<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ERLY INDUSTRIES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
THE POWELL GROUP
FARMERS RICE MILLING COMPANY, INC.
NANETTE N. KELLEY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
NO. 95-016749
KINGWOOD LAKES SOUTH, L.P. || IN THE DISTRICT COURT OF
ET AL., ||
||
VS. || HARRIS COUNTY, TEXAS
||
GERALD D. MURPHY AND ||
DOUGLAS A. MURPHY, ET AL. || 151ST JUDICIAL DISTRICT
CHARGE OF THE COURT
LADIES AND GENTLEMEN OF THE JURY:
This case is submitted to you by asking questions about the facts, which
you must decide from the evidence you have heard in this trial. You are the sole
judges of the credibility of the witnesses and the weight to be given their
testimony, but in matters of law, you must be governed by the instructions in
this charge. In discharging your responsibility on this jury, you will observe
all the instructions which have previously been given you. I shall now give you
additional instructions which you should carefully and strictly follow during
your deliberations.
1. Do not let bias, prejudice or sympathy play any part in your
deliberations.
2. In arriving at your answers, consider only the evidence introduced here
under oath and such exhibits, if any, as have been introduced for your
consideration under the rulings of the court, that is, what you have
seen and heard in this courtroom, together with the law as given you by
the court. In your deliberations, you will not consider or discuss
anything that is not represented by the evidence in this case.
3. Since every answer that is required by the charge is important, no
juror should state or consider that any required answer is not
important.
4. You must not decide who you think should win, and then try to answer
the questions accordingly. Simply answer the questions, and do not
discuss nor concern yourselves with the effect of your answers.
5. You will not decide the answer to a question by lot or by drawing
straws, or by any other method of chance. Do not return a quotient
verdict. A quotient verdict means that the jurors agree to abide by the
result to be reached by adding together each juror's figures and
dividing by the number of jurors to get an average. Do not do any
trading on your answer; that is, one juror should not agree to answer a
certain question one way if others will agree to answer another
question another way.
<PAGE>
6. You may render your verdict upon the vote of ten or more members of the
jury. The same ten or more of you must agree upon all of the answers
made and to the entire verdict. You will not, therefore, enter into an
agreement to be bound by a majority or any other vote of less than ten
jurors. If the verdict and all of the answers therein are reached by
unanimous agreement, the presiding juror shall sign the verdict for the
entire jury. If any juror disagrees as to any answer made by the
verdict, those jurors who agree to all findings shall each sign the
verdict.
These instructions are given you because your conduct is subject to review
the same as that of the witnesses, parties, attorneys and the judge. If it
should be found that you have disregarded any of these instructions, it will be
jury misconduct and it may require another trial by another jury; then all of
our time will have been wasted.
The presiding juror or any other who observes a violation of the court's
instructions shall immediately warn the one who is violating the same and
caution the juror not to do so again.
When words are used in this charge in a sense that varies from the meaning
commonly understood, you are given a proper legal definition, which you are
bound to accept in place of any other meaning.
Answer "Yes" or "No" to all questions unless otherwise instructed. A "Yes"
answer must be based on a preponderance of the evidence unless otherwise
instructed. If you do not find that a preponderance of the evidence supports a
"Yes" answer, then answer "No." The term "preponderance of the evidence" means
the greater weight and degree of credible evidence introduced before you and
admitted in this case. Whenever a question requires an answer other than "Yes"
or "No," your answer must be based on a preponderance of the evidence unless
otherwise instructed.
Charge of the Court, page 2
<PAGE>
GENERAL INSTRUCTIONS
--------------------
1. "Proximate cause" means that cause which, in a natural and continuous
sequence, produces an event, and without which cause such event would not have
occurred. In order to be a proximate cause, the act or omission complained of
must be such that a person using the degree of care required of him would have
foreseen that the event, or some similar event, might reasonably result
therefrom. There may be more than one proximate cause of an event.
2. A fact may be established by direct evidence or by circumstantial
evidence or both. A fact is established by direct evidence when proved by
documentary evidence or by witnesses who saw the act done or heard the words
spoken. A fact is established by circumstantial evidence when it may be fairly
and reasonably inferred from other facts proved.
3. Partners owe each other the following duties:
(a) Duties. A partner owes to the partnership and the other partners:
(1) a duty of loyalty; and
(2) a duty of care.
(b) Loyalty. A partner's duty of loyalty includes:
(1) accounting to the partnership and holding for it any property,
profit, or benefit derived by the partner in the conduct and
winding up of the partnership business or from use by the partner
of partnership property;
(2) refraining from dealing with the partnership on behalf of a party
having an interest adverse to the partnership; and
(3) refraining from competing with the partnership or dealing with
the partnership in a manner adverse to the partnership.
(c) Care. A partner's duty of care to the partnership and other partners
is to act in the conduct and winding up of the partnership business
with the care an ordinarily prudent person would exercise in similar
circumstances. An error in judgment does not by itself constitute a
breach of this duty of care. A partner is presumed to satisfy this
duty if the partner acts on an informed basis and in compliance with
Subsection (d).
(d) Method of Discharge. A partner shall discharge the partner's duties to
the partnership and the other partners under this Act or under the
partnership agreement, and exercise any rights and powers in the
conduct or winding up of the partnership business;
Charge of the Court, page 3.
<PAGE>
(1) in good faith; and
(2) in a manner the partner reasonably believes to be in the best
interest of the partnership.
(e) Effect of Partner Benefit. A partner does not violate a duty or
obligation under the partnership agreement merely because the partner's
conduct furthers the partner's own interest.
(f) Trustee Standard Inapplicable. A partner, in that capacity, is not a
trustee and is not held to the same standards as a trustee.
4. In answering any question concerning interpretation of a term in the
Agreement of Limited Partnership, you may consider and apply all the terms and
provisions of the Agreement of Limited Partnership (Plaintiffs' Exhibit 1 and
Defendants' Exhibit 1) together with the Exhibits, if any, attached thereto on
or about December 22/23, 1994, as written. You are further instructed that, for
any questions concerning interpretation of a term in the Agreement of Limited
Partnership, you are bound by the definitions of the terms and conditions
contained in the Agreement of Limited Partnership and in the Exhibits, if any,
attached thereto on or about December 22/23, 1994.
Charge of the Court, page 4.
<PAGE>
GENERAL DEFINITIONS
-------------------
1. "Kingwood Lakes South" means Kingwood Lakes South, L.P., a Texas
limited partnership.
2. The "Partnership Agreement" means the Agreement of Limited Partnership
of Kingwood Lakes South, L.P., executed on or about December 22, 1994 by and
between Tenzer Company, Inc., Gerald D. Murphy, Douglas A. Murphy, and Anthony
M. Frank.
3. "ERLY" means ERLY Industries, Inc.
4. "ARI" means American Rice, Inc.
5. "Tenzer Co." means Tenzer Company, Inc.
6. "Tenzer" means Michael L. Tenzer.
7. "Frank" means Anthony M. Frank.
Charge of the Court, page 5.
<PAGE>
QUESTION NO. 1
Did Tenzer Co., Frank, Gerald Murphy and Douglas Murphy agree to the Annual
Operating Plan for 1995 (Plaintiffs' Exhibit 3), referred to in Exhibit B to the
Partnership Agreement?
Answer "Yes" or "No."
Answer: yes
-----
Charge of the Court, page 6.
<PAGE>
QUESTION NO. 2
Did Tenzer Co., Frank, Gerald Murphy and Douglas Murphy intend to be bound
to a partnership agreement that included as Exhibit D the document labeled
"Kingwood Lakes South Partnership Pro Forma Key Assumptions - 1994$, Run 7.0"
(Plaintiffs' Exhibit 1A)?
Answer "Yes" or "No."
Answer: yes
-----
Charge of the Court, page 7.
<PAGE>
QUESTION NO. 3
Did the failure, if any, by Gerald Murphy and Douglas Murphy or either of
them, if any, to comply with the Partnership Agreement proximately cause damages
to Tenzer Co. or Frank?
Answer "Yes" or "No" for each of the following:
Answer:
a. failure, if any, to comply by Gerald Murphy
1. Tenzer Co. yes
-----
2. Frank yes
-----
b. failure, if any, to comply by Doug Murphy
1. Tenzer Co. yes
-----
2. Frank yes
-----
Charge of the Court, page 8.
<PAGE>
QUESTION NO. 4
Was the failure of Gerald Murphy or Douglas Murphy, if any, to comply with
the Agreement for Limited Partnership excused?
You are instructed that Gerald Murphy and/or Douglas Murphy is excused from
the agreement if any one of the following occurred:
a. If Tenzer Co. had failed to comply with a material obligation at a time
when Tenzer Co. was insisting on performance by Gerald Murphy and/or
Douglas Murphy;
ANSWER "YES" OR "NO" FOR EACH:
ANSWER:
GERALD MURPHY: NO
---------------
DOUGLAS MURPHY: NO
---------------
b. If Tenzer Co. fraudulently induced Gerald Murphy and/or Douglas Murphy
into entering the Agreement of Limited Partnership:
Fraudulent inducement occurred if Tenzer Co.
1. made a material misrepresentation,
2. the misrepresentation was made with knowledge of its falsity or
made recklessly without any knowledge of the truth and as a
positive assertion,
3. the misrepresentation was made with the intention that it should be
acted on by the person, and
4. the person acted in reliance upon the misrepresentation and thereby
suffered injury.
"Misrepresentation" means a false statement of fact.
Fraudulent inducement occurred if Tenzer Co.
1. concealed or failed to disclose a material fact within its
knowledge;
2. knew that the other party was ignorant of the fact and did not have
an equal opportunity to discover the truth;
Charge of the Court, page 9.
<PAGE>
3. intended to induce the other party to take some action by concealing or
failing to disclose the fact; and
4. the other party suffered an injury as a result of acting without
knowledge of the undisclosed fact.
ANSWER "YES" OR "NO" FOR EACH:
ANSWER:
GERALD MURPHY: NO
--------------
DOUGLAS MURPHY: NO
--------------
c. Tenzer Co. had breached its duties as general partner at a time when it was
insisting on performance by Gerald Murphy and/or Douglas Murphy:
ANSWER "YES" OR "NO" FOR EACH:
ANSWER:
GERALD MURPHY: NO
--------------
DOUGLAS MURPHY: NO
--------------
d. Tenzer Co. admitted in writing by January 1, 1995 that its assets were
insufficient to pay its liabilities as they matured; or
ANSWER "YES" OR "NO" FOR EACH:
ANSWER:
GERALD MURPHY: NO
--------------
DOUGLAS MURPHY: NO
--------------
e. Tenzer Co. admitted in writing by February 28, 1995 that its assets were
insufficient to pay its liabilities as they matured.
ANSWER "YES" OR "NO" FOR EACH:
ANSWER:
GERALD MURPHY: NO
--------------
DOUGLAS MURPHY: NO
--------------
Charge of the Court, page 10.
<PAGE>
QUESTION NO. 5
Did Gerald Murphy, Douglas Murphy or either of them breach a duty owed to
their partners that was a proximate cause of damages to Tenzer Co. or Frank?
Answer "Yes" or "No" for each of the following:
Answer:
(a) the breach, if any, by Gerald Murphy that proximately caused damages
to:
1. Frank Yes
----------
2. Tenzer Co. Yes
----------
(b) the breach, if any, by Douglas Murphy that proximately caused damages
to:
1. Frank Yes
----------
2. Tenzer Co. Yes
----------
Charge of the Court, page 11.
<PAGE>
If you have answered "Yes" to Question No. 5, then answer the following
question. Otherwise, do not answer the following question.
QUESTION NO. 6
WAS THE BREACH FOUND BY YOU IN QUESTION NO. 5 COMMITTED WITH MALICE?
"Malice" means:
(a) a specific intent to cause substantial injury; or
(b) an act or omission
(i) which, when viewed objectively from the standpoint of the actor
at the time of its occurrence, involved an extreme degree of
risk, considering the probability and magnitude of the potential
harm to others; and
(ii) of which the actor had actual, subjective awareness of the risk
involved, but nevertheless proceeded with conscious indifference
to the rights, safety, or welfare of other.
ANSWER "YES" OR "NO" FOR EACH OF THE FOLLOWING:
ANSWER:
(A) THE BREACH BY GERALD MURPHY THAT PROXIMATELY CAUSED DAMAGES TO:
1. FRANK YES
----------
2. TENZER CO. YES
----------
(B) THE BREACH BY DOUGLAS MURPHY THAT PROXIMATELY CAUSED DAMAGES TO:
1. FRANK YES
----------
2. TENZER CO. YES
----------
Charge of the Court, page 12.
<PAGE>
If you have answered "Yes" to Question No. 5, then answer the following
question. Otherwise do not answer the following question.
QUESTION NO. 7
Did ARI and ERLY or either of them willfully participate in the breach of
duties found by you in Question No. 5?
"Willfully" means knowingly, intentionally, or deliberately.
Answer "Yes" or "No" for each:
Answer:
ARI: yes
-----
ERLY: yes
-----
Charge of the Court, page 13.
