit 6, RR, Vol. 5 of 6, p. 143. 

17 RR, Vol. 6 of 6, p. 73. This is further supported by the Docketing Statement he filed with the Court of 

Appeals, which reflects that he is challenging the entire judgment. 

18 RR, Vol. 6 of 6, p. 74. 


has not done so. 19 And, the McCulloughs’ other expert, Mark Melton (“Melton”), 

testified that the judgment is a contingent liability. 20 

Because the record contains ample evidence that the judgment liability is a 

contingent liability and not a current liability, under this Court’s prior precedent in 

Anderton, the amount of the judgment in the underlying case was correctly excluded in 

determining the McCulloughs’ current net worth. See also Montelongo v. Exit Stage Left, 

Inc., 293 S.W.3d 294, 299 (Tex. App. – El Paso 2009, orig. proceeding). The trial court did 

not err. 

(ii) 

GAAP principles require exclusion of the judgment. 

Even though Anderton is controlling and dispositive, the record before the Court 

supports the trial court’s findings that the judgment liability is not a liability that is 

probable and the amount of which is not reasonably estimatable applying generally 

accepted accounting principles. As a result, the judgment liability was properly 

excluded. 

This Court and other appellate courts have held that in determining net worth, 

the trial court should apply generally accepted accounting principles (“GAAP”). 

Anderton, 326 S.W.3d at 726; Ramco, 171 S.W.3d at 914. There was no disagreement on 

this and the trial court’s findings of fact and conclusions of law reflect the trial court 

applied GAAP in its analysis. 


20 RR, Vol. 5 of 6, p. 29-30. 


It is undisputed that Financial Accounting Standards Board (“FASB”) Statement 

of Financial Accounting Standards No. 5 (“FASB No. 5”), now codified as 450-20-20 et. 

seq., provides the general framework for evaluating liabilities. 

Both of the 

McCulloughs’ CPA witnesses described FASB No. 5 and its principles. FASB No. 5 

refers to liabilities as “loss contingencies” and breaks them down into three categories: 

 

 

 

probable (“likely to occur”) 

reasonably possible (“more than remote but less than likely”) 

remote (“chance of the future event or events occurring is slight”) 

This categorization dictates whether the liability is recognized on the balance sheet, 

disclosed in footnotes, or not mentioned in the financial statement, respectively. FASB 

No. 5 requires accrual as a charge to income (i.e., counting in the balance sheet) if the 

loss contingency is both probable and the amount of the loss can be reasonably 

estimated. 

The McCulloughs begin their abuse of discretion argument with the argument 

that a trial court abuses its discretion when it ignores “the only evidence offered to 

prove a vital fact when such evidence is otherwise credible and free from contradictions 

and inconsistency.” 21 The McCulloughs argue that the trial court disregarded the only 

evidence on whether accrual of the judgment as a liability was required by GAAP, the 

testimony of their CPA witnesses, Melton and Thomas. However, a more careful 

review of the record reflects that the trial court followed GAAP and resolved conflicts in 

the evidence to conclude that the $365,000.00 contingent money judgment should not 

21 See Motion to Review, p. 8. 


have been counted as a liability for purposes of determining the McCulloughs’ net 

worth. 

(a) 

Mark Melton’s testimony. 

The McCulloughs called Mark Melton to testify regarding GAAP. Melton is a 

2008 law graduate who testified he teaches a mergers and acquisitions class and tax 

research classes at SMU in the graduate accounting program. He was also an adjunct 

professor at Mountain View College from 2006 to 2009, teaching accounting classes. 22 

Melton testified that in 2009, FASB codified its accounting rules. 23 On direct 

examination, Melton testified that: 

 

He would look to Section 450-20-25 of the FASB Code for guidance on 

how and when you would accrue a liability for a contingency. 24 Section 

450-20-25 was previously FASB No. 5. 25 

 

Whether to include the judgment as a liability is a two-part test: (1) is it 

probable the liability is going to mature at some point in the future, and 

(2) is the liability reasonably estimatable? 26 

 

If McCullough were to testify that he has a $1.1 million judgment against 

him and it is his belief, based upon the advice of counsel, that after all 



24 RR, Vol. 5 of 6, p. 17. Section 450-20-25 was previously FASB No. 5. See RR, Vol. 5 of 6, p. 35. Exhibit 7 

to the hearings in this case is a copy of Section 450-20-20, 450-20-25 and 450-20-55. 




appeals he will owe a portion of that, he should include some portion of 

that judgment on his net worth statement. 27 

 

A contingent liability becomes an actual liability when there is no chance 

it will go away. 28 

On cross examination, Melton testified that: 

 

He practiced accountancy from 2004 to 2008, primarily in the preparation 

of tax returns. 29 

 

He has practiced law for three and one half years and has not practiced 

accountancy during that period. 30 

 

He was not familiar with the Dallas Court of Appeals’ Anderton decision 

before being retained by the McCulloughs. 31 

Under GAAP, there are three choices for liability: (1) probable, (2) 

reasonably possible, and (3) remote. 32 

o “Probable” means likely to occur, and “accrue” means put the 

number in the calculation of net worth. 33 What is probable and 

what is not is a gray area. 34 

o “Reasonably possible” means “the chance of the future event or 

events occurring is more than remote but less than likely, “ and if a 










liability is “reasonably possible,” then you do not accrue the 

liability on the financial statement, you just make a footnote. 35 

o If a liability is “remote,” then you do not accrue it or note it. 36 

 

He was only testifying to describe the rule: “So I am not close enough to the 

facts of this case to say it is or is not probable. I’ll leave that to other people and 

for the judge to decide if he agrees.” 37 He offered no opinion on whether the 

judgment liability is probable. 38 

 

If McCullough were to testify that he believes he owes $365,000.00 of the 

judgment, that would put that liability as an appropriate entry on a net 

worth statement. 39 

McCullough told Melton he intends to fight all of the judgment. 40 

He has not seen the notice of appeal or the docketing statement (Exhibits 4 

and 5). 41 The docketing statement indicates McCullough intends to 

challenge everything in the judgment. 42 

 

The McCulloughs prepared a financial statement (Appx. C) that lists the 

judgment liability as a contingent liability. 43 The judgment in this case is a 

contingent money judgment. 44 












FASB Section 450-20—55-12 (Exhibit 7) lists six factors to be considered in 

assessing the probability of a loss: 45 (1) nature of litigation, (2) progress of 

the case, (3) opinions of legal counsel, (4) experience of entity in similar 

cases, (5) experience of other entities, and (6) any decision of the entity’s 

management as to how the entity intends to respond to the lawsuit, claim, 

or assessment (“for example, a decision to contest the case vigorously or a 

decision to seek an out-of-court settlement.”). 46 These factors have to be 

considered in assessing whether the underlying judgment is a probable 

liability. 47 

 

McCullough’s statement that he intends to contest or invalidate all of the 

judgment is relevant to the analysis. 48 

 

That the case is now between a judgment and an appeal is relevant to the 

analysis. 49 

Melton has not analyzed the six factors stated in FASB Section 450-20—55- 

12 and has not been provided that kind of information. 50 

 

He was not provided an opinion of the McCulloughs’ counsel that 

McCullough owes $365,000.00. 51 

Melton cannot reasonably estimate McCullough’s liability. 52 









While Melton’s testimony provides the accounting framework for the GAAP 

analysis of contingent liabilities, Melton’s testimony does not support the McCulloughs’ 

argument that there was no conflict in the evidence and that accrual of a $365,000.00 

judgment liability is proper. To the contrary, Melton identified six factors to consider in 

the accrual analysis. Two of the factors – the experience of the McCulloughs in similar 

cases and the experience of other defendants – were not addressed in the hearing and 

therefore have no bearing. Of the remaining four factors, three favor SMA and one— 

Kathryn Shilling’s testimony that McCullough probably owes $365,000.00 (that was 

never provided to Melton) — is inconsistent with actions taken by the McCulloughs 

indicating they do not accept her opinion, is colored by the circumstances of being 

offered to reduce the bond amount, and is inconsistent with Ms. Shilling’s statements in 

the docketing statement she filed with this Court. Melton testified that whether a 

liability is probable is a gray area. On this record, the trial court resolved that grayness 

against the McCulloughs. 

Melton’s testimony also supports SMA’s argument that under Anderton, the 

judgment should not be included in the net worth calculation. Melton testified the 

judgment is a contingent liability. Under Anderton, that liability is not included in the 

calculation of net worth. 

(b) 

Thomas Stewart’s testimony. 

testified that: 

The McCulloughs called Thomas Stewart next. On direct examination, Stewart 



When he prepared the McCulloughs’ June 30, 2011, statement of financial 

condition (Exhibit 8), he relied upon GAAP. 53 

 

He relied upon the advice of the McCulloughs’ counsel in determining 

whether or not $365,000.00 was an appropriate entry. 54 

On cross examination, Stewart testified that: 

 

The Statement of Financial Condition says he is not expressing an opinion 

about whether the statement is in accordance with GAAP. 55 But, in court 

he offered the opinion that the statement was in accordance with GAAP. 56 

The jury found McCullough misappropriated $138,000.00. 57 

 

A gentleman in Stewart’s office advised McCullough to report that income 

to the IRS. 58 

 

McCullough has not followed that advice and has not filed an amended 

tax return with the IRS disclosing that he received that money. 59 If 

McCullough filed a tax return reporting that he had this additional 

income, he would owe the IRS around $35,000.00. 60 

 

Kathryn Shilling told him that the amount for the contract dispute, the 

attorneys’ fees, CPA fees, and interest were “probable that would be 

owed,” and the other damages, including punitive damages, were 










unknown. 61 Shilling did not tell Stewart why she thought it was 

probable. 62 

 

Stewart is aware the McCulloughs are appealing everything with an eye 

towards invalidating the entire judgment. 63 

Stewart’s testimony was conclusory and provided little help to the trial court in 

determining whether GAAP required inclusion of a liability of $365,000.00 related to the 

underlying judgment. The shortcomings in Stewart’s testimony include: 

 

Stewart provided no explanation of the inconsistency between his 

disclaimer in the statement that he was not offering an opinion that the 

statement was prepared in accordance with GAAP and his in-court 

testimony that it was prepared in accordance with GAAP. 

 

Stewart provided no explanation of the application of the FASB Section 

450-20—55-12 factors related to accrual of the judgment liability. 

 

Stewart provided no explanation of how he resolved in the McCulloughs’ 

favor the inconsistency between Ms. Shilling’s opinion that $365,000.00 of 

the judgment liability was probable, and the McCulloughs’ conduct 

indicating that they did not accept their counsel’s advice by appealing all 

of the judgment and not paying taxes on the misappropriated funds. 

In assessing Stewart’s credibility and the weight to be afforded Stewart’s 

testimony related to the judgment liability, the trial court heard Stewart’s incredible 





testimony regarding imaginary tax liabilities (discussed below) and had the benefit of 

listening to Stewart’s trial testimony regarding SMA’s claims and McCullough’s 

damage claims, all of which were completely rejected by the jury. The trial court was in 

the best position to decide whether to believe anything Stewart said, and if the trial 

court believed anything Stewart said, to decide how much weight to give to his 

testimony. Under the standards of review for abuse of discretion and legal and factual 

insufficiency of the evidence, the Court should not second guess the trial court’s 

decisions on credibility and weight. 

(c) Robert McCullough’s testimony. 64 

On direct examination, McCullough testified that: 

 

He was advised that it is unlikely that the contract and attorneys’ fees 

findings would be reversed on appeal. 65 

On cross examination, McCullough testified that: 

The McCulloughs have appealed the entire judgment. 66 

McCullough does not agree he owes SMA any money. 67 

 

Stewart advised McCullough to file an amended tax return, but 

McCullough has not done so. 68 

64 McCullough testified on November 29, 2011, in connection with the Motion to Reduce Bond. But, the 

trial court also allowed McCullough to testify as to matters related to the bond contest. See RR, Vol. 6 of 

6, p. 7. 






Other than some additional deposition testimony of McCullough that was admitted 

post-hearing by agreement, the record was closed after McCullough’s hearing 

testimony. 

McCulloughs’ testimony merely illustrates the inconsistency of the 

McCullough’s position related to the probability of owing $365,000.00. While their 

counsel advised that they probably owe SMA $365,000.00, the McCulloughs have not 

accepted that advice and, in fact, disagree with it: 

Q: Well, and you’re not agreeing that you owe Scarbrough, Medlin any money, 

correct? 

A: That is correct. 69 

And, as recognized by the trial court in FOF No. 13, Ms. Shilling’s advice must be 

contrasted with the notice of appeal and docketing statement she filed. The docketing 

statement signed by Ms. Shilling tells this Court that there is no evidence to support the 

breach of contract claim, no evidence McCullough breached the Separation Agreement, 

the judgment erroneously awards accounting fees, and there is insufficient evidence to 

support the actual damages awarded. 70 Right above Ms. Shilling’s signature on the 

docketing statement is the following language: “I CERTIFY THAT, TO THE BEST OF 

MY KNOWLEDGE, ALL OF THE ABOVE INFORMATION IS TRUE AND 

CORRECT.” 71 


70 RR, Vol. 5 of 6, p. 138; Ex. 5. The docketing statement is required by TEX. R. APP. P. 32.1 

71 RR, Vol. 5 of 6, p. 141; Ex. 5. 


The docketing statement is directly at odds with Ms. Shilling’s representations 

related to the probable outcome of the appeal. If Ms. Shilling is telling her client and 

Thomas Stewart that the probable outcome of the appeal is the McCulloughs will lose 

on appeal on the breach of contract claim and will probably have to pay actual 

damages, accounting fees and attorney’s fees, she is not telling the Court the same 

thing. The discrepancy between these two positions is likely due to the different 

reasons for each representation. On the one hand, Ms. Shilling’s advice that the 

McCulloughs will likely lose on the breach of contract claim helps to reduce the bond. 

