Court Opinion

ID: 4071910
Source: CourtListenerOpinion
Date Created: 2016-09-30 02:26:31.732134+00
Date Added: 2024-06-11T14:34:30.880317
License: Public Domain

ACCEPTED
                                                                                            01-13-00853-CV
                                                                                 FIRST COURT OF APPEALS
                                                                                         HOUSTON, TEXAS
                                                                                     10/19/2015 11:25:07 AM
                                                                                      CHRISTOPHER PRINE
                                                                                                     CLERK

                              No. 01-13-00853-CV
                                                                           FILED IN
                               IN THE COURT OF APPEALS              1st COURT OF APPEALS
                                                                        HOUSTON, TEXAS
                            FOR THE FIRST DISTRICT OF TEXAS
                                                                   10/19/2015 11:25:07 AM
                                    HOUSTON, TEXAS
                                                                    CHRISTOPHER A. PRINE
                                                                            Clerk

                            DERNICK RESOURCES, INC.
                                           v.

                DAVID WILSTEIN AND LEONARD WILSTEIN,
                 INDIVIDUALLY AND AS TRUSTEE OF THE
            LEONARD AND JOYCE WILSTEIN REVOCABLE TRUST

                 On Appeal From the 164th Judicial District Court
                 Of Harris County, Texas; Cause No. 2002-31310

                          Reply In Support of
                Emergency Motion to Increase Amount
                of Deposit in Lieu of Supersedeas Bond

Britton D. Monts            Tom C. McCall               Kendall M. Gray
Texas Bar No. 14303900      Texas Bar No. 13350300      Texas Bar No. 00790782
bmonts@themontsfirm.com     tmccall@themccallfirm.com   kendallgray@andrewskurth.com
THE MONTS FIRM              David B. McCall             Georgia L. Lucier
401 Congress Ave.           Texas Bar No. 13344500      Texas Bar No. 24043523
Suite 1540                  dmccall@themccallfirm.com   georgialucier@andrewskurth.com
Austin, Texas 78701-3851    THE McCALL FIRM             Kathryn Boatman
Telephone: (512) 474-6092   3660 Stoneridge Road        Texas Bar No. 24062624
Facsimile: (512) 692-2981   Suite F-102                 kathrynboatman@andrewskurth.com
                            Austin, Texas 78746         ANDREWS KURTH LLP
                            Telephone: (512) 477-4242   600 Travis Street, Suite 4200
                            Facsimile: (512) 477-2271   Houston, Texas 77002-2929
                                                        Telephone: (713) 220-3981
                                                        Facsimile: (713) 238-7183

                ATTORNEYS FOR APPELLEES AND CROSS-APPELLANTS
            DAVID WILSTEIN AND LEONARD WILSTEIN, INDIVIDUALLY AND AS
          TRUSTEE OF THE LEONARD AND JOYCE WILