Court of Appeals of Texas, Twelfth District, Tyler
WILLIAM R. KRUSE AND DEBORAH KRUSE, APPELLANTS
HENDERSON TEXAS BANCSHARES, INC., APPELLEE
from the 4th District Court of Rusk County, Texas (Tr.Ct.No.
consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
R. Kruse and Deborah Kruse appeal from an adverse judgment in
their suit to determine the value of their dissenters'
shares of stock in Prosper Bancshares, Inc., which merged
with Henderson Texas Bancshares, Inc. In their sole issue,
Appellants contend the trial court abused its discretion when
it denied their motion for a jury trial. We affirm.
owners of a minority share of common stock of Prosper
Bancshares, Inc., were notified by that entity that it
intended to merge into Henderson Texas Bancshares, Inc., and
it proposed to pay minority shareholders $0.80 per share.
Appellants voted against the merger, exercised their right of
dissent, and demanded payment of $1.82 per share. The parties
were unable to agree on the fair value of the stock.
Appellants filed suit pursuant to Chapter 10 of the Texas
Business Organizations Code. Citing Section 10.354(a)(2),
they sought "the fair value of their ownership shares
through an appraisal." Additionally, they sought "a
finding and determination of the fair value of their
ownership interests" pursuant to Sections 10.361 and
10.362. They included a jury demand requesting a trial by
jury of all matters of fact. Appellants prayed that the trial
court appoint an appraiser to determine the fair value of the
shares and order Henderson Texas Bancshares, Inc. to pay them
the fair value of the shares.
court determined that Appellants perfected their rights to
dissent and are entitled to receive payment for the fair
value of their ownership interests in Prosper Bancshares,
Inc. With the agreement of the parties, the trial court
appointed Donald Erickson to serve as appraiser and determine
the fair value of Appellants' ownership interests in the
stock. Erickson determined that the fair value of the stock
was $0.96 per share. Appellants filed extensive objections to
Erickson's report. Erickson filed an amended report in
which he again determined that the fair value of the stock
was $0.96 per share. Appellants filed objections to the
filed a motion for jury trial arguing they have a
constitutional right to have their case heard by a jury. The
trial court denied this motion, heard testimony, and rendered
judgment that the fair value of Appellants' shares in
Prosper Bancshares, Inc. is $0.96 per share, ordering that
Appellants recover $108, 494.56. This appeal followed.
for Jury Trial
their sole issue, Appellants contend the trial court abused
its discretion by denying their request for a jury to find
the fair value of their ownership interest in Prosper
Bancshares, Inc. They argue that their right to a jury trial
is supported by Article V, Section 10 of the Texas
Constitution and Article I, Section 15 of the Texas
Constitution. They also assert that the existence of fact
questions prevents the district court from appraising their
ownership interests as a matter of law, and the trial
court's error is harmful.
review the trial court's denial of a request for a jury
trial for an abuse of discretion. Mercedes-Benz Credit
Corp. v. Rhyne, 925 S.W.2d 664, 666 (Tex. 1996). We
consider the entire record and determine whether the trial
court's decision is arbitrary, unreasonable, and without
reference to guiding principles. Id. Applicable
owner of an ownership interest in a domestic entity subject
to dissenters' rights pursuant to Chapter 10 of the Texas
Business Organizations Code is entitled to dissent from a
plan of merger, and, subject to compliance with the
procedures set forth in the statute, obtain the fair value of
that ownership interest through an appraisal. Tex. Bus. Org.
Code Ann. § 10.354(a) (West Supp. 2018). The statute
specifies the procedures the owner must comply with in order
to perfect his right of dissent and appraisal. Id.
§ 10.356 (West Supp. 2018). The owner must demand in
writing that the responsible organization pay the fair value
of the owner's ownership interests and state the
owner's estimate of the fair value of the ownership
interests. Id. § 10.356(b)(3). The organization
may either agree to that amount or provide to the owner an
estimate of the fair value of the ownership interests.
Id. § 10.358 (West 2012).
dissenting owner and responsible organization cannot agree on
the fair value of the owner's ownership interests, either
party may file a petition with the court in the appropriate
jurisdiction requesting a finding and determination of the
fair value. Id. § 10.361(a) (West 2012). The
court shall determine which owners have perfected their
rights and become entitled to receive payment for the fair
value of their ownership interests and appoint an appraiser
to determine the fair value of those ownership interests.
Id. § 10.361(e). ...