On the other hand, Ms. Shilling’s representation to the Court in the docketing statement 

helps to preview her appellate issues for the Court. In FOF No. 13, the trial court 

considered this inconsistency. Within the bounds of its discretion, the trial court 

resolved this inconsistency against the McCulloughs. 

The McCulloughs do not challenge the trial court’s findings that the 

McCulloughs are appealing the entire judgment and that they refuse to concede that 

they owe any portion of the judgment. Instead, the McCulloughs argue that FOF No. 9 

through 13 are irrelevant to whether the judgment should be included in net worth. 72 

However, the McCulloughs’ own expert, Mr. Melton, testified that FASB Section 450-20- 

55-12 requires consideration of six factors in assessing the probability of a loss, 73 

including the “progress of the case,” and “any decision of the entity’s management as to 

how the entity intends to respond to the lawsuit, claim, or assessment.” That the 

72 Motion to Review, p. 11. 

73 RR, Vol. 5 of 6, p. 52-54; Exhibit 7, p. 151-52. 


McCulloughs are appealing the entire judgment and intend to appeal to invalidate the 

entire judgment are made relevant by these factors established by FASB. 

The McCulloughs argue that since SMA did not present a CPA expert to 

challenge the testimony of their experts, Melton and Thomas, i.e., play the role of Dan 

Jackson in the Anderton decision, the trial court was bound to accept their experts’ 

opinions. In support of this argument, the McCulloughs cite to the Texas Supreme 

Court’s decision in City of Keller v. Wilson, 168 S.w.3d 802, 814 (Tex. 2005) for the 

proposition that an appellate court conducting a legal sufficiency review cannot 

“’disregard undisputed evidence that allows of only one logical inference.” The 

evidence on net worth is not undisputed, it is highly disputed. It was contradicted by 

the McCulloughs’ own witnesses, by their counsel, and through cross examination of 

their witnesses and evidence. The evidence does not allow of only one logical inference. 

The trial court had before it both the controlling decision, Anderton, which 

dictates that a contingent judgment liability is counted in the net worth determination, 

and the GAAP analytical framework and testimony and documentary evidence from 

which the trial court concluded, using the GAAP framework, that it did not have 

sufficient evidence to warrant a finding that $365,000.00 of the underlying judgment 

was likely to occur. The trial court received evidence that the McCulloughs were 

appealing the entire judgment, and that McCullough did not think he owed anything to 

SMA. The trial court considered Ms. Shilling’s advice that at least $365,000.00 was 

owed and discounted it, given the inconsistency of the McCulloughs’ legal positions 

and the circumstances under which Ms. Shilling gave her advice, namely in an effort to 


educe the supersedeas bond. Based on this record, the trial court’s decision to exclude 

any portion of the contingent money judgment is not an abuse of discretion and is 

supported by legally and factually sufficient evidence. 

B. The tax liabilities were properly excluded. 

In FOF No. 14 through 17, the trial court found the estimated tax liabilities of 

$35,000.00 and $18,000.00 included in the McCulloughs’ statement of financial condition 

were not current liabilities and were not probable liabilities, the amount of which can be 

reasonably estimated, applying applicable accounting standards. Thomas Stewart 

testified that the McCulloughs will owe around $30,000.00 74 in taxes related to the 

money the jury found McCullough misappropriated. 75 Stewart’s explanation of the 

$18,000.00 tax liability made no sense. Stewart testified that an $18,000.00 tax liability 

resulted from the excess of the McCulloughs’ liabilities over their assets. 76 

Stewart testified that the $35,000.00 of income taxes is “a culmination of the years 

disclosed in Mr. Wilson’s report, 77 whatever years those happen to be.” 78 Stewart 

testified that if McCullough filed a tax return reporting the income that SMA’s expert, 

Mr. Wilson, testified to at trial that he had misappropriated, McCullough would have a 

$30,000.00 tax liability. 79 Stewart conceded that the tax liability is based on a 

contingency that has not occurred, namely filing a tax return disclosing the receipt of 

74 Stewart never explained what the additional $5,000.00 was for and he frequently admitted the 

$35,000.00 was for taxes on the undisclosed income. 


76 RR, Vol. 5 of 6, p. 64-65; 74-75. 

77 Robert Wilson was SMA’s accounting expert at trial. 




the misappropriated funds. 80 Stewart admitted that the $35,000.00 would only be due 

to the IRS if McCullough filed a tax return reporting this additional income. 81 

On cross examination, Stewart acknowledged that the $18,000.00 is not currently 

owed to the IRS. 82 Stewart admitted that the $18,000.00 tax bill is based on a “scenario 

that he would pay if he realized all of the value of his assets and took into account his 

basis in those assets and the liabilities that he owed.” 83 Stewart testified the 

presumption for this scenario is that McCullough would liquidate his assets, which has 

not occurred. 84 Stewart also admitted that in order for his calculation to make sense, the 

$365,000.00 judgment that is being appealed would have to be paid. 85 Stewart 

acknowledged that there was no offer to pay the $365,000.00. 86 Stewart also 

acknowledged being aware that McCullough has the right to shelter some of his assets 

under exemptions available under Texas Property Code statutes. 87 

Under this record, it is not surprising that the trial court found that Stewart’s 

testimony lacked credibility. 88 These tax liabilities were based on contingencies that 

have not occurred. The trial court is not required to accept Stewart’s estimated tax 

liabilities once the Court heard additional testimony that the McCulloughs had not filed 

an amended tax return and were not selling their assets. Both tax liabilities were 









88 FOF No. 15. 


dependent on events that were not shown as probable. The evidence that contradicted 

these liabilities came from the McCulloughs’ own witnesses. 

C. The trial court did not err by assessing net worth as of June 30, 2011, 

the date of the McCulloughs’ sworn statement of financial condition. 

The McCulloughs argue that after June 30, 2011, the date of their net worth 

affidavits, their financial condition changed and the trial court did not consider that 

change when finding net worth in the net worth contest. The McCulloughs claim that 

their net worth decreased, in large part, because they posted cash in lieu of a bond in an 

attempt to supersede the judgment. The premise of this argument is that Texas Rule of 

Appellate Procedure 24 requires the Court to consider changes in net worth after the net 

worth affidavit is filed in ruling on a contest of net worth. This premise is faulty. 

Section 52.006 of the Texas Civil Practice and Remedies Code and Rule 24.2 of the 

Texas Rules of Appellate Procedure govern the amount of supersedeas bond required 

by the trial court. The statute and rule create a two-step process for evaluating the 

judgment debtor’s financial condition. The first step is the determination of net worth. 

Net worth is determined as of the date of the filing of the net worth affidavit and initial 

security deposit. See TEX. CIV. PRAC. & REM. CODE § 52.006(b); TEX. R. APP. P. 24.2(a)(1) 

and (c)(1). The procedure for contesting the judgment debtor’s net worth is focused on 

contesting the net worth claimed by the judgment debtor when he filed his net worth 

affidavit. Once a contest is filed, the judgment debtor is required to prove the net worth 

the judgment debtor claimed when he filed his net worth affidavit. TEX. R. APP. P. 

24.2(c)(3). 


Once the contest is resolved and the court finds the judgment debtor’s net worth, 

Section 52.006 and Rule 24.2 provide a mechanism for the trial court to consider changes 

in the financial condition of the judgment debtor after the net worth affidavit was filed. 

Section 52.006(c) provides: 

On a showing by the judgment debtor that the judgment debtor is likely to 

suffer substantial economic harm if required to post security in an amount 

required under Subsection (a) or (b), the trial court may lower the amount 

of the security to an amount that will not cause the judgment debtor 

substantial economic harm. (emphasis added). 

Rule 24.2(b) provides: 

The trial court must lower the amount of security required (a) to an amount 

that will not cause the judgment debtor substantial economic harm if, after 

notice to all parties and a hearing, the court finds that posting a bond, 

deposit, or security in the amount required by (a) is likely to cause the 

judgment debtor substantial economic harm. (emphasis added). 

Section 52.006(c) and Rule 24.2(b) require the trial court to reduce the required 

security based on changes in the judgment debtor’s financial condition after the filing of 

the net worth affidavit, if posting 50% of the judgment debtor’s net worth will cause 

substantial economic harm. The judgment debtor does not receive a dollar-for-dollar 

reduction in the security based on a decrease in net worth occurring after the net worth 

affidavit is filed. And the judgment debtor likewise does not receive a reduction in the 

required security by claiming a decrease in net worth due to posting security to 

supersede the judgment. The result would be absurd. The clear intent of the statute 

and rule is to provide a mechanism for relief, but only upon meeting a high standard: 

“substantial economic harm.” The McCulloughs’ complaint about changes in their 


financial condition must be evaluated under this standard. The trial court did not err in 

rejecting the McCulloughs’ argument on their alleged change in financial condition. 

D. The trial court did not err in concluding that the McCulloughs will 

not suffer substantial economic harm if required to post additional 

security. 

The judgment debtor has the burden of proving that posting the required 

security will cause substantial economic harm. Ramco Oil & Gas, Ltd. v. Anglo Dutch 

(Tenge) L.L.C., 171 S.W.3d 905, 910 (Tex. App. – Houston [14 th Dist.] 2005, orig. 

proceeding). The following rules apply to an argument for abuse of discretion based on 

legally insufficient evidence: 

 

 

 

 

the McCulloughs must demonstrate that the evidence conclusively 

establishes, as a matter of law, all vital facts in support of their 

position; 

the Court must consider the evidence in the light most favorable to 

the challenged finding and indulge every reasonable inference that 

would support it; 

the Court must determine whether the evidence before the trial 

court would enable reasonable and fair-minded people to find the 

facts at issue; and 

the trial judge is the sole judge of the credibility of the witnesses 

and the weight to give to their testimony. Ramco, 171 S.W.3d at 910. 

The following rules apply to an argument for abuse of discretion based on factually 

insufficient evidence: 

 

 

the Court must examine the entire record, considering both the 

evidence in favor of, and contrary to, the challenged findings; 

after considering and weighing all of the evidence, the challenged 

finding is to be set aside only if it is so contrary to the 


overwhelming weight of the evidence to be clearly wrong and 

unjust; 

Id. 

 

 

the trier of fact is the sole judge of the credibility of the witnesses 

and the weight to be given to their testimony; and 

the Court may not substitute its judgment for that of the trier of 

fact, even if it would reach a different answer on the evidence. 

In Ramco, the Court of Appeals provided examples of the required inquiry in 

evaluating whether posting the required security would cause substantial economic 

hardship: 

How much cash or other resources would it take to post a supersedeas bond in the 

amount in question? Does the judgment debtor have sufficient cash or other 

assets on hand to post a supersedeas bond in this amount or to post a deposit in 

lieu of bond in this amount? Does the judgment debtor have any other source of 

funds available? Does the judgment debtor have the ability to borrow funds to 

post the requisite security? Does the judgment debtor have unencumbered assets 

to sell or pledge? What economic impact is such a transaction likely to have on the 

judgment debtor? Would requiring the judgment debtor to take certain action 

likely trigger liquidation or bankruptcy or have other harmful consequences? 

These are the sort of inquiries that tend to reveal whether a judgment 

debtor is likely to suffer substantial economic harm. 

Ramco, 171 S.W.3d at 917 (emphasis in original). 

The trial court’s findings addressed the inquiries described in Ramco. The trial 

court found that the McCulloughs have “sufficient unencumbered cash and other assets 

on hand to be able to post a bond or cash deposit for an additional $209,000.00” and 

then proceeded to delineate the sources of those funds. The trial court found the 

McCullough still had between $51,000.00 and $64,154.00 in cash. The finding of a low 

end of $51,000.00 is based on McCullough’s testimony that he had “somewhere around 


51-nine” 89 and “roughly” $51,000.00 remaining. 90 The finding of the high-end is based 

on the statement made by the McCulloughs on page 3 in their motion for reduction of 

cash deposit. 91 Thus, the McCulloughs’ challenge to this finding is without merit since 

there is evidence in the record to support the finding. McCullough also testified that he 

was not living on savings, but rather was living on his income. 92 The trial court found 

the McCulloughs had $312,900 in retirement accounts, a figure that is not disputed and 

derives from the McCulloughs’ net worth affidavit. 93 The trial court found that the 

McCulloughs had $100,000.00 in personal effects and jewelry, again a figure that is not 

disputed and is derived from the McCulloughs’ net worth affidavit. The trial court 

noted that the McCulloughs have other assets that are less liquid, including one that 

was being liquidated for litigation expenses. 94 

McCullough testified that he had sufficient assets to pay the $209,000.00: 

Q. Well, there’s enough money, between your cash and you and your retirement 

accounts, to post $209,000, correct? 

A. If I liquidated it and paid the income taxes, that’s possible. 95 

The trial court also found that the McCulloughs have the ability to borrow to 

contribute toward the additional security required, including $44,000.00 in available 

credit on a line of credit loan. 96 This finding was supported by McCullough’s 



91 SCR 273. 


93 See Motion for Reduction of Cash Deposit, p. 4; SCR 274. 

94 FOF No. 22. 


96 FOF No. 25. 


testimony. 97 The trial court also found that McCullough could borrow against his 401K 

retirement plan, although McCullough testified that he made no effort to borrow money 

to post security for the judgment. 98 

The trial court assessed whether posting an additional $209,000.00 would deprive 

them of funds to pay for litigation expenses. The trial court found that McCullough had 

testified he had a buyer for his Inland Diversified Real Estate Trust, Inc. asset (valued at 

$55,600.00) (“Inland asset”) and that he intended to use the proceeds of that sale to pay 

legal expenses for the appeal. 99 

The trial court then assessed the McCulloughs’ ability to maintain their standard 

of living if they had to liquidate some of their assets to pay the additional security. The 

trial court found the McCulloughs made in excess of $300,000.00 per year collectively, 

McCullough as an executive at Frost Insurance Agency and his wife as a teacher. 100 

These findings are supported by McCullough’s testimony. 101 The trial court made 

findings of the amounts deposited in their primary checking account between July 2010 

and October 2011, totaling $391,206.70, with an average monthly deposit of 

$26,080.45. 102 These findings were supported by McCullough’s testimony and a 

summary of bank statements. 103 The trial court found that, considering all funds and 

loans available to the McCulloughs, posting an additional $209,000.00 would leave the 


98 FOF No. 25. See McCullough testimony at RR, Vol. 6 of 6, p. 67. 

99 FOF No. 22. 

100 FOF No. 23. 

101 See McCullough’s testimony at RR, Vol. 6 of 6, p. 48, 58-59. 

102 FOF No. 24. 

103 See McCullough’s testimony at RR, Vol. 6 of 6, p. 49-57; Exhibits 1 and 2. 


McCulloughs with two homes, three cars, all of their personal effects and jewelry, more 

than half of their retirement accounts, funds for litigation expenses, and substantial 

income to pay for living expenses and to maintain their standard of living. 104 This 

finding is not challenged and is supported by the McCulloughs’ net worth affidavit and 

McCullough’s testimony. 