<PAGE>
QUESTION NO. 8
Did Gerald Murphy, Douglas Murphy, ARI and ERLY or any of them commit a
fraud that proximately caused damages to Tenzer Co. and Frank or either of them?
1. Fraud by affirmative misrepresentation occurs when --
a. a party makes a material misrepresentation;
b. the misrepresentation is made with knowledge of its falsity or made
recklessly without any knowledge of its truth and as a positive
assertion;
c. the misrepresentation is made with the intention that it should be
acted on by the other party; and
d. the other party acts in reliance on the misrepresentations and
thereby suffers injury.
"Misrepresentation" means:
a. a false statement of fact;
b. a promise of future performance made with an intent not to perform
as promised;
c. a statement of opinion based on a false statement of fact;
d. a statement of opinion that the maker knows to the false; or
e. an expression of opinion that is false, made by one claiming or
implying to have special knowledge or the subject matter of the
opinion. "Special Knowledge" means knowledge or information
superior to that possessed by the other party and to which the
other party did not have equal access.
2. Fraud by failure to disclose occurs when --
a. a party conceals or fails to disclose a material fact within the
knowledge of that party;
b. the party knows that the other party is ignorant of the fact and
does not have an equal opportunity to discover the truth;
c. the party intends to induce the other party to take some action by
concealing or failing to disclose the fact; and
Charge of the Court, page 14.
<PAGE>
d. the other party suffers injury as a result of acting without knowledge
of the undisclosed fact.
ANSWER "YES" OR "NO" FOR EACH.
ANSWER:
1. AFFIRMATIVE MISREPRESENTATION:
<TABLE>
<CAPTION>
TENZER CO. FRANK
---------- -----
<S> <C> <C>
GERALD MURPHY YES YES
---------- ----------
DOUGLAS MURPHY YES YES
---------- ----------
ARI YES YES
---------- ----------
ERLY YES YES
---------- ----------
</TABLE>
2. FAILURE TO DISCLOSE:
<TABLE>
<CAPTION>
TENZER CO. FRANK
---------- -----
<S> <C> <C>
GERALD MURPHY YES YES
---------- ----------
DOUGLAS MURPHY YES YES
---------- ----------
</TABLE>
Charge of the Court, page 15.
<PAGE>
If you have answered "Yes" to Question No. 8, then answer the following
question. Otherwise, do not answer the following question.
QUESTION NO. 9
WERE ONE OR MORE OF THOSE NAMED BELOW, PART OF A CONSPIRACY THAT DAMAGED
TENZER CO. AND FRANK OR EITHER OF THEM?
To be part of a conspiracy, one or more of those named below must have had
knowledge of, agreed to and intended a common objective or course of action
that resulted in the damages to Tenzer Co. and/or Frank. One or more
persons involved in the conspiracy must have performed some act or acts to
further the conspiracy.
ANSWER "YES" OR "NO" FOR EACH:
ANSWER:
<TABLE>
<CAPTION>
TENZER CO. FRANK
---------- -----
<S> <C> <C>
GERALD MURPHY YES YES
---------- ----------
DOUGLAS MURPHY YES YES
---------- ----------
ARI YES YES
---------- ----------
ERLY YES YES
---------- ----------
</TABLE>
Charge of the Court, page 16.
<PAGE>
QUESTION NO. 10
What sum of money, if any, if paid now in cash, would fairly and reasonably
compensate Frank for his damages, if any?
Consider the following elements of damages, if any, and none other.
(a) Loss of preferred return under the Partnership Agreement.
(b) Frank's share of lost profits that were a natural, probable, and
foreseeable consequence of the failure to comply.
(c) Loss of equity (capital) contribution made by Frank.
Do not include in your answer any amount that you find Frank could have
avoided by the exercise of reasonable care.
If you answer questions about damages, answer each question separately. Do
not increase or reduce the amount in one answer because of the instructions
in or your answers to any other questions about damages. Do not speculate
about what any party's ultimate recovery may or may not be. Any recovery
will be determined by the court when it applies the law to your answers at
the time of judgment.
Do not add any amount for interest on past damages, if any.
Answer in dollars and cents, if any, for the elements of damages defined above:
(a) Loss of preferred return: $ 149,000
----------
(b) Lost profits: $ 430,000
----------
(c) Loss of equity (capital) contribution: $ 449,000
----------
Charge of the Court, page 17.
