Filed - Supreme Court of Texas

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.
APPELLEES’ RESPONSE TO MOTION TO REVIEW ORDER ON SUPERSEDEAS BOND – Page 20