The trial court also considered that during 2011, through September, the 

McCulloughs had given away $90,000.00 of their assets to third parties. 105 This finding 

is not challenged. 

Turning to the McCulloughs’ specific arguments, the McCulloughs first argue 

cash on hand is insufficient to post security. As discussed above, the trial court’s 

finding that the McCulloughs had between $51,000.0 and $64,154.00 in cash is 

supported by the record. Rule 24.2 does not require a judgment debtor to meet his 

security requirement out of cash alone, so the argument that the McCulloughs do not 

have enough cash on hand to pay the additional security is without merit. In passing, 

the McCulloughs argue that using all of their cash to pay the additional security would 

deprive them of their ability to meet their other personal and legal financial obligations. 

The McCulloughs do not cite to the record to support this argument. As found by the 

trial court, and supported by the record discussed above, the McCulloughs have ample 

assets and earning power to meet their personal and legal financial obligations. 

104 FOF No. 26. 

105 FOF No. 12. 


Second, the McCulloughs argue that they should not be required to use exempt 

assets to post the additional security. The McCulloughs rely on Texas Bank & Trust Co. 

v. Teich, 287 S.W. 666 (Tex. Civ. App. – Austin 1926, orig. proceeding) and Boone v. 

McBee, 280 S.W.295 (Tex. Civ. App. –Austin 1926, orig. proceeding) to support their 

argument. Those cases are inapposite. Both cases were aptly described by the Texas 

Supreme Court in Pinchback v. Hockless, 164 S.W.2d 19, 20 (Tex. 1942): 

There are authorities which hold that a party in order to secure the benefit 

of the various rules permitting him to prosecute a suit and to secure his 

right under an affidavit of inability to pay the costs, or give security 

therefor, is not required to either sell or encumber exempt property for the 

purpose of procuring money for the payment of such costs. [citing Boone 

and Texas Bank & Trust, among cases]. We do not think that such a rule 

can be laid down as a hard and fast one applicable alike in all cases. 

The legal principles involved in Boone and Texas Bank & Trust Co. are not 

applicable to this case. In Boone and Texas Bank & Trust Co., the concern was allowing a 

truly indigent person to prosecute an appeal without a cost deposit. Here, the concern 

is whether to suspend enforcement of a judgment pending appeal. The balance struck 

by the legislature with regard to suspending enforcement of a judgment is that if a 

judgment debtor wants to suspend enforcement, he must post security measured by all 

of his assets, not just non-exempt assets. If, on the other hand, the judgment debtor 

does not want to post some of his exempt assets as security, he can rely on his 

exemptions and shelter exempt assets as the judgment creditor seeks to enforce the 

judgment. The judgment debtor does not lose his exemption rights, he just has to chose 

how he wants to protect himself, through supersedeas or exemptions. 


The plain language of Section 52.006 and Rule 24.2 is that all assets are 

considered in determining net worth so as to set the required security. Had the Texas 

legislature or the Texas Supreme Court meant to exclude exempt assets from the 

security analysis, they could have easily done so. They did not. 

When the McCulloughs filed their net worth affidavits, they did not exclude 

exempt assets from the net worth calculation. The fact that they did not exclude exempt 

assets from their net worth affidavits reveals that they understand Texas law includes 

exempt assets in the net worth analysis. It was only when they lost the net worth 

contest that they raised this argument. 

The McCulloughs argue that they would be harmed by taking money out of their 

retirement accounts because they would incur substantial penalties and tax liabilities. 

The McCullough’s CPA, Mr. Stewart, testified that if the McCulloughs take an early 

distribution from a retirement plan, they would pay a 10 percent penalty. 106 Of course, 

McCullough could borrow against his 401K plan in order to avoid taking a distribution. 

McCullough admitted he could borrow against the 401K plan, but he had not made any 

effort to do so. 107 The amount of any penalty is unknown since it depends on how 

much is taken from the retirement plan as a distribution and not a loan after all other 

available funds are used to meet the $209,000.00 additional security requirement. The 

amount of any penalty is important because the test is not “economic harm;” it is 

“substantial economic harm.” Rule 24.2 accepts subjecting economic harm on the 




judgment debtor. It is only substantial economic harm that requires an adjustment to the 

required security. The McCulloughs failed to carry their burden of demonstrating that 

they will suffer substantial economic harm if they are required to invade their 

retirement plans to fund the additional security. 

The McCulloughs argue that they should not be required to sell their $100,000.00 

in personal property, some of which may be exempt, and that in any event, the 

$100,000.00 figure is high and one of the three cars comprising the $100,000.00 in 

personal property has a $16,000.00 loan against it. The exemption argument fails for the 

same reasons discussed above. The $100,000.00 value is the McCulloughs’ value from 

their net worth affidavits. 108 As for the argument about a $16,000.00 loan, the 

McCulloughs have not cited to the record to support their argument and the net worth 

affidavits do not list that liability. 109 

The McCulloughs argue that they should not be required to sell their personal 

effects (which they ask the Court to infer are everyday household and personal items). 

But, they offer no authority to support their argument. Rule 24.2 does not differentiate 

between assets. Assets are assets for purposes of the net worth calculation and the 

McCulloughs have not shown that they will suffer substantial economic hardship if the 

are required to sell some, or all, of these assets. Whether these assets must be sold to 

raise money to pay the additional security depends on how much other assets are used 




to pay the additional security. The McCulloughs failed to show that they will suffer 

substantial economic harm. 

Third, the McCulloughs argue that the trial court should not consider the Inland 

asset because McCullough testified he was trying to sell the asset in order to pay 

continuing legal expenses. The trial court found that the McCulloughs have an asset 

that is being liquidated to pay litigation expenses. 110 McCullough testified that he has a 

buyer for this asset, 111 which is valued at $55,600.00. 112 McCullough testified he 

intended to liquidate this asset and use the proceeds to pay for litigation and appeal 

costs. 113 

The McCulloughs’ argument that the Court should not consider the Inland asset 

in determining if the McCulloughs can post $209,000.00 without suffering substantial 

economic harm is a curious one because it illustrates the choices available to the 

McCulloughs. There is no dispute that the Inland asset is non-exempt. If $51,000.00 in 

cash, $44,000.00 in borrowing on the Frost line of credit, and $55,000.00 in Inland asset 

value were used toward the $209,000.00 additional security requirement, that would 

reduce the amount remaining to be raised to $59,000.00. That amount could be raised 

by either loans or liquidations of the $312,000.00 in retirement accounts, resulting in a 

small invasion of the exempt retirement accounts. Then, litigation costs could be paid 

out of retirement funds or current income. Or, the Inland asset, which is non-exempt, 

could be used to pay litigation costs. If the McCulloughs want to use a non-exempt 

110 FOF No. 22. 

111 RR, Vol. 6 of 6, p. 13 – 15; 63-64. 




asset to pay litigation costs, they are forcing a greater use of exempt assets to post the 

additional security. In any event, the trial court found that the McCulloughs could 

meet the $209,000.00 additional security requirement without depriving them of funds 

for litigation expenses by leaving the Inland asset available to fund litigation costs. 

The McCulloughs contend that McCullough’s testimony about the sale of the 

Inland asset “provides no support for the trial court’s findings and conclusions that 

Appellants have the actual ability to post the additional security before the time expires 

on their right to do so.” 114 The record is to the contrary. In the motion for reduction of 

cash bond, the McCulloughs represented to the trial court: “Mr. McCullough has 

located a buyer for the Inland Diversified Real Estate Trust and is in the process of 

completing this transaction.” 115 McCullough testified that statement was true. 116 This 

record supports the inference that the Inland asset sale proceeds will be available within 

a reasonable time. 

Fourth, the McCulloughs argue that their personal earnings do not show their 

ability to post the additional security. The earnings were introduced to show that the 

McCulloughs could pay their living expenses and maintain their standard of living 

during the appeal without their cash and other assets. 

Fifth, the McCulloughs argue that there is insufficient evidence to support that 

they could borrow to pay the additional security or the trial court’s finding that 

McCullough made no effort to borrow money to post security. McCullough testified 

114 Motion for Review, p. 22. 




that he has a cash value of $2,700 on his life insurance policy and he could possibly 

borrow against that policy. 117 McCullough testified that he was aware he could borrow 

against certain retirement accounts. 118 McCullough also testified that he has a line of 

credit with Frost with available credit of $44,000.00. 119 Finally, the McCulloughs 

misstate the trial court’s finding. The finding was that the McCulloughs have the ability 

to “borrow money to pay towards an additional $209,000.00 in security.” (emphasis 

added) The trial court did not find that the McCulloughs have the ability to borrow the 

entire $209,000.00. 

As for the finding that McCullough made no effort to borrow money in order to 

post security for the judgment, the record reflects that except for a loan from his 

attorney, Jay Cross, McCullough made no effort to borrow money to post security. 120 

McCullough testified that he made no effort to borrow against his retirement 

investments; 121 he made no attempt to borrow against his 401K; 122 he did not attempt to 

borrow money from Frost, rather he attempted to get a bond for the judgment; 123 and he 

has not gone to any banks to borrow money. 124 

Sixth, the McCulloughs argue that posting additional security will have an 

adverse economic impact on them. The McCulloughs question the relevance of the trial 

court’s findings that the McCulloughs will be left with two homes, three cars, all of their 










personal effects and jewelry, more than half of their retirement accounts, funds for 

litigation expenses, and substantial income to pay for living expenses and to maintain 

the McCullough’s standard of living. 125 The relevance is obvious. Even after posting 

the additional security, the McCulloughs will be left with substantial assets and income 

and will be able to continue to maintain their existing standard of living. 

The McCulloughs also question the relevance of the trial court’s findings that the 

McCulloughs gave away $90,000.00, including substantial tithing. Again, the relevance 

is obvious. The McCulloughs would have had more assets available to them had they 

not given their money away while they were facing a substantial liability. 

As for the trial court’s finding that while the McCulloughs have historically paid 

the college and other expenses of their adult children, those are not legal obligations 

since the children are adults. 126 The only evidence needed to conclude these are not 

legal obligations is the fact that the children are adults. 

The McCulloughs argue without citation to the record that McCullough testified 

that if the McCulloughs were required to post the additional $209,000.00 security, they 

would be unable to do so. 127 This statement is directly contradicted by McCullough’s 

testimony that he could pay the additional $209,000.00 from cash and retirement 

accounts. 128 

125 FOF No. 26. 

126 FOF 13 (sic), on p. 8 of the Order on Supersedeas Bond. 

127 Motion to Review, p. 27. 



E. Arguments on the merits of the underlying appeal are irrelevant to the 

security issue. 

From page 28 to 33 of their Motion to Review, the McCulloughs attempt to argue 

the merits of their underlying appeal instead of what is currently before the Court— the 

supersedeas issues. The McCulloughs cite no authority for such an approach to the 

security issue. Rule 24.4 defines the scope of appellate review from the trial court’s 

decisions on the net worth contest and the motion for reduction of security. The 

grounds for reversal of the underlying judgment are not within the scope of appellate 

review defined in Rule 24.4. 

Since the McCulloughs’ attempt to raise their appellate issues in this setting is 

improper, SMA will defer briefing the appellate issues until it files its Appellees’ brief in 

the main appeal. SMA does not agree with or acquiesce in any of the arguments made 

by the McCulloughs. The McCulloughs advanced the same arguments on the merits to 

the trial court and SMA responded with briefs demonstrating that the relief afforded by 

the trial court was proper and did not constitute a double recovery or violate an election 

of remedies. 

VI. 

CONCLUSION 

The McCulloughs are needlessly litigating an issue that was previously 

determined by this Court in Anderton. On a well-developed record, and detailed 

findings of fact and conclusions of law, the trial court determined that the 

McCulloughs’ net worth was $743,600.00. Since the McCulloughs had already posted 

$162,800.00 of this amount by a cash deposit, the trial court correctly ordered the 


McCulloughs to post an additional $209,000.00. The trial court’s findings are supported 

by legally and factually sufficient evidence. The trial court heard the testimony of the 

McCullough’s witnesses and was in the best position to judge their credibility and to 

assess how much weight, if any, to give to their testimony. The trial court’s conclusions 

of law and orders comply with existing legal principles regarding security for 

suspension of enforcement of a judgment. This Court should affirm the Order on 

Supersedeas Bond and deny the Motion to Review. 

Respectfully submitted, 




Brian P. Shaw 





Telephone (214) 780-1400 

Telecopy (214) 780-1401 

COUNSEL FOR APPELLEES 

CERTIFICATE OF SERVICE 

A true copy of the foregoing response was served on February 8, 2012, on 

Appellants’ counsel, Kathryn L. Shilling, 8117 Preston Road, Suite 300, Dallas, Texas 

75225, and Cary J. Cross, 545 E. John Carpenter Freeway, Suite 300, Irving, Texas 75062, 

via U.S. Mail, certified, return receipt requested, and via e-mail. 