<PAGE>
QUESTION NO. 11
What sum of money, if any, if paid now in cash, would fairly and reasonably
compensate Tenzer Co. for its damages, if any?
Consider the following elements of damages, if any, and none other.
(a) Loss of preferred return under the Partnership Agreement.
(b) Loss of equity (capital) contribution made by Tenzer Co.
(c) Tenzer Co.'s share of lost profits that were a natural, probable, and
foreseeable consequence of the failure to comply.
(d) Tenzer Co.'s liability for partnership debts representing expenses
incurred by Kingwood Lakes South in connection with the Project.
(e) The management fees which Kingwood Lakes South would have paid Tenzer
Co. had the Project gone forward. For purposes of this question,
management fee is the difference between the total management fee to
be paid by Kingwood Lakes South to Tenzer Co. minus costs that would
have been incurred by Tenzer Co. in managing the project.
Do not include in your answer any amount that you find Tenzer Co. could
have avoided by the exercise of reasonable care.
If you answer questions about damages, answer each question separately. Do
not increase or reduce the amount in one answer because of the instructions
in or your answers to any other questions about damages. Do not speculate
about what any party's ultimate recovery may or may not be. Any recovery
will be determined by the court when it applies the law to your answers at
the time of judgment.
Do not add any amount for interest on past damages, if any.
Answer in dollars and cents, if any, for the elements of damages defined above:
(a) Loss of preferred return: $ 243,000.00
-------------
(b) Loss of equity (capital) contribution: $ 521,000.00
-------------
(c) Lost profits: $ 3,922,000.00
-------------
(d) Partnership debts: $ 210,000.00
-------------
(e) Management fees: $ 3,733,000.00
-------------
Charge of the Court, page 18.
<PAGE>
If you have answered "Yes" to Question No. 3 and awarded damages in
Question Nos. 10 or 11 for failure to comply with the Partnership Agreement,
then answer this Question. Otherwise, do not answer this Question.
QUESTION NO. 12
WHAT IS A REASONABLE FEE FOR THE NECESSARY SERVICES OF TENZER CO. AND
FRANK'S ATTORNEYS IN THIS CASE, STATED IN DOLLARS AND CENTS, THAT IS
ATTRIBUTABLE TO THE FAILURE TO COMPLY WITH THE PARTNERSHIP AGREEMENT?
Please answer without considering which sum will actually be awarded by the
court. That is a decision for the court at the time it renders its judgment
in this case. Also, answer what the reasonable attorney's fees would be for
an appeal of this case without considering whether there actually will be,
or should be, an appeal.
A. FOR PREPARATION AND TRIAL.
ANSWER: $ 4,342,400
-----------
B. FOR AN APPEAL TO THE COURT OF APPEALS.
ANSWER: $ 271,400
-----------
C. FOR MAKING OR RESPONDING TO AN APPLICATION OR MAKING OR RESPONDING TO
AN APPEAL TO THE SUPREME COURT OF TEXAS.
ANSWER: $ 135,700
-----------
D. IF AN APPEAL IS GRANTED BY THE SUPREME COURT OF TEXAS.
ANSWER: $ 135,700
-----------
<PAGE>
QUESTION NO. 14
DID TENZER CO. BREACH A DUTY OWED TO ITS PARTNERS THAT WAS A PROXIMATE
CAUSE OF DAMAGES TO GERALD MURPHY OR DOUGLAS MURPHY?
ANSWER "YES" OR "NO" FOR EACH OF THE FOLLOWING:
ANSWER:
GERALD MURPHY NO
----
DOUGLAS MURPHY NO
----
Charge of the Court, page 21.
<PAGE>
QUESTION NO. 15
DID THE FAILURE, IF ANY, BY TENZER CO., IF ANY, TO COMPLY WITH THE
PARTNERSHIP AGREEMENT PROXIMATELY CAUSE DAMAGES TO GERALD MURPHY OR DOUGLAS
MURPHY?
ANSWER "YES" OR "NO" FOR EACH OF THE FOLLOWING:
ANSWER:
GERALD MURPHY NO
----
DOUGLAS MURPHY NO
----
Charge of the Court, page 22.
<PAGE>
If you have answered Question No(s). 13 or 14 "Yes," then answer this
question. Otherwise, do not answer this question.
QUESTION NO. 16
Was the conduct of Tenzer Co. committed by and through Michael L. Tenzer?
Answer "Yes" or "No."
