Letter,Correspondence: DYER CRAIG vs. DYER CUSTOM INSTALLATIONDCX

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                                MATTHEW A. >

mnowak@ns-la c

NOWAK & STAUCH

A Limited Liability Partnership

10000 N. CeNTRaL Expressway, Suite 1040

wwww.ns-law.net

July 24, 2012

Vis HAND DELIVERY

Honorable Emily G. Tobolowsky
298™ JUDICIAL DISTRICT CourT
Dallas County District Courts
600 Commerce St., Box 822
Dallas, TX 75202

Re: Cause No. 04-01100-M; Craig Dyer _y. Dyer Custom Installation, Inc. (DC).
Joseph Geeting, Susan Lambert, Richard Geeting and Lauri_Geeting/Pro
Plumbing & Appliance Installation, Inc. f/k’a Dyer Custom Installation, Inc. v.
Craig Dyer, Melisa Contreras and the Estate of Larry Dyer; Filed in the 298"
Judicial District Court of Dallas County, Texas; Our File No. 0679.002

Dear Judge Tobolowsky:

While we agree the Court has broad discretion in balancing equities to correct
shareholder oppression, we disagree with Mr. Murto’s approach in his July 23° letter to the
Court in which he attempts to value 510 shares of Pro Plumbing & Appliance Installation, Inc.
f/k/a Dyer Custom Installation, Inc. (“DCI”) at $40,499.10. This valuation is irmproper because
Plaintiff is utilizing a valuation from February of 2004 to provide a current 2012 value of DCI’s
510 shares. Even worse, if the Court recalls, the $23,824 valuation was not based upon any
expert testimony or ownership testimony at trial, but rather was picked out of a hat by Mr.
Oncken and should not be considered for any sort of equitable remedy. Not surprisingly, the
$79.41 value of one DCI share provided by Mr. Murto is much tower than the November 1, 2010
valuation conducted by Douglas Rudiey and conveniently favors Craig Dyer in this situation
while ignoring the prior 2010 valuation that took considerable time. effort and cost.

Defendants further object to Plaintiff's revised proposed Final Judgment on the following -
grounds:

1) Plaintiff's newly added paragraph 7 provides that Craig Dyer recover $123,197 in
attorney’s fees from DCI for the services he provided DCI in bringing the derivative
lawsuit against Defendants. As the Court will recall, attorney's fees awarded in
Question No. 27 were predicated on an answer of “yes” to Question No. 2 and
Question No. 10 involving individual causes of action by Craig Dyer against Joseph
Geeting for failure to comply with the 80/20 Agreement and for statutory fraud
concerning the December 2002 Agreement in which Joseph Geeting acquired fifiy-
one percent (51%) of DCL. These individual causes of action in no way involvedNowak & STAUCH, LLP

Honorable Emily G. Tobolowsky
July 24, 2012
Page 2

DCI’s derivative cause of action. Therefore, Texas law does not provide Plaintiff's
requested relief as proposed in paragraph 7;

2) Texas law does not provide for DCI’s award against Craig Dyer for damages and
prejudgment interest to be offset by attorneys’ fees awarded Craig Dyer on the
derivative causes of action because Craig Dyer was not awarded attorneys’ fees on
the derivative causes of action. Thus, paragraph 8 is improper;

3) Paragraph 9 is improper in that it requires Joseph Geeting to sell all 510 shares of
DCI to Craig Dyer for $40,499.10 based upon Mr. Murto’s valuation which is grossly
undervalued compared to the November 1, 2010 valuation and is not based upon any
current expert valuation;

4) There is no basis for paragraph 11 allowing $40,499.10 to be set off against what
Craig Dyer owes Joseph Geeting and this set off conveniently only benefits Craig
Dyer;

5) There is no basis for paragraph 12 that would require DC] to show on its books the
transfer of the 510 shares from Joseph Geeting to Craig Dyer until this Court
determines a fair market value of the DCI shares; and

6) There is no basis for paragraph 13 allowing for a setoff for attorney’s fees being
awarded to Craig Dyer from DCI.

Mr. Murto’s revised proposed Final Judgment is advantageous to his client Craig Dyer
and is not based upon the jury’s findings or a proper valuation of DCI. Again, we respectfully
request that this Court consider the attached proposed Final Judgment that was ettached to my
correspondence of November 23, 2011. See attached November 23, 2011 correspondence with
proposed Final Judgment and other attachments. As you referenced again during the conference
call last week, these parties need a divorce. We continue to believe the only way to achieve a
divorce is through correction of the verdict as proposed in the attached proposed Finai Judgment.
Once that has been accomplished, this Court can fashion a less drastic equitable relief than
receivership, such as a forced buyout at a fair price. See Ritchie v. Rupe, 339 S.W.3d 275, 285-
86 (Tex. App. — Dallas 2011, pet. granted). If this Court were to entertain Plaintiff's revised
proposed Final Judgment, the problems associated with the 80/20 Agreement, the fraudulent
inducement claim concerning the December 2002 Agreement, and the statutory fraud damages
are still not resolved including Plaintiff's late amendments to his petition after the evidence
closed and the issues of lack of consideration for the 80/20 Agreement, the failure of Plaintiff to
ever exercise his option on the 80/20 Agreement, ratification and statute of limitations issues
concerning the December 2002 Agreement, and lack of valuation for the majority of the damages
awarded Plaintiff.

As discussed at the March 29, 2012 hearing, the hard economic times have taken their
toll on DCI’s operations. However, this fact and the fact that DCI never had an exclusiveNoWAK & STAUCH, LLP

Honorable Emily G, Tobolowsky
July 24, 2012
Page 3

contract with the Home Depot {its biggest client) should not be used by Plaintiff and his counsel
as a reason for a forced buy-out at a jess than current valuation or the reason to appoint a
receiver. Plaintiff and his counsel have been provided financials of DCI since the jury trial in
July of 2010 and to date have failed to show any wrongdoing or dilution of assets by Joseph
Geeting since the verdict. Moreover, Plaintiff and his counsel have even resisted substantial
settlement offers by Mr. Geeting based upon the November 2010 valuation of DCI. Now, that
DCI is struggling, Plaintiff and his counsel want to use this as leverage for the Court to execute
Plaintiffs revised proposed Final Judgment. While we agree that something needs to be done,
this Court agreeing to the language in Plaintiff's revised proposed Final Judgment gets neither
party any closer to a fair and equitable divorce.

Lastly, I did not see any reference to the appointment of a receiver by Plaintiff or
suggested names of individuals to be appointed receivers in Mr. Murto’s letter. If Plaintiff or the
Court is still entertaining the appointment of a receiver, we respectfully request a receiver that
has no ties to Plaintiff and his numerous counsels. Defendants and their counsel will make
themselves available to appear before the Court, either in person or by telephone, to discuss the
attached proposed Final Judgment sent on November 23, 2011 and the problems with Mr.
Murto’s revised proposed Final Judgment.

Sincerely,

Jie! A bred,

Matthew A. Nowak

MAN/ksr
Enclosure

cc: VIA FAX
Mitchell Madden
LAW OFFICES OF MITCHELL MADDEN
Four Hickory Centre
1755 Wittington Place, Suite 300
Dallas, TX 75234

VIA FAX

Kevin Oncken

Jeffrey Uzick

UziCK & ONCKEN, P.C.
238 Westcott

Houston, TX 77071