Brian P. Shaw 


APPENDIX 

A. Order on Supersedeas Bond 

B. Opinion in Anderton v. Cawley, 326 S.W.3d 725 (Tex. App. – Dallas 2010, 

orig. proceeding) 

C. The McCullough’s sworn financial statement 


CAUSE NO. 416-02008-2009 



and § 


ASSOCIATES FINANCIAL SERVICES, INC., § 

v. 

Plaintiffs, 

ROBERT L. McCULLOUGH 

and 

JULIA T. McCULLOUGH, 

Defendants. 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

IN THE DISTRICT COURT 

416th JUDICIAL DISTRICT 

COLLIN COUNTY, TEXAS 

ORDER ON SUPERSEDEAS BOND 

Plaintiffs' Contest of Defendants' Net Worth and Defendants' Motion for 

Reduction of Cash Deposit were heard by the Court. The Court, after considering the 

parties' court filings, evidence admitted and the argument of counsel, makes the 

following findings, conclusions, and orders. 

FINDINGS OF FACT 

1. On August 16, 2011, Defendants filed with the Court the Affidavits of 

Robert L. McCullough, Julia T. McCullough and Thomas Stewart, together with the 

Financial Statement and Accountants' Compilation Report dated June 30, 2011. The 

Financial Statement states the assets, liabilities and net worth of Robert and Julia 

McCullough are as follows: (a) assets - $l,235,600.ooj (b) liabiHties - $892,000.00; (c) 

estimated income tax liability - $18,000.00; and (d) net worth - $325,600.00. 

APPENDIX 11 AU 

ORDER ON SUPERSEDEAS BOND - PAGE I 

331

2. On August 25, 2011, Plaintiffs filed a Contest of the McCullough's net 

worth. 

3. On November 11 and 29, 2011, the Court conducted hearings on Plaintiffs' 

Contest of Defendants' net worth and Defendants' Motion for Reduction of Cash 

Deposit. 

4. In open court, Plaintiffs' counsel advised the Court that Plaintiffs were 

only challenging the inclusion of the following liabilities in the calculation of net worth: 

(a) $365,000.00 "judgment payable;" 

(b) $35,000.00 "income taxes -current balancei" and 

(c) $18,000.00 "estimated income tax." 

5. The $365,000.00 judgment payable is a portion of the judgment entered by 

this Court in this case on July 14, 2011. 

6. The Court has considered the accounting standard.s established by the 

Financial Accounting Standards Board for accruing a liability in an individuars 

financial statement for the PUl'pose of calculating net worth. 

Under applicable 

accounting standards, a liability must be accrued when it is probable that a liabHity has 

been incurred and the amount of the loss can be reasonably estimated and a liability is 

probable when future events are likely to occur. 

7. The Court finds the $365,000.00 judgment payable listed in the Financial 

Statement of the McCulloughs is a contingent judgment liability. 


332

---_.......----..............- __ __ - 

........_---------------.................................... ....... .............................. 

8. The McCulloughs have treated the judgment in this case as a contingent 

liability as reflected in the Confidential Financial Statement attached as Exhibit B-5 to 

the Affidavit of Robert L. McCullough. 

9. The McCullough:; have filed a notice of appeal giving .notice of their 

appeal from the July 14, 2011, Judgment. 

10. The McCulloughs have filed a docketing statement with the Dallas Court 

of Appeals indicating theil' intent to appeal all awards made in the Judgment. 

11. . Robert McCullough testified in deposition and in open C0urt that he 

intended to appeal the entire Judgment and seeks to invalidate the entire Judgment. 

12. The McCulloughs have not conceded that they owe any portion of the 

Judgment. 

13. The McCulloughs have failed to carry their burden of proving that 

$365,000.00 of the Judgment entered in this case is a current liability of the 

McCulloughs. The Court finds the Judgment in this case is not a probable liability the 

amount of which can be reasonably estimated, applying applicable accounting 

standards. 

While the Court heard testimony that Defendants' counsel, Kathryn 

Shilling, told Robert McCullough and the McCullough's CPA Thomas Stewart that it 

was likely that the McCullough:; would owe Plaintiffs around $365,000.00 in this casc, 

the Court also heard Robert McCullough's testimony that he was appealing the entire 

judgment, that he would not concede that he owes $365,000.00 to Plaintiffs and that he 

has not filed an amended tax return reporting as income the money the jury found he 

misappropriated from Plaintiffs. In making the above finding, the Court has considered 

ORDBJ~ ON SVI)ERSEDEAS BOND - PAGE 3 

333

the circumstances existing at the time of Shilling's advice to her client, namely that 

Shilling's advice was given in connection with an effort to reduce the supersedeas bond 

that would otherwise be required and the inconsistency between Shilling's advice and 

the legal position taken by the McCulloughs by appealing the entire judgment and the 

McCulloughs' own treatment of the Judgment as a contingent liability. 

14. The Court finds that the McCulloughs have failed to cany their burden of 

proving that the income tax liabilities listed in the Financial statement totaling 

$53,000.00 are current liabilities. The Court finds that the income tax liabilities listed in 

the Financial statement are not current liabilities of the McCulloughs. The Court finds 

the income tax liabilities are not probable liabilities the amount of which can be 

reasonably estimated, applying applicable accounting standards. 

15. The Court did not find Thomas Stewart's testimony regarding the tax 

liabilities to be credible. Stewart's estimates of tax liability are based on contingencies 

that have not occurred. 

16. Stewart testified the income tax liability of $35,000.00 was primarily for 

taxes, penalties and interest that would be due on the moneys the jury found were 

misappropriated by Robert McCullough from Plaintiffs. However, the 'McCulloughs 

have appealed the Judgment, induding the findings of misappl'opria~ion 

and the 

McCulloughs have not filed an amended tax return. reporting the misappropriated 

moneys as income. 

17. Stewart testified the estimated income tax liability of $18,000:.00 was based 

on the differences in value between the assets and liabilities as if all assets were sold. 

ORDER ON SUI'ERSEDEAS BOND - PAGE 4 

334

However, Stewart and Robert McCullough testified that the McCulloughs were not 

selling their assets. 

18. The Court finds that the McCulloughs' current net worth is $743,600.00. 

In making this finding, the COUl't has deducted from Defendant's liabilities reflected in 

their Financial Statement the following liabilities: (a) $365,000.00 represented in 

Defendants' Financial Statement as "Judgment Payable;" (b) $35,000.00 represented in 

Defendants' Financial Statement as "Income Taxes - Current Balance"; and (c) 

$18,000.00 represented in Defendants' Financial Statement as "Estimated Income Tax." 

19. The Court finds that it is not likely the McCulloughs will suffer substantial 

economic harm if required to post a total supersedeas bond of $371,800.00, which is 50% 

of $743,600.00. 

20. The McCulloughs have already posted $162,800.00 as a cash deposit to 

supersede the Judgment. In order to post a supersedeas bond equal to 50% of the 

McCuIloughs' net worth, they will be required to post an additional bond or cash 

deposit of $209,000.00. 

21. The McCulloughs have sufficient unencumbered cash 01' qther assets on 

hand to be able to post a bond or cash deposit for an additional $209,000.00. Without 

limitation, the McCulloughs have between $Sl,OO(J.Q01 and $64,154.00 2 in cash, 

$312,900.00 in retirement accounts, and $100,000.00 in personal effects and jewelry. The 

I This amount was testified to by Robert McCullough at the hearing. 

Z This amount is listed in Defendants' Motion for Reduction ofC8sh Deposit. 


335

McCulloughs have additional assets that are less liquid and one asset that is being 

liquidated to pay for litigation expenses (discussed below). 

22. The requirement that the McCullough.'J post an additional $209,000.00 in 

bond or cash deposit will not deprive the McCulloughs of funds to pay for their 

litigation expenses, induding the appeal fmm the Judgment. 


testified he had a buyer for their Inland Diversified Real Estate Trust, Inc. asset (valued 

in the Financial Statement at $55,600.(0) and he intended to use the proceeds of that sale 

to pay their legal expenses for the appeal. 

23. In addition to the assets they have accumulated, the McCulIoughs have 

jobs that contribute in excess of $300,000.00 in income per year. Robel'fMcCullough is 

employed by Frost Insurance Agency as an executive and earns in excess of $250,000.00 

pel' year. Julia McCullough is a school teacher earning around $50,000 pel' year. 

24. The McCulIoughs maintain numerous bank accounts. Robert McCullough 

testified that the primary checking account they use is Account No. 0069-8860-0305 at 

Bank of America. The Court finds the following deposits were made into that account 

between July 2010 and October 2011: 

7/10/10 - 8/10/10 

8/11/10 - 9/9/10 

9/10/10 -10/7/10 

10/8/10 -11/05/10 

11/6/10 -12/10/10 

12/11/10 -1/07/11 

1/8/11-2/4/11 

2/5/11 - 3/10/11 

3/11/11 ~ 4/8/11 

4/9/11- 5/9/11 

5/10/11 - 6/9/11 

$27,546.32 

$31,137.67 

$30,65289 

$24,787.16 

$22,062.69 

$22,700.48 

$23,090.51 

$44,454.42 

$27,566.92 

$20,268.20 

$23,336.86 


336

6/10/11 -7/8/11 

7/9/11-8/10/11 

8/11/11- 9/9/11 

9/10/11 -10/7/11 

TOTAL 

$28,859.43 

$25,402.94 

$14,870.37 

$24,469.83 

$391,206.70 

The Court further finds the avet'age deposit per month made during this time period 

was $26,080.45. The Court finds that the McCulloughs have sufficient demonstrated 

earning capacity to pay for their living expenses and to maintain a very comfortable 

standard of living. The Court finds that the McCulloughs will not have to invade their 

earnings to post an additional $209,000.00 in security. 

25. The Court finds that the McCulloughs have the ability to borrow money to 

pay towards an additional $209,000.00 in security. Robert McCullough testified that he 

has a line of credit loan with $44,000.00 in available credit. McCullough also testified 

that he could borrow against his 401K retirement plan. Robert McCullough testified 

that he has made no effort to borrow money to post security for the Judgment in this 

case. 

26. The Court has considered the economic impact the McCullough's will 

experience if required to use their cash and other assets and available credit to pay an 

additional $209,000.00 in security. The Court finds that, considering all fUi1.d., and loans 

that are available to the McCulloughs, posting an additional $209,000.00 in security will 

leave the McCulloughs with two homes, three cars, all of their personal effects and 

jewelry, more than half of their retirement accounts and funds for litigation expenses 

and substantial income to pay for living expenses and to maintain the McCullough's 

standard of living. 

The Court notes that during 2011, the McCulloughs gifted 


337

$90,000.00 of their assets to third parties ($75,000.00 to one of the McCullough's children 

and Julia McCullough's mother and over $15,000.00 in tithing to their church) through 

September 2011, which reduced the amount of cash that would otherwise be available 

for use as security for the Judgment. 

13. The Court finds that although the McCulloughs have historically paid the 

college and other expenses of their adult children, those expenses are not legal 

obligations of the McCullough since those children are adults. 

CONCLUSIONS OF LAW 

1. The $365,000.00 judgment payable listed in the McCulloughs' Financial 

Statement is a contingent judgment liability and, under Andertol1 v. Cawley, 326 S.W.3d 

725, (Tex. App. - Dallas 2010, mig. proceeding) and other appellate decisions dealing 

with the determination of net worth under Tex. Civ. Prac. & Rem. Code § 52.006(c) and 

Tex. R. App. P. 24, such a liability is not included in the current net worth calculation. 

2. The $35,000.00 and $18,000.00 tax liabilities listed in the McCullough's 

Financial Statement are not current liabilities and, therefore, should not be included in 

the cun'ent net worth calculation. 

3. The net worth of the McCulloughs is $743,600.00. 50% of this amount is 

$371,800.00. Since the McCulloughs have already posted a cash deposit of $162,800.00, 

they must post an additional $209,000.00 to secure the Judgment against enforcement. 

4. It is not likely that posting an additional $209,000.00 in. bond or cash 

deposit win cause the McCuIIoughs to suffer substantial economic harm. 


338

IT IS THEREFORE ORDERED that Defendants shall post additional security in 

the amount of $209,000.00, provided that enforcement of the Judgment will be 

suspended for twenty days after the date of this Order. Should Defendants post the 

additional security required herein within such twenty day period, enforcement of the 

Judgment is stayed. Should Defendants not post the additional security requil'ed herein 

within such twenty day period, the Judgment may be enforced against the Defendants. 

It is further ORDERED that the Post-Judgment Injunction entered on October 6, 

2011, is hereby modified to exclude from the injunction payment of attorney's fees and 

expert's fees, and as modified, the Post-Judgment Injunction is continued in effect until 

further Order of the Court. 

+b- Signed this day of December, 20 


339

Page I 

LexisNexis@ 

LEW ANDERTON AND ANDERTON DEVELOPMENT PARTNERSHIP, L.P., 

Appellants v. WILLIAM R. CAWLEY, INDIVIDUALLY AND AS TRUSTEE OF 

THE BILL CAWLEY 1997 REVOCABLE TRUST, CAWLEY-CASCADE, GP, 

L.L.c., CAWLEY-PB FUNDING, LP, CAWLEY FINANCE, L.L.C., CAWLEY 

FINANCE II, L.L.C., BOT REAL EST ATE, L.L.C., COT REAL ESTATE, L.L.C., 

LONNIE A. EICHINGER AS TRUSTEE OF THE CHRISTOPHER CAWLEY 

1998 IRREVOCABLE TRUST, LONNIE A. EICHINGER AS TRUSTEE OF THE 

KELLY CAWLEY 1998 IRREVOCABLE TRUST, AND MARCUS D. HILES, Appellees 

No.05-10-00693-CV 

COURT OF APPEALS OF TEXAS, FIFTH DISTRICT, DALLAS 

326 S.W.3d 725; 2010 Tex. App. LEXIS 8727 

October 29, 2010, Decided 

SUBSEQUENT HISTORY: 

tion December 10,2010. 

Released for Publica- 

PRIOR HISTORY: [**1] 

On Appeal from the 192nd Judicial District COllli, 

Dallas County, Texas. Trial Court Cause No. 