Answer:
----------------------
Charge of the Court, page 23
<PAGE>
QUESTION NO. 17
What sum of money, if any, if paid now in cash, would fairly and reasonably
compensate Gerald Murphy and/or Douglas Murphy for their damages, if any?
Consider the following elements of damages, if any, and none other:
a. Loss of equity (capital) contribution made by Douglas Murphy; and
b. Loss of the value of the ERLY stock by Gerald Murphy.
Do not include in your answer any amount that you find Gerald Murphy and/or
Douglas Murphy could have avoided by the exercise of reasonable care.
Answer in dollars and cents:
Gerald Murphy: 0
-------
Douglas Murphy: 0
-------
Charge of the Court, page 24.
<PAGE>
After you retire to the jury room, you will select your own presiding
juror. The first thing the presiding juror will do is to have this complete
charge read aloud and then you will deliberate upon your answers to the
questions asked.
It is the duty of the presiding juror--
1. to preside during your deliberations,
2. to see that your deliberations are conducted in an orderly manner and
in accordance with the instructions in this charge,
3. to write out and hand to the bailiff any communications concerning the
case that you desire to have delivered to the judge,
4. to vote on the questions,
5. to write your answers to the questions in the spaces provided, and
6. to certify to your verdict in the space provided for the presiding
juror's signature or to obtain the signatures of all the jurors who
agree with the verdict if your verdict is less than unanimous.
You should not discuss the case with anyone, not even with other members of
the jury, unless all of you are present and assembled in the jury room. Should
anyone attempt to talk to you about the case before the verdict is returned,
whether at the courthouse, at your home, or elsewhere, please inform the judge
of this fact.
When you have answered all the questions you are required to answer under
the instructions of the judge and your presiding juror has placed your answers
in the spaces provided and signed the verdict as presiding juror or obtained the
signatures, you will inform the bailiff at the door of the jury room that you
have reached a verdict, and then you will return into court with your verdict.
/s/ CAROLINE BAKER
--------------------
JUDGE PRESIDING
Charge of the Court, page 25.
<PAGE>
CERTIFICATE
We, the jury, have answered the above and foregoing questions as herein
indicated, and herewith return same into court as our verdict.
(To be signed by the presiding juror if unanimous.)
------------------------------------
PRESIDING JUROR
(To be signed by those rendering the verdict if not unanimous.)
<TABLE>
<S> <C>
[ILLEGIBLE SIGNATURE] [ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
PEGGY D. LEON [ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
[ILLEGIBLE SIGNATURE] JOHN P. O'MALLEY
- ------------------------------------ ----------------------------------
[ILLEGIBLE SIGNATURE] [ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
[ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
[ILLEGIBLE SIGNATURE]
- ------------------------------------
</TABLE>
Charge of the Court, page 26.
<PAGE>
NO. 95-016749
KINGWOOD LAKES SOUTH, LP. (s) IN THE DISTRICT COURT OF
ET AL., (s)
(s)
VS. (s) HARRIS COUNTY, TEXAS
(s)
GERALD D. MURPHY AND (s)
DOUGLAS A. MURPHY, ET AL. (s) 151ST JUDICIAL DISTRICT
CHARGE OF THE COURT
LADIES AND GENTLEMEN OF THE JURY:
This case is submitted to you by asking questions about the facts, which
you must decide from the evidence you have heard in this trial. You are the sole
judges of the credibility of the witnesses and the weight to be given their
testimony, but in matters of law, you must be governed by the instructions in
this charge. In discharging your responsibility on this jury, you will observe
all the instructions which have previously been given you. I shall now give you
additional instructions which you should carefully and strictly follow during
your deliberations.
1. Do not let bias, prejudice or sympathy play any part in your
deliberations.
2. In arriving at your answers, consider only the evidence introduced here
under oath and such exhibits, if any, as have been introduced for your
consideration under the rulings of the court, that is, what you have
seen and heard in this courtroom, together with the law as given you by
the court. In your deliberations, you will not consider or discuss
anything that is not represented by the evidence in this case.
3. Since every answer that is required by the charge is important, no
juror should state or consider that any required answer is not
important.
4. You must not decide who you think should win, and then try to answer
the questions accordingly. Simply answer the questions, and do not
discuss nor concern yourselves with the effect of your answers.
5. You will not decide the answer to a question by lot or by drawing
straws, or by any other method of chance. Do not return a quotient
verdict. A quotient verdict means that the jurors agree to abide by the
result to be reached by adding together each juror's figures and
dividing by the number of jurors to get an average. Do not do any
trading on your answers; that is, one juror should not agree to answer
a certain question one way if others will agree to answer another
question another way.