08-05426-K. 

COUNSEL: For APPELLANT: D. Brent Lemon, Law 

Office of D. Brent Lemon, Dallas, TX; Edward Slayton 

Cox, The Cox Law Firm, Bedford, TX. 

For APPELLEE: James Robert Krause, Lawrence J. 

Friedman, Friedman & Feigel', L.L.P., Dallas, TX; Mike 

A. Hatchell, Locke Lord Bissel & Liddell LLP, Austin, 

TX; Kirsten M. Castaneda, Locke Lord Bissell & Liddell 

LLP, Dallas, TX. 

JUDGES: Before Chief Justice Wright and Justices 

O'Neill and Myers. Opinion By Chief Justice Wright. 

OPINION BY: CAROLYN WRIGHT 

OPINION 

[*726] Opinion By Chief Justice Wright 

Before the Court is appellant Lew Anderton's motion 

to decrease the amount of his supersedeas bond and 

accept notice of cash deposit. See TEX. CIV. PRAC. & 

REM. CODE ANN. § 52.006(d) (West 2008); TEX. R. 

APP. P. 24.4. The trial cOllli rendered judgment awarding 

appellees $ 8,386,849.38. Andelion filed an affidavit 

of net worth reflecting a negative net worth of $ 

6,557,571.43. In calculating his net worth, Andelion included 

the amount of the judgment as a liability. 

Andelion deposited $ 100 and served his notice of cash 

deposit in lieu of a supersedeas bond. Appellee BOT 

Real Estate, L.L.c. objected to Andelion's affidavit of 

net worth. The trial cOllli found Anderton's net wOlih to 

be $ 1,890,168.77 and assessed the bond requirement at 

one-half of that amount. The issue before this Court is 

whether the trial court erred in excluding the judgment 

amount from Andelion's net worth. 

Anderton contends the trial cOUli erred in excluding 

the judgment amount [**2] from his net wOlih because 

it is: (1) contrary to the plain text of the statute; (2) contrary 

to the legislative intent; (3) contrary to the generally 

accepted accounting principles; and (4) contrary to the 

only credible evidence presented at the hearing. We review 

a trial court's determination of the amount of security 

for an abuse of discretion. G.M. Houser, Inc. v. 

Rodgers, 204 S.W.3d 836, 840 (Tex. App.--Dallas 2006, 

no pet.). 

With regard to the amount of a bond that the trial 

cOllli can set to supersede a judgment, section 52.006 of 

the civil practice and remedies code provides, in pertinent 

part, as follows: 

APPENDIX JIB"

326 S.W.3d 725, *; 2010 Tex. App. LEXIS 8727, ** 

Page 2 

(a) Subject to Subsection (b), when a 

judgment is for money, the amount of security 

must equal the sum of: 

(1) the amount of compensatory 

damages 

awarded in the judgment; 

(2) interest for the estimated 

duration of the appeal; 

and 

(3) costs awarded in 

the judgment. 

(b) Notwithstanding 

any other law or rule of 

court, when a judgment is 

for money, the amount of 

security must not exceed 

the lesser of: 

(1) 50 percent of the 

judgment debtor's net 

worth; or 

(2) $ 25 million. 

TEX. CIY. PRAC. & REM. CODE ANN. § 52.006(a) & 

(b) (West 2008). Appellate rule 24.2 states that the 

amount of the security [**3] must not exceed fifty percent 

of the judgment debtor's current net worth. TEX. R. 

APP. P. 24.2 (a)(1)(A). Net wOJih is the difference between 

total assets and total liabilities as determined by 

generally accepted accounting principles. See Rodgers, 

204 S.W.3d at 840. Contrary to Anderton's contention, 

the plain language of the statute does not include a contingent 

money judgment in calculating net worth. 

Andelion contends the legislative intent of section 

52.006 is to shift the focus away from protecting judgment 

creditors and instead to focus on allowing pmiies to 

appeal adverse judgments. If the sole focus was on allowing 

the judgment debtor to appeal, the legislature 

would not impose any supersedeas requirement. The 

legislature struck a balance. The thrust of the inquiry 

under section 52.006 is whether the judgment debtor has 

the ability to meet the supersedeas bond requirement and 

whether doing so is likely to result in substantial economic 

harm. See Ramco Oil & Gas. Ltd. v. Anglo Dutch 

(Tenge) L.L.c., 171 S.W.3d 905, 917 (Tex. 

App.--Houston [14th Dist.] 2005, no pet.). 

[*727] The trial court conducted a hearing on 

BOT Real Estate's contest to Anderton's affidavit of net 

wOJih. At the [**4] hearing, David Harris, C.P.A., testified 

on Anderton's behalf. Harris testified that a money 

judgment should be included on a balance sheet if: (1) 

the underlying litigation occurred on or before the date of 

the financial statement; (2) the likelihood of an unfavorable 

outcome is probable; and (3) the amount of the loss 

can be reasonably estimated. Harris then testified that 

Anderton's attorney told him that it was unlikely 

Anderton would win on appeal. Thus, he argued that the 

conditions were met for including the judgment as a liability 

for purposes of calculating Anderton's net wOJih. 

BOT Real Estate presented the testimony of Dan 

Jackson, C.P.A. He testified that this judgment should 

not be included as a liability. Jackson stated that not including 

this judgment as a liability for net wOJih pUl'pOSes 

is consistent with generally accepted accounting principles. 

Jackson also testified that Anderton's net worth 

could not be ascertained from his balance sheet because 

it did not include any documentation, calculations, descriptions, 

or valuations. 

At the conclusion of the hearing, the trial court said 

that it was allowing further discovery with regard to 

Anderton's assets and noted that [**5] the bond may 

increase if the evidence shows that Andelion undervalued 

his assets. In its order determining Anderton's net 

wOlih, the trial court made the following findings of fact 

and conclusions of law: 

1. The balance sheet attached to Lew 

Anderton's Affidavit of Net Worth filed 

August 25, 2010 is suspect. 

2. Lew Anderton is unceliain as to 

whether or not all assets are listed on the 

balance sheet attached to Lew Anderton's 

Affidavit of Net WOJih filed August 25, 

2010. 

3. The Court declines to include the 

amount of the judgment and interest entered 

in this case as a liability of Lew 

Anderton in determining his net worth 

because it would lead to the illogical result 

that Lew Andelion has a negative net 

worth, when the other information provided 

by Lew Andelion would otherwise 

show that he has a net worth of at least $ 

1,890,168.77. 

4. The Court accepts the testimony of 

Dan Jackson and finds that inclusion of 

the judgment and interest entered in this 

case as a liability of Lew Anderton in determining 

his net worth would not comply 

with generally accepted accounting principles.

326 S.W.3d 725, *; 2010 Tex. App. LEXIS 8727, ** 

Page 3 

5. While the Court finds that the balance 

sheet attached to Lew Anderton's 

Affidavit of Net Worth filed August 

[**6] 25, 2010 is suspect, the COUIt declines 

to ignore it altogether and finds that 

Lew Anderton's net worth is $ 

1,890,168.77. 

The trial cOUit found Jackson's expelt testimony credible. 

Jackson's testimony supports the trial court's determination. 

Accordingly, we conclude the trial court did not 

abuse its discretion in excluding the amount of the judgment 

from Anderton's net wOlth calculation. We affirm 

the trial COUIt's determination as to the amount of the 

supersedeas bond and deny Anderton's motion to decrease 

the amount of his supersedeas bond and accept 

notice of cash deposit. 

CAROLYN WRIGHT 

CHIEF JUSTICE

MR. AND MRS. ROBERT MCCULLOUGH 

FINANCIAL STATEMENT AND 

ACCOUNTANTS' COMPILATION REPORT 

JUNE 3D, 2011 

APPENDIX lie" 

EXHIBIT A 

54


JUNE 30, 2011 

TABLE OF CONTENTS 

COVER PAGE 

TABLE OF CONTENTS 


FINANCIAL STATEMENT 

STATEMENT OF FINANCIAL CONDITION 

NOTES TO FINANCIAL STATEMENT 

PAGE 

1 

:2 

3 

4 

5-6 

55


Mr. and Mrs. Robert McCullough 

Coppell, Texas 

We have compiled the accompanying statement of financial 

condition of Mr. and Mrs. Robert McCullough as of June 30, 2011. 

We have not audited or reviewed the accompanying financial 

statement and, accordingly, do not express an opinion or provide 

any assurance about whether the financial statement is in 

accordance with accounting principles generally accepted in the 

United States of America. 

T. STEWART P.C. 

CERTIFIED PUBLIC ACCOUNTANTS 

2555 SW GRAPEVINE PKWY 

SUITE 100 

GRAPEVINE, TEXAS 76051 

(817) 552-6600 

(817) 552-6610 

WWW.DFWTEXASCPA.COM 

Mitchell L. Frey, CPA 

The individuals are responsible for the preparation and fair 

presentation of the financial statement in accordance with 

accounting principles generally accepted in the United States of 

America and for designing, implementing, and maintaining internal 

control relevant to the preparation and fair presentation of the 

financial statement. 

OUf responsibility is to conduct the compilation in accordance with 

Statements on Standards for Accounting and Review Services 

issued by the American Institute of Certified Public Accountants. 

The objective of a compilation is to assist the individuals in 

presenting financial information in the form of financial statements 

without undertaking to obtain or provide any assurance that there 

are no material modifications that should be made to the financial 

statement. 

We are not independent with respect to Mr. and Mrs. Robert 

McCullough because we performed litigation support services on 

their behalf in Cause No. 416-02008-2009 before the 416 th Judicial 

District, Collin County, Texas. 

Thomas J. Stewart, CPA 

Anna Hardy 

Grapevine, Texas 

August 2, 2011 

Member Of: 

American Institute of Certified Public Accountants • Texas Society of Certified Public Accountan~


STATEMENT OF FINANCIAL CONDITION 

June 30, 2011 

ASSETS 

Cash 

Investments: 

Inland Diversified Real Estate Trust, Inc. 

MLKB Restaurants LLC 

Cash Value of Life Insurance (21,800), Less 

Loans Payable to Insurance Companies (19,100) 

Vested Interest in Retirement Accounts 

Residence 

Other Real Estate 

Personal Effects and Jewelry 

$ 

$ 

162,700 

55,600 

31,700 

2,700 

312,900 

360,000 

210,000 

100,000 

1,235,600 

LIABILITIES 

Income Taxes - Current Balance 

Credit Cards Payable 

Judgment Payable 

Mortgage Payable - Residence 

Mortgage Payable - Other Real Estate 

TOTAL LIABILITIES 

$ 

35,000 

9,000 

365,000 

349,200 

133,800 

892,000 

ESTIMATED INCOME TAX, on the differences between the estimated 

current values of assets and the estimated current amounts of 

liabilities and their tax bases 

NET WORTH 

$ 

18,000 

325,600 

1,235,600 

See accompanying notes and accountants' compilation report 

4 

57

NOTE A - BASIS OF ACCOUNTING 

MR.AND MRS. ROBERT MCCULLOUGH 

NOTES TO FINANCIAL STATEMENT 

June 30, 2011 

The accompanying financial statement includes the assets and liabilities of Robert and 

Julia McCullough. Assets are stated at their estimated current values and liabilities at 

their estimated current amounts. 

NOTE B -INLAND DIVERSIFIED REAL ESTATE TRUST, INC. 

Robert and Julia McCullough own 5,562.28 shares of Inland Diversified Real Estate 

Trust, Inc., a real estate investment trust. The estimated amount included in the 

financial statement is based on the price per share in an initial offering and quoted in the 

broker statement. 

NOTE C - MLKB RESTAURANTS, LLC 

Robert McCullough owns 10% of the LLC units of MLKB Restaurants, LLC, a 

restaurant. The estimated current value of the investment is based on the adjusted tax 

basis Robert McCullough has in the entity. With only a minority interest and no readily 

available market for his interest, the adjusted tax basis of this investment is a reasonable 

estimate of current value. 

NOTE D - LIFE INSURANCE 

At June 30, 2011, Robert McCullough owns two insurance policies with death benefits in 

the amounts of $1,000,000 and $400,000, respectively. At June 30, 2011, Julia 

McCullough owns two life insurance policies with death benefits in the amount of 

$100,000 and $50,000, respectively. 

NOTE E - RESIDENCE 

The estimated current value of the residence is based on current comparable sales of 

similar properties. The residence was purchased in 2007. 

NOTE F - OTHER REAL ESTATE 

The other real estate is comprised of a condominium unit located in Dallas, TX and 

purchased in 2010, and an unimproved lot located in Whitney, TX. The estimated 

current value of $200,000 of the condominium unit is based on current comparable sales 

of similar properties. The estimated value of $10,000 of the unimproved lot is based on 

the land market value as estimated by the county taxing authority for the 2010 tax 

assessment. 

NOTE G - PERSONAL EFFECTS AND JEWELRY 

The amount included in the financial statement is the current value as estimated by 

Robert and Julia McCullough. 

5 

58

NOTE H - MORTGAGE PAYABLE - RESIDENCE 

The mortgage (collateralized by the residence) is payable in monthly installments of 

$2,004 a month, including interest at 5.125% a year through 2037. 

NOTE 1- MORTGAGE PAYABLE - OTHER REAL ESTATE 

The other real estate mortgage payable consists of a mortgage on the condominium unit 

(collateralized by the condominium unit) and is payable in monthly installments of $794 a 

month, including interest at 5.750% a year through 2040. 

NOTE J - JUDGMENT PAYABLE 

Robert and Julia McCullough were involved in a lawsuit with a former employer of 

Robert McCullough. The lawsuit sought payment for amounts the employer asserted 

were not remitted properly to it per their contractual arrangement with Robert 

McCullough. A judgment against Robert and Julia McCullough in the approximate 

amount of $1,265,000 has been assessed at the trial court level. The lawsuit is currently 

in the appeals process. Robert and Julia McCullough have determined that a 

reasonable estimate of the liability after the appeals process is a range between 

$365,000 and $1,265,000. The amount included in the financial statement as an 

accrued liability is the amount deemed to be actual damages, including interest thereon, 

and attorney fees per the judgment and is believed to be the most reasonable estimate 

of the liability. 

NOTE K - ESTIMATED INCOME TAXES 

Estimated income taxes have been provided on the excess of the estimated current 

values of assets and estimated current amounts of liabilities over their tax bases as if the 

estimated current values of the assets and estimated current amounts of liabilities had 

been realized on the statement date, using applicable tax laws and regulations. The 

provision will probably differ from the amount of income taxes that eventually might be 

paid because those amounts are determined by the timing and the method of disposal or 

realization and the tax laws and regulations in effect at the time of disposal or realization. 

The net estimated current values of assets and estimated current amounts of liabilities 

exceeded their tax bases by $15,200 at June 30, 2011. The excess of estimated current 

values of major assets and liabilities over their tax bases are: 

Vested Interest in Retirement Accounts $312,900 

Other Real Estate 28,400 

Judgment Payable 365,000 

NOTE L-SUBSEQUENT EVENTS 

Robert and Julia McCullough have evaluated subsequent events through August 2, 

2011, the date which the financial statements were available to be issued. 

6 

59

Docket Sheet for: 05-11-01303-CV 

of 3 

http://www.5thcoa.courts.state.tx.us/FILES/05/11/05111303.HTM 

6/6/2012 1:51 PM 

5th Court CASE HISTORY for Case Number: 05-11-01303-CV Robert L. & Julia T. 

McCullough v. Scarbrough, Medlin & Associates, Inc, et al 

Date Filed: 09/27/2011 Original Proceeding (Y/N): N 

Reg/Acc: R Type Case: CONTRACT 

Trial Cause#: 416-02008-2009 

Trial Court: 416TH DISTRICT COURT County: COLLIN 

Trial Court Judge: Oldner, Chris 

Trial Ct.Reporter: Maienschein, Sue Trial Court ID: 320430416 

Consolidated/Companion: 

ATTORNEY INFORMATION for Case Number: 05-11-01303-CV 

Code Type Date On Date Off No. Code Represents 

ANT LD 09/28/2011 / / Y ATT ROBERT L. & JULIA T. MCCULLOUG 

000784961 Shilling, Kathryn L. 

APE LD 09/28/2011 / / Y ATT SCARBROUGH, MEDLIN & ASSOCIATE 

024053473 Shaw, Brian P. 

APE RE ATT 01/09/2012 / / Y ATT SCARBROUGH, MEDLIN & ASSOCIATE 

05646600 De La Garza, Leland Curtis 

CLK 09/28/2011 / / N DCK 

000000416 Clerk, Collin District 

CTR 09/28/2011 / / N CTR 

000000416 Maienschein, Sue 

JDG 09/28/2011 / / N JDG 

000000416 Judge, District 

CALENDAR INFORMATION for Case Number: 05-11-01303-CV 

Cal Date Time Reason Or.Arg 

* STAT 07/17/2012 APE BR DUE




6/6/2012 1:51 PM 

01/09/2012 MT STAY ANT / 

01/09/2012 RESP DUE APE / 

01/09/2012 RESPONSE APE / 

01/10/2012 MT STAY ANT / 

01/10/2012 MT TO FILE ANT / 

01/10/2012 RPT REC DUE CTR 01 / 

01/18/2012 XRESP FILED APE / 

01/19/2012 MT STAY DISP ANT DENIED 101 /0263 


01/19/2012 XRESP DISP APE GRANT 101 /0263 

01/23/2012 NO RPT REC CV / 

01/25/2012 SCLK REC FLD / 

02/03/2012 RPT REC FLD / 

02/06/2012 MT STAY ANT / 


02/07/2012 XRPT REC FLD CTR 01 / 


02/09/2012 XRPT REC DSP CTR GRANT 01 101 /0615 

02/13/2012 MT TO FILE ANT / 

02/17/2012 MT TO FILE ANT / 

02/28/2012 MT FILE DISP ANT GRANT 101 /0888 

03/04/2012 BRIEF DUE ANT / 

03/10/2012 RPT REC DUE CTR 01 101 /0615 

03/13/2012 OPINION ISSD DENIED 101 /1169 

03/13/2012 ORD ENTERED DENIED 101 /1168 

03/13/2012 REC RETENTON DESTRY / 

03/16/2012 SRPT REC FLD / 

04/09/2012 NO ANT BR / 

04/10/2012 XBRIEF FILED ANT 01 / 

04/11/2012 CERT CON FLD ANT / 

04/11/2012 LETTER FILED ANT / 



04/16/2012 OPIN TO PUB / 

04/16/2012 XBRIEF DISP ANT GRANT 01 101 /1771 

04/23/2012 SCLK REC FLD / 


* 05/18/2012 BRIEF FILED ANT / 1 

05/18/2012 SCLK REC FLD / 

06/01/2012 XBRIEF FILED APE 01 / 

* 06/04/2012 XBRIEF DISP APE GRANT 01 / 

06/17/2012 BRIEF DUE APE / 

* 07/17/2012 BRIEF DUE APE 01 / 

FEES INFORMATION for Case Number: 05-11-01303-CV 

Pd.Date Fee Type Amount Status Notified 

09/27/2011 FILING 175.00 PAID / / 

01/04/2012 EFILING 4.00 PAID / / 

01/04/2012 MOTION 10.00 PAID / / 

01/09/2012 EFILING 4.00 PAID / / 

01/09/2012 EFILING 4.00 PAID / / 

01/09/2012 EFILING 4.00 PAID / / 

01/09/2012 MOTION 10.00 PAID / / 

01/10/2012 EFILING 4.00 PAID / / 

01/10/2012 MOTION 10.00 PAID / / 

01/18/2012 EFILING 4.00 PAID / / 

01/18/2012 MOTION 10.00 PAID / / 

02/06/2012 EFILING 4.00 PAID / /




6/6/2012 1:51 PM 

02/06/2012 MOTION 10.00 PAID / / 

02/08/2012 EFILING 4.00 PAID / / 

02/13/2012 EFILING 4.00 PAID / / 

02/13/2012 MOTION 10.00 PAID / / 

02/17/2012 EFILING 4.00 PAID / / 

02/17/2012 MOTION 10.00 PAID / / 

04/10/2012 EFILING 4.00 PAID / / 

04/10/2012 MOTION 10.00 PAID / / 

04/11/2012 EFILING 4.00 PAID / / 

04/11/2012 EFILING 4.00 PAID / / 

04/11/2012 EFILING 4.00 PAID / / 

06/01/2012 EFILING 4.00 PAID / / 

06/01/2012 MOTION 10.00 PAID / / 

ARCHIVE INFORMATION for Case Number: 05-11-01303-CV 

Seq How Began Began @Issue Set Submitted 

1 FILING 09/27/2011 / / N / / 

OPINION INFORMATION for Case Number: 05-11-01303-CV 

Search 5th Court Opinions for 05-11-01303-CV 

Case Number Date Evt Proceed Event Descr Dispo. Aut 

05-11-01303-CV 03/13/2012 OPINION ISSD DENIED 

Per Curiam: N Published: Y Date Sent to Opinion Reporter Service: / / 

Date to West Publishing: / / Cite: 

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Please notify Lisa Matz, Clerk of the Fifth Court of Appeals at 214-712-3450 of any errors or 

discrepancies. Email can be addressed to the Court via: theclerk @ 5thcoa.courts.state.tx.us 

* Docket Sheet Information Generated: 06-05-2012 - 03:59:27 

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1 of 9 6/6/2012 1:48 PM 

Case History 

Case Number 416-00247-2012 

Date Filed: 01/20/2012 

Case Type: CV - All Other Civil Cases 

Status: Pending 

Scarbrough, Medlin & Associates, Inc. and 

Scarbrough, Medlin & Associates Financial 

Services, Inc v Bank Of America, N.A., 

Cullen/Frost Bankers Inc., Credit Union Of 

Style: 

Texas, Capital One Bank, N.A., ING Bank, 

FSB d/b/a ING Direct USA, Willie Nell 

Thompson, and Andrea Stroh Thompson, 

District Clerk Of Collin County 

JudicialOfficer: Oldner, Chris in 416th District Court 

Parties 

Type Name DOB Address Attorney 

Defendant McCullough, Julia T Kathryn L Shilling 

Defendant McCullough, Robert 

Kathryn L Shilling 

Plaintiff Scarbrough, Medlin & Associates Financial Services Inc Leland De La Garza 

Plaintiff Scarbrough, Medlin & Associates Inc Leland De La Garza 

Case Events 

Date Event Type Comments 

Cancelled 

Reason 

Time 

Judge 

01/20/2012 Plaintiff's Original Petition (OCA) $258.00 

Application 

For Writ Of 

Garnishment 

After Judgment 

01/20/2012 Request for Writ of Execution $8.00 

01/20/2012 Request for Writ of Garnishment $8.00 

01/24/2012 Writ 

Iss to Hold 

Box 

01/24/2012 Writ 

Iss To Hold 

Box 

01/24/2012 Request for Writ of Garnishment Notice $12.00 

01/24/2012 Notice 

Writ Of 

Garnishment 

-Hold Box 

01/25/2012 Request for Writ of Execution $8.00

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01/25/2012 Request for TRO by Certified Mail $150.00 

Writ Of 

Garnishment 

not TRO 

01/25/2012 Writ issd 

01/26/2012 Notice of Nonsuit 

Without 

Prejudice Of 

Credit Union Of 

Texas 

02/03/2012 Original Answer 

Sworn Written 

Answer of 

Andrea Stroh 

Thompson 

District Clerk of 

Collin County 


02/03/2012 Affidavit 

Application of 

Attorney's Fees 

and Research 

Expenses of 

Andrea Stroh 

Thompson 

District Clerk of 

Collin County 



Of Garnishee 

Capital One, 

National 

Association 

02/17/2012 Motion to Dismiss 

Cullen/Frost 

Bankers & Ing 

Bank d/b/a Ing 

Direct USA 

02/17/2012 Motion to Dismiss 

Agreed Mot to 

Dismiss Capital 

One 


Answer To 

Writ Of 

Garnishment 

03/02/2012 Amended Answer 

03/05/2012 Request for Citation $8.00 x1 

03/05/2012 Request for Temporary Injunction $8.00 x1 

03/05/2012 Motion 

Robert 

McCullough an 

dJulia 

McCulloughs 

Request for Ex 

Parte TRO Writ

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of Injunction 

and Motion for 

Substitution of 

Property and 

Temp 

Injunction 

03/05/2012 Motion - Civil $40.00 

Real Parties in 

Interest Robert 

McCullough's 

and Julia 

McCullough's 

Motion to 

Disolve or 

Modify Writs of 

Garnishment 

03/05/2012 Request for Citation $8.00 

03/05/2012 Request for Writ of Injunction $8.00 

03/05/2012 Application 

for Attorney's 

Fees and Costs 

of Willie Nell 

Thompson 


Sworn Written 

Answer of Willie 

Nell Thompson 

03/05/2012 Citation 

iss 2 cits ret 

frt 

03/05/2012 Writ 

iss 2 writ ret 

to frt 

03/05/2012 Temporary Injunction 

Ex Parte 

TRO/Writ of 

Injunction 

03/06/2012 Plaintiff's 

Motion to 

DissolveTRO 

03/07/2012 Address Change 

03/13/2012 Motion 

To Open And 

Inventory Safe 

Deposit Box 

03/14/2012 Correspondence 

03/15/2012 Response 

to Answer of 

Willie Nell 

Thompsonexhibit 

attached PDF

Search 




to Dissolve or 

modify Writs of 

Garnishments 


to Robert L 

McCullough and 

Julia 

McCullough's 

Request for 

Writ of 

Injunction and 

Motion for Subs 

of Property 

03/19/2012 Temporary Restraining Order Hearing 9:00 AM 

03/19/2012 Hearing 

Writ of 

Garnishment 

9:00 AM 

03/19/2012 Motion Hearing 

For release of 

funds and 

motion to 

inventory a 

safety deposit 

box 

9:00 AM 

03/19/2012 Defendant's 


Interest Robert 

L McCullough's 

& Julia 

McCullough's 

Reply to 

Plaintiffs' 

Response to 

Mot to Disolve 

or Mod Writs of 

Garnishment & 

Mot to Set 

Aside and/or 

Stay Entry of 

Garnishment 

Orders 

03/19/2012 General Docket Entry 

Hearing on TI 

and several 

motions, 

evidence 

received, ROR 

03/19/2012 Order 

To Open And 

Inventory Safe 

Deposit Box 

03/20/2012 Letter 

To Judge 

Oldner from L 

DeLaGarza 

03/21/2012 Letter 

To Judge 

Oldner from 

Leland

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DeLaGarza 

03/21/2012 Letter 

To Judge 

Oldner from K 

Shilling 

03/22/2012 Letter To the Judge 

03/23/2012 Letter 

05/02/2012 Memorandum 

05/07/2012 Intervention $40.00 

Petition in 

Intervention 

05/07/2012 Jury Fee Paid $30.00 

05/07/2012 Order on Motions 

05/09/2012 Correspondence from Court 

05/14/2012 Motion 

To Strike Plea 

In Intervention 


To Counsel 

From L DeLa 

Garza 

05/16/2012 Order of Dismissal 

05/16/2012 Order of Dismissal 

05/18/2012 Letter 


Plaintiff's 

motion to strike 

intervention 

9:00 AM 


Hearing on 

Motion to Strike 

- U/A to 

5/30/2012 

Oldner, Chris 

06/01/2012 Appeals - Notice Of Appeal 

06/01/2012 Motion - Civil $40.00 


interst Robert & 

Julia 

McCullough's 

Emer Mot to 

Stay 

Distribution of 

funds under 

Garnishment 

Order

Search 



06/01/2012 Order 

Striking 

Intervention 


to Real Parties 

in Interest 

Robert & Julia 

McCullough's 

Emerg Mot to 

Stay 

Distribution of 

Funds Under 

Garnishment 

Order 


to Strike Plea 

in intervention 

Cancelled: Reset 9:00 AM 

Financial Summary 

Attorney 

Charges : $10.00 

Payments: $10.00 

Balance : $0.00 

Attorney 




Defendant 




Defendant 




Garnishee 




Garnishee 




Intervenor 




Plaintiff

Search 



Charges : $359.00 



Plaintiff 

Charges : $203.00 



Transactions 

Payor Receipt Date Description Amount 

01/20/2012 Transaction Assessment $258.00 



Shackelford, Melton & McKinney, LLP Receipt # DC-02609-2012 01/20/2012 Payment ($330.00) 