<PAGE>
6. You may render your verdict upon the vote of ten or more members of the
jury. The same ten or more of you must agree upon all of the answers
made and to the entire verdict. You will not, therefore, enter into an
agreement to be bound by a majority or any other vote of less than ten
jurors. If the verdict and all of the answers therein are reached by
unanimous agreement, the presiding juror shall sign the verdict for the
entire jury. If any juror disagrees as to any answer made by the
verdict, those jurors who agree to all findings shall each sign the
verdict.
These instructions are given you because your conduct is subject to review
the same as that of the witnesses, parties, attorneys and the judge. If it
should be found that you have disregarded any of these instructions, it will be
jury misconduct and it may require another trial by another jury; then all of
our times will have been wasted.
The presiding juror or any other who observes a violation of the court's
instructions shall immediately warn the one who is violating the same and
caution the juror not to do so again.
When words are used in this charge in a sense that varies from the meaning
commonly understood, you are given a proper legal definition, which you are
bound to accept in place of any other meaning.
Answer "Yes" or "No" to all questions unless otherwise instructed. A "Yes"
answer must be based on a preponderance of the evidence unless otherwise
instructed. If you do not find that a preponderance of the evidence supports a
"Yes" answer, then answer "No." The term "preponderance of the evidence" means
the greater weight and degree of credible evidence introduced before you and
admitted in this case. Whenever a question requires an answer other than "Yes"
or "No," your answer must be based on a preponderance of the evidence unless
otherwise instructed.
Charge of the Court, page 2.
<PAGE>
QUESTION NO. 1
What sum of money, if paid now in cash, should be assessed against Gerald
Murphy as exemplary damages, if any?
"Exemplary damages" means an amount that you may in your discretion award
as an example to others and as a penalty or by way of punishment.
Factors to consider in awarding exemplary damages, if any, are-
(i) the nature of the wrong;
(ii) the character of the conduct involved;
(iii) the degree of culpability of Gerald Murphy;
(iv) the situation and sensibilities of the parties concerned;
(v) the extent of which such conduct offends a public sense of justice
and propriety; and
(vi) the net worth of Gerald Murphy.
If you answer questions about damages, answer each question separately. Do
not increase or reduce the amount in one answer because of the instructions
in or your answers to any other questions about damages. Do not speculate
about what any party's ultimate recovery may or may not be. Any recovery
will be determined by the court when it applies the law to your answers at
the time of judgment.
Charge of the Court, page 6.
<PAGE>
Answer in dollars and cents, if any.
Answer:
GERALD MURPHY $ 3,000,000.00
---------------
Charge of the Court, page 7.
<PAGE>
QUESTION NO. 2
What sum of money, if paid now in cash, should be assessed against Douglas
Murphy as exemplary damages, if any?
"Exemplary damages" means an amount that you may in your discretion award
as an example to others and as a penalty or by way of punishment.
Factors to consider in awarding exemplary damages, if any, are-
(i) the nature of the wrong;
(ii) the character of the conduct involved;
(iii) the degree of culpability of Douglas Murphy;
(iv) the situation and sensibilities of the parties concerned;
(v) the extent of which such conduct offends a public sense of justice
propriety; and
(vi) the net worth of Douglas Murphy.
If you answer questions about damages, answer each question separately. Do
not increase or reduce the amount in one answer because of the instructions
in or your answers to any other questions about damages. Do not speculate
about what any party's ultimate recovery may or may not be. Any recovery
will be determined by the court when it applies the law to your answers at
the time of judgment.
Charge of the Court, page 8.
<PAGE>
Answer in dollars and cents, if any.
Answer:
DOUGLAS MURPHY $500,000.00
----------
Charge of the Court, page 9.
<PAGE>
QUESTION NO. 3
What sum of money, if paid now in cash, should be assessed against ARI as
exemplary damages, if any?
"Exemplary damages" means an amount that you may in your discretion award
as an example to others and as a penalty or by way of punishment.
Factors to consider in awarding exemplary damages, if any, are -
(i) the nature of the wrong;
(ii) the character of the conduct involved;
(iii) the degree of culpability of ARI;
(iv) the situation and sensibilities of the parties concerned;
(v) the extent of which such conduct offends a public sense of
justice and propriety; and
(vi) the net worth of ARI.