Shackelford, Melton & McKinley, LLP Receipt # DC-03112-2012 01/25/2012 Payment ($24.00) 



Shackelford, Melton & McKinley, LLP Receipt # DC-03124-2012 01/25/2012 Payment ($158.00) 


De La Garza, Leland Receipt # DC-03381-2012 01/26/2012 Payment ($5.00) 


Sandberg, Jeffrey R Receipt # DC-05350-2012 02/09/2012 Payment ($5.00) 


Moeller, Evan A Receipt # DC-06612-2012 02/17/2012 Payment ($5.00) 


Moeller, Evan A Receipt # DC-08492-2012 03/02/2012 Payment ($5.00) 


03/05/2012 Transaction Assessment $8.00

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Kuehne and Shilling LLP Receipt # DC-08594-2012 03/05/2012 Payment ($16.00) 



Kathryn Shilling Receipt # DC-08621-2012 03/05/2012 Payment ($45.00) 




Shilling, Kathryn L Receipt # DC-08624-2012 03/05/2012 Payment ($5.00) 







Brian Shaw Receipt # DC-09795-2012 03/13/2012 Payment ($5.00) 












Search 











Cross, Cary Jay Receipt # DC-17279-2012 05/07/2012 Payment ($75.00) 









De La Garza, Leland Receipt # DC-21080-2012 06/04/2012 Payment ($5.00)

Search 



Case History 

Case Number 416-02008-2009 

Date Filed: 05/21/2009 

Case Type: CV - Civil Old - Accounts, Contracts, Notes 

Status: Re-Opened 

Scarbrough, Medlin & Associates Inc, 

Scarbrough, Medlin & Associates Financial 

Style: 

Services Inc v. Robert McCullough, Julia T 

McCullough 

JudicialOfficer: Oldner, Chris in 416th District Court 

Parties 

Type Name DOB Address Attorney 

Defendant McCullough, Julia T Kathryn L Shilling 

Defendant McCullough, Robert 

Kathryn L Shilling 

Plaintiff Scarbrough, Medlin & Associates Financial Services Inc Brian P Shaw 

Plaintiff Scarbrough, Medlin & Associates Inc Leland De La Garza 

Case Events 

Date Event Type Comments 

Cancelled 

Reason 

Time 

Judge 

05/21/2009 Plaintiff's Original Petition (OCA) $258.00 

05/21/2009 Request for Citation $8.00 Qty.2 

05/21/2009 Letter Cover 

05/21/2009 Citation 



Motion To Compel 

Production Of 

Documents 

09/11/2009 Letter 

from Brian Shaw to 

Cary Cross 

10/06/2009 Motion To Compel 9:00 AM 


Special Exceptions, 

First Amended 

Answer, and 

Counterclaim 


Response to 

Plaintiff's Motion to 

Compel Production of

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Documents 

10/06/2009 Order 

Compelling 

Production of 

Documents 


Plaintiffs' Original 

Answer to Defendant's 

Original Counterclaim 

10/14/2009 Motion 

to reconsider the 

court's order 

compelling production 

of documents 

10/21/2009 Certificate of Deposition Betsy Shaw Vascil 

10/21/2009 Certificate of Deposition Lori Sorg 



Second Amended 

Answer and 

Counterclaim 

11/18/2009 Subpoena Return - Not DC Issued 

Karen 

Stewart/11-12-09 


Marre 

Garcia/11-10-09 


Motion for Protection 

and/or Quash 

12/09/2009 Certificate of Deposition Thomas Stewart 


Plt's M/reconsider 

/M/protection and/or 

quash 

9:00 AM 


Motion to Compel 

Production of 

Documents 



Third Amended 

Answer, Request for 

Declaratory Judgment 

and Counterclaim 

01/20/2010 Motion 

for Protection and 

/or Quash 

01/22/2010 Letter with orders 

01/25/2010 Letter requesting trial date

Search 




to defendants' 

motion to compel 

production of 

documents 


Deft's M/Compel 

/Deft's 

M/Protection/or Quash 

9:00 AM 

02/02/2010 Correspondence email from Diane 


02/15/2010 Motion 

for Reconsideration 

on Defendants' Motion 

to Compel 

02/16/2010 Letter 

with order on 

defendant's motion to 

compel 

02/16/2010 Letter 

To Leland and/or 

Brain 

02/16/2010 Letter to Cary Jay Cross 

02/17/2010 Motion 

to Determine Form 

of Discovery Orders 

02/25/2010 Correspondence from Brian Shaw 

03/02/2010 Motion 

for Entry of 

Discovery Control Plan 


03/05/2010 Motion 

for Protection and/or 

Quash 

03/11/2010 Hearing 

motion to determine 

form of discovery. 

8:00 AM 



responses to 

interroagotries 

9:00 AM 

03/11/2010 General Docket Entry Hearing, ROR 

03/11/2010 Order Denied 

Order Denying 

Plaintiff's Motion for 

Protection and/or 

Quash 

03/11/2010 Order 

Granting Plaintiff's 


Responses to

Search 



Interrogatories 

03/11/2010 Discovery Control Plan and Scheduling Order 

03/11/2010 Order Protective Order 

03/11/2010 Order 

Denying Defendants' 

Motion for Protective 

and/or Quash 

03/15/2010 Deputy Reporter Statement 


Motion to Quash 

Deposition Notice and 

For Protection 



responses to 

interrogatories 

03/22/2010 Motion to Quash 


Motion to Modify 

Discovery Level 



Responses to 


Subject to Motion to 

Modify Discovery 

Control Plan 


Motion to Amend 

Protective Order 

03/22/2010 Motion 

to Compel Oral 

Deposition if 

Defendant Robert T. 

McCullough 

03/25/2010 Letter 

03/25/2010 Letter to Judge Oldner 

04/05/2010 Motion 

to Strike Plaintiffs' 



For Protection 


motion to quash, 

def's motion to modify 

discovery level, def's 


resp. to interr. motion 

to modify discovery 

control, def's motion 

to amend protective 

9:00 AM

Search 



order 



Hearing on pending 

motions - ROR, Orders 

signed 

04/07/2010 Order 

Denying Defendant's 

Motion to Quash and 

Compelling 

Defendant's Oral 

Deposition 

04/07/2010 Amended Order Protective Order 

04/07/2010 Order 

on Defendants' 


Responses to 


04/07/2010 Order 


Motion to Modify 

Discovery Control 

Level 

04/07/2010 Order 

on Defendants' 



Bank of America, 

N.A./4-7-10 

04/19/2010 Subpoena Return - Not DC Issued Ann Medlin 

04/19/2010 Subpoena Return - Not DC Issued J. Bezner 


Foremost Insurance 

Group 

04/19/2010 Letter with returns 


and for Protective 

Order 

04/30/2010 Motion 

Motion for Protective 

Order by Jacob B. 

Bezner and J. Bezner, 

Inc. (for subpoena) 

05/05/2010 Motion 

to Compel Responses 

to Interrogatories 

05/05/2010 Motion 

to Strike Plaintiffs' 



for Protection

Search 




05/12/2010 Motion Hearing 9:00 AM 


Hearing on m/ 

Compel and m/ Strike 

- ROR 

05/18/2010 Order Discovery Order 


Motio to Quash and 

for Protective Order 

and for Sanctions 

05/19/2010 Rule 11 Agreement 

05/21/2010 Motion Hearing For Protective Order 9:00 AM 

05/25/2010 Letter cover letter w/order 


Motion to Strike 

Plaintiffs' Motion to 

Quash Deposition 

Notice and for 

Protection and For 

Sanctions 

05/27/2010 Order 

on Def's Motion to 

Compel Responses to 

Defs' Third Set of 



to Cary Cross dated 

5-28-10 


to Quash, and 

protective order and 

Sanctions 

9:00 AM 


defendant's motion 

to strike plaintiff's 

motion 

9:00 AM 

06/03/2010 Court Admin Correspondence 

FAX/Email Rec'd by 

the Court 


06/04/2010 Jury Fee Paid $30.00 

06/09/2010 Letter 

cover with Order on 

Plaintiff's Motion to 

Quash Subpoenas and 

for Protective Order 

and for Sanctions

Search 



06/18/2010 Order 

on Plaintiffs' Motion 

to Quash Subpoenas 

and for Protective 

Order and for 

Sanctions 


Motion To Quash And 

For Protective Order 


copy of letter dated 

6-30-10 to Fifth Court 

of Appeals/Lisa Matz 

from Brian Shaw 



and Motion to Modify 



copy of First 

Supplemental Petition 

for Writ of Mandamus 

filed w/COA 

07/19/2010 Motion 

Relators' Motion for 

Leave to File First 

Supplemental Petition 

for Writ of Mandamus 

and Motion for 

Rehearing 


from COA/Order and 

Memorandum Opinion 

(dated 7-13-10) 


Response to 

Defendants' Motion to 

Compel and Motion to 

Modify Discovery 

Control Plan 

07/27/2010 Certificate of Deposition 

Rodney Martin 

Medlin 5/27/2010 


Donald R. Medlin on 

5/26/2010 


from 5th COA/Dallas 

to counsel 

07/28/2010 Motion To Compel 

and to modify 


9:00 AM 


Hearing on M/ 

compel - Denied 


Defendants' Motion 

to Compel and Motion 

to Modify Discovery

Search 



Control Plan 


from COA/Order and 

Memorandum Opinion 

(dated 7-30-10) 



Discovery Responses 

08/17/2010 Motion 

to Enter a Revised 

Scheduling Order 


Official Notice from 

Supreme Court of 

TX-Pet /Writ of 

Mandamus filed 


Defendant's Special 

Exceptions, Fourth 

Amended Answer, 

Request for 




Supreme Court 

strikes petition for writ 

of mandamus 


Supreme Court 

received and filed 

redrafted petition for 

writ of mandamus 

09/03/2010 Letter 

cover with First 

Amended Discovery 

Control Plan and 

Scheduling Order 

09/07/2010 Discovery Control Plan and Scheduling Order First Amended 


Securities America 

Inc. 

09/10/2010 Amended Petition 

Plaintiffs' First 

Amended Petition 


Special Exceptions to 

Defendants' Fourth 

Amended Answer and 

Counterclaim 


copy of letter The 

Supreme Court of 

Texas dated 9-7-10 to 

parties 


Original Answer to 

Defendant's Fourth

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Amended Answer, 

Request for 




to amend scheduling 

order and to compel 

production of 

documents 

9:00 AM 

09/17/2010 Motion To Compel Discovery responses 9:00 AM 

10/01/2010 Request for Copies $1.00 / pg 


Motion for Leave to 

Designate Expert 

Witness 





Andres Construction 

Services LLC 

10/11/2010 Certificate of Deposition Lori Sorg 

10/28/2010 Motion Hearing special exceptions 9:00 AM 


for leave to 

designate expert 

witness 

9:00 AM 

10/28/2010 Affidavit of Business Records 



5th Amended Answer 

and 1st Amended 

Counterclaim and 

Request For 




the Court/5 pages 

11/22/2010 Correspondence to Mr. De le Garza 

11/24/2010 Certificate of Deposition Warren L. Andres 

11/24/2010 Certificate of Deposition Dinah Hays 

11/29/2010 Bench Trial Cancelled: Other 9:00 AM 


Motion to Exclude 

Plaintiff's 

Supplemental Expert 

Report Produced by

Search 



Robert Wilson 

12/08/2010 Correspondence with Fiat 


Business Records 

Affidavit 


to Judge Oldner 

regarding mediation 

12/13/2010 Motion 

Plaintiff's Motion for 

Leave to Designate 

Expert Witness and 

Motion to Designate 

Materials as 

Confidential 

Information 



copy of letter dated 

12-14-10 to Cary Jay 

Cross from Brian 

Shaw 

12/17/2010 Motion Hearing Special Exceptions 9:00 AM 


Defendants' motion 

to exclude Plaintiff's 

supplemental Expert 

report Produced by 

Robert Wilson 

9:00 AM 


defendant's motion 

to exclude plaintiff's 

supplemental expert 

report produced by 

Robert Wilson 

9:00 AM 


Plaintiff's motion for 

Leave to Designate 

Expert Wtinesses and 

Motion to Designate 

Materials as 

confidential info. 

9:00 AM 


Hearing on several 

motions - ROR 

12/17/2010 Order 


Special Exceptions 

12/17/2010 Order 

Granting Defendats' 

Motion to Exclude 

Plaintiffs' 

Supplemental Expert 

Report Produced by 

Robert Wilson

Search 



12/17/2010 Order 

Granting Leave to 

Designate Expert 

Witness and 

Designating Materials 

as Confidential 

Information 




12/20/2010 Correspondence fax sheets from court 


Brief in Support of 

Special Exceptions 

01/01/2011 Defendant's Motion In Limine 


Motion To Exclude 

Evidence Of 

Compensation 


Motion To Dismiss All 

Claims Excepting 

Breach Of the 

Separation Agreement 

And Motion To Limit 

Damages 



Robert Wilson's Expert 

Fees 



Evidence Of Alleged 

Failure To Provide Due 

Diligence Items 

01/07/2011 Amended Motion in Limine 

01/13/2011 Motion 

in Limine and Ord 

Thereon 

01/14/2011 Letter 





01/26/2011 Certificate of Deposition Thomas J. Stewart 


Robert Lane 

McCullough, IV 

01/27/2011 Pre Trial 1:30 PM

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Plaintiff's Response 

to Various Pretrial 

Motions 


Answer to 

Defendant's Fifth 

Amended Answer and 

First Amended 

Counterclaim and 

Request for 


01/27/2011 Defendant's Witness List 

01/27/2011 Defendant's Trial Summary 


Proposed Jury 

Questions, 

Instructions, And 

Definitions 

01/28/2011 Pre Trial per court Cancelled: Reset 1:30 PM 

01/31/2011 Jury Trial Cancelled: Reset 9:00 AM 




02/21/2011 Jury Trial 

Due to family 

emergency 

Cancelled: Reset 9:00 AM 


03/24/2011 Brief 

Relators brief on the 

Merits 


Objections to 

Defendants' Trial 

Exhibits 

04/06/2011 Objection 

to Plt's Exhibits w/ 

Exb #1 

04/07/2011 Exhibit List 

04/07/2011 Plaintiff's Witness List 


Proposed Jury 

Charge 

04/11/2011 Jury Trial 9:00 AM 


PAR, DAR, voir dire 

of a sworn, qualified 

panel, jury seated and 

sworn, opening

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statements, evidence 

presented, continued 

to 4/12/2011 


Evidence continued, 

continue to 4/13/2011 


Trial Subpoena on 

Mark E. Stradley 


Evidence continued, 

plaintiff rests, 

evidence presented, 

defense rests, both 

sides close, charge 

conference, continue 

to 4/14/2011 

04/14/2011 Supplemental 

Plaintiffs' First 

Supplemental Jury 

Charge 


motion for instructed 

verdict 


proposed jury 

questions, 

instructions, and 

definitions 


proposed 

supplemental jury 

questions and 

instructions 

04/14/2011 Brief 

Plaintiff's Trial Brief 

in opposition to 

motion(s) for directed 

verdict 

04/14/2011 Notice 

Of Change Of 

Address For Movant's 

Attorney 


Charge conference, 

jury charged, 

arguments, jury out: 

4:16pm, In: 

04/14/2011 Charge of Court 


copy of Relators' 

Motion to Dismiss 

Petition for Writ of 

Mandamus filed with 

The Supreme Court of 

Texas

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04/28/2011 Letter cover letter 

05/10/2011 Motion 

Plaintiff's Motion For 

Entry Of Judgment 



To Counsel from B 

Shaw 

05/20/2011 Motion for Continuance & Mot for Leave 


to Def's Mot for Cont 

& Mot for Leave 

05/23/2011 Motion Hearing JNOV 9:00 AM 

05/23/2011 Motion to Enter Final Judgment 9:00 AM 


For Continuance and 

For Leave. 

9:00 AM 

05/23/2011 Motion 

for Judgment 

Notwithstanding The 

Jruy Verdict &, 

Alternavtively, Mot for 

New Trial & Mot for 

Election of Remedies 

Mot for JNOV and Mot 

for New Trial 

05/27/2011 Amended Motion 

Defendant's 

Amended Motion For 

Judgment 

Notwithstanding The 

Jury's Verdict, 

Amended Motion For 

New Trial, Amended 

Motion For Election Of 

Remedies, And 

Response To Plaintiff's 

Motion For Entry Of 

Judgment 


To Defendant's 

Motion For Judgment 

Nothwithstanding The 

Jury's Verdict and 

Alternatively Motion 

For New Trial and 

Motion For Election Of 

Remedies 

06/02/2011 Letter 

06/08/2011 Motion Hearing 9:00 AM

Search 



06/08/2011 Motion 

Defendants' motion 

for temporary 

restraining order and 

motion for temporary 

injunction 

06/08/2011 General Docket Entry Hearin - U/A 


06/23/2011 Correspondence Proposed Orders 

06/30/2011 Letter Memorandum 

07/13/2011 Motion Hearing 9:00 AM 

07/13/2011 Brief 

Letter Brief 

Regarding Entry of 

Judgment 

07/13/2011 General Docket Entry Hearing - ROR 

07/14/2011 Final Judgment 

07/15/2011 Request for Copies $1.00 / pg 

08/04/2011 Motion 

Defendants 

Emergency Mot to 

Stay Post-Judgment 

Discovery pending 

filing of Super sedeas 

Bond 


Defendant's Motion 

To Quash Plaintiff's 

Post-Judgment 

Deposition Notices Of 

Robert L McCullough 

And Julia T 

McCullough 


from Court/fax on 

6/14/11 


from Court/fax on 

5/20/11 from Cary 

Cross 


from Supreme Court 

of TX dated 5/6/11 


from Court/fax to 

Cross & DeLa Garza 

dated 6/21/11 


from Court from 

Brian Shaw dated

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8/1/11 


08/04/2011 CD submitted 


To C Watson from C 

Cross 


Motion to Stay 

Post-Judgment 

Discovery TO BE 

HEARD @ 2:00 PM 

9:00 AM 


Hearing on Motion to 

Stay Discovery - 

Agreements read into 

the record, otherwise 

ROR 

08/15/2011 Motion Mot for New Trial 

08/15/2011 Motion - REOPEN - OCA $40.00 

Def's Mot to Mod, 

Correct or Reform the 

Judgment 

08/15/2011 Letter Cover-Proposed Ord 

08/16/2011 Certificate of Cash Deposit in Lieu of Surety Bond 


of Julia T. 

McCullough 


of Robert L. 

McCullough 

08/18/2011 Motion 

for TRO & Temp 

Injunction 

08/19/2011 Temporary Restraining Order Hearing 

To be heard @ 

2:00PM 

9:00 AM 


to Plaintiffs' Motion 

for TRO and 

Temporary Injunction 


Hearing on TRO - 

Court declines to sign 

TRO, set for TI 

hearing. 

08/19/2011 Deputy Reporter Statement 

08/19/2011 Order 

Regarding 

Post-Judgment

Search 



Discovery 

08/22/2011 Motion 

to Strike Def's 1st 

Amend Mot for New 

Trial 

08/24/2011 Motion 


For Leave To File 

Additional Motion For 

New Trial 

08/25/2011 Motion 

to Compel 

Post-Judgment 

Discovery 


Contest of Debtor's 

Net Worth 


to Defts Motion to 

Modify, Correct, or 

Reform Judgment 


to Defts Motion for 

Leave to File 

Additional Motion for 

New Trial 

08/29/2011 Motion To Compel 8:30 AM 9:00 AM 


Modify, Correct, or 

Reform the Judgment 

9:00 AM 


Plaintiffs' Motion to 

strike Defendant's 

Motion for New Trial 

9:00 AM 


Motion for leave to 

file Additional Motion 

for New Trial 

9:00 AM 


Hearing on several 

motions; Motion to 

Compel - GRANTED, 

ROR Morion to Strike - 

DENIED Motion to 

Correct Judgment - 

DENIED Motion for 

Leave - GRANTED 

Motion ofr New Trial - 

DENIED OTBFC by 

9/9/2011 

08/30/2011 Correspondence to Court 

09/09/2011 Order 


from court dated 

7/13/11

Search 




Amended Motion for 

Post-Judgment 

Injunction 

09/27/2011 Letter to Counsel 

09/28/2011 Appeals - Notice Of Appeal 

09/29/2011 Letter to Counsel 

09/29/2011 Appeals - Designation Letter/Req for Record 

09/30/2011 Appeals - Correspondence 

e-filed NOA with the 

5th COA & e-mailed to 

Court Reporter 

10/04/2011 Brief 

Plaintiff's Brief In 

Support Of Net Worth 

Contest 


Continuance & 

Sanctions 

10/04/2011 Subpoena Return - Not DC Issued Robert McCullough 


P's Contest of 

Debtor's Net Worth 

9:00 AM 


Post Judgment 

Injunction 

9:00 AM 


Motion to Quash, 

Continue and for 

Sanctions 

9:00 AM 


Motion to Continue - 

GRANTED to 

10/19/2011 at 

12:00pm, TRO signed 

10/06/2011 Temporary Restraining Order 

Agreed 

Post-Judgment TRO 

10/19/2011 Motion Hearing Injunction Cancelled: Other 9:00 AM 


to Be Heard @ 12 

noon 

9:00 AM 

11/10/2011 Letter 

from Cary Crosscopies 


TO BE HEARED @ 

1:30PM 

9:00 AM 

11/15/2011 Appeals - Designation Letter/Req for Record Appellee's request

Search 




11/21/2011 Motion 


For Reduction Of Cash 

Deposit 


Reduction of cash 

deposite / To be heard 

@ 1:30 

9:00 AM 


response to def mot 

for reduction of cash 

deposit 


e-filed letter re: 

clerk's record to 5th 

COA & faxed to 

Appellant Attorney 

11/29/2011 Order 

on Contest of Net 

Worth 

12/02/2011 Appeals - Clerk's Record Paid $ 

12/02/2011 Appeals - Cover Letter 

12/06/2011 Letter To Judge Oldner 

12/07/2011 Letter To Judge Oldner 

12/09/2011 Appeals - Clerk's Record - Appealant Copy - Paid $ 

12/09/2011 Appeals - Clerk's Record Paid $ 

12/09/2011 Letter to Judge 

12/13/2011 Appeals- Clerk's Record 

e-filed with the 5th 

COA & mailed copy to 

Appellant Attorney 

(CD#49) 

12/16/2011 Order 

on Supersedeas 

Bond 


01/05/2012 Appeals - Supplemental Request 

Kathryn Shilling for 

Appellants 



for Appellees 

01/11/2012 Appeals - Clerk's Record Paid $ supplemental 

01/20/2012 Appeals - Clerk's Record Paid $

Search 



01/20/2012 Appeals - Clerk's Record - Appealant Copy - Paid $ 

01/20/2012 Motion 

Defendants' 

Emergency Motion to 

Stay Order on 

Supersedeas Bond 

and to Stay Judgment 


to Defts Emergency 

Motion to Stay Order 

on Supersedeas Bond 


01/20/2012 Exhibit ATTACHED AS PDF 

01/20/2012 Supplemental 

to Response to Defts' 

Emergency Motion to 

Stay Order on 

Supersedeas Bond 


01/20/2012 Letter 

Cover-Emerg Mot & 

Stay Ord 

01/25/2012 Appeals - Req for Reporter's Record 

with attached 

correspondence 


e-filed Supplemental 

Clerk's Record with 

the 5th COA & mailed 

copy to Kathryn 

Shilling (CD#49) 


02/02/2012 Certificate of Deposition R McCollough IV 


02/09/2012 Writ Iss To SASE 


from court/Letter to 

Judge 

03/14/2012 Out of County Sheriff Return 

Writ of Exec. on Julia 

McCullough Dallas 

County #3 

03/14/2012 Out of County Sheriff Return 

Writ of Exec. on 


Dallas County #3 

03/14/2012 Order 

and Opinion on 

Motion to Review 

Order on Supersedeas 

Bond-5th COA

Search 





e-filed Supplemental 

with the 5th COA 

(CD#49) 


05/04/2012 Writ 

iss ret to atty 

sase/fed ex 


e-filed with the 5th 

COA & e-mailed copy 

to attorney (CD#49) 


Financial Summary 

Defendant 

Charges : $1,169.25 

Payments: $1,169.25 


Defendant 

Charges : $209.75 



Other 




Plaintiff 

Charges : $975.00 



Plaintiff 

Charges : $250.00 



Transactions 

Payor Receipt Date Description Amount 



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De La Garza, Leland Receipt # DC-11086-2009 05/21/2009 Check ($259.00) 


De La Garza, Leland Receipt # DC-20267-2009 09/08/2009 E-filing ($5.00) 


Brian Shaw Receipt # DC-22800-2009 10/06/2009 E-filing ($5.00) 


Shaw, Brian P Receipt # DC-01909-2010 01/25/2010 E-filing ($5.00) 
















Martens, Dan E Receipt # DC-11434-2010 04/30/2010 E-filing ($5.00) 




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De La Garza, Leland Receipt # DC-15012-2010 06/04/2010 Check ($30.00) 




Cross, Cary J Receipt # DC-18570-2010 07/12/2010 E-filing ($5.00) 
















Michael R Gordon Receipt # DC-27099-2010 10/01/2010 Check ($12.00) 




Cross, Cary J Receipt # DC-31138-2010 11/11/2010 Payment ($5.00) 


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Shaw, Brian P Receipt # DC-34070-2010 12/13/2010 Payment ($5.00) 


















Martens, Dan E Receipt # DC-12540-2011 04/14/2011 Payment ($5.00) 




Search 









Kathryn L Shilling Receipt # DC-18265-2011 05/27/2011 Payment ($5.00) 






Brain-Special Delivery Receipt # DC-24176-2011 07/15/2011 Payment ($64.00) 














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SHACKELFORD, MELTON & MCKINLEY, LLP Receipt # DC-41661-2011 12/02/2011 Payment ($198.00) 







Shilling, Kathryn L Receipt # DC-42495-2011 12/09/2011 Payment ($894.25)

Search 




SHACKELFORD, MELTON & MCKINLEY, LLP Receipt # DC-01196-2012 01/11/2012 Payment ($420.00) 









Shackelford, Melton, & McKinley, LLP Receipt # DC-05121-2012 02/08/2012 Payment ($16.00) 


Shaw, Brian P Receipt # DC-16983-2012 05/04/2012 Payment ($16.00)

Order issued June 6, 2012 

In The 

otourt of Appeals 

ltTiftq ilistrict of Wexas at ilallas 

No. OS-12-007S7-CV 


V. 

SCARBROUGH, MEDLIN AND ASSOCIATES, INC., ET AL., Appellees 

Appeal from the 416th Judicial District Court 

Collin County, Texas 

Trial Court Cause No. 416-00247-2012 

ORDER 

Before Justices Morris, Richter, and Lang-Miers 

The Court has before it appellants' June 6, 2012 emergency motion to stay garnishment 

order and release of funds. The Court DENIES the motion. 

..

Filed - Supreme Court of Texas

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