If you answer questions about damages, answer each question separately. Do
not increase or reduce the amount in one answer because of the instructions
in or your answers to any other questions about damages. Do not speculate
about what any party's ultimate recovery may or may not be. Any recovery
will be determined by the court when it applies the law to your answers at
the time of judgment.
Exemplary damages can be assessed against ARI or ERLY as a principal
because of an act by an agent if, but only if:
(a) The principal authorized the doing and the manner of the act, or
(b) The agent was unfit and the principal was reckless in employing
him, or
(c) The agent was employed in a managerial capacity and was acting in
the scope of employment, or
(d) The employer or a manager of the employer's ratified or approved
the act.
Charge of the Court, page 10.
<PAGE>
ANSWER IN DOLLARS AND CENTS, IF ANY.
ANSWER:
ARI $ 100,000.00
------------
Charge of the Court, page 11.
<PAGE>
QUESTION NO 4.
What sum of money, if paid now in cash, should be assessed against ERLY as
exemplary damages, if any?
"Exemplary damages" means an amount that you may in your discretion award
as an example to others and as a penalty or by way of punishment.
Factors to consider in awarding exemplary damages, if any, are--
(i) the nature of the wrong;
(ii) the character of the conduct involved;
(iii) the degree of equipability of ERLY;
(iv) the situation and sensibilities of the parties concerned;
(v) the extent of which such conduct offends a public sense of
justice and propriety; and
(vi) the net worth of ERLY.
If you answer questions about damages, answer each question separately.
Do not increase or reduce the amount in one answer because of the
instructions in or your answers to any other questions about damages.
Do not speculate about what any party's ultimate recovery may or may not
be. Any recovery will be determined by the court when it applies the law
to your answers at the time of judgment.
Exemplary damages can be assessed against ARI or ERLY as a principal
because of an act by an agent if, but only if:
(a) The principal authorized the doing and the manner of the act,
or
(b) The agent was unfit and the principal was reckless in employing
him, or
(c) The agent was employed in a managerial capacity and was acting
in the scope of employment, or
(d) The employer or a manager of the employer's ratified or approved
the act.
Charge of the Court, page 12.
<PAGE>
ANSWER IN DOLLARS AND CENTS, IF ANY.
ANSWER:
ERLY $ 100,000.00
------------
Charge of the Court, page 13.
<PAGE>
After you retire to the jury room, you will select your own presiding
juror. The first thing the presiding juror will do is to have this complete
charge read aloud and then you will deliberate upon your answers to the
questions asked.
It is the duty of the presiding juror --
1. to preside during your deliberations,
2. to see that your deliberations are conducted in an orderly manner and
in accordance with the instructions in this charge,
3. to write out and hand to the bailiff any communications concerning the
case that you desire to have delivered to the judge,
4. to vote on the questions,
5. to write your answers to the questions in the spaces provided, and
6. to certify to your verdict in the space provided for the presiding
juror's signature or to obtain the signatures of all the jurors who
agree with the verdict if your verdict is less than unanimous.
You should not discuss the case with anyone, not even with other members of
the jury, unless all of you are present and assembled in the jury room. Should
anyone attempt to talk to you about the case before the verdict is returned,
whether at the courthouse, at your home, or elsewhere, please inform the judge
of this fact.
When you have answered all the questions you are required to answer under
the instructions of the judge and your presiding juror has placed your answers
in the spaces provided and signed the verdict as presiding juror or obtained the
signatures, you will inform the bailiff at the door of the jury room that you
have reached a verdict, and then you will return into court with your verdict.
/s/ C. B.
-------------------------------
JUDGE PRESIDING
FOR JUDGE CAROLINE BAKER
Charge of the Court, page 14.
<PAGE>
CERTIFICATE
We, the jury, have answered the above and foregoing questions as herein
indicated, and herewith return same into court as our verdict.
(To be signed by the presiding juror if unanimous.)
------------------------------------
PRESIDING JUROR
(To be signed by those rendering the verdict if not unanimous.)
<TABLE>
<S> <C>
[ILLEGIBLE SIGNATURE] [ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
PEGGY D. LEON [ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
[ILLEGIBLE SIGNATURE] [ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
JOHN P. O'MALLEY [ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
[ILLEGIBLE SIGNATURE]
- ------------------------------------ ----------------------------------
[ILLEGIBLE SIGNATURE]
- ------------------------------------
</TABLE>
Charge of the Court, page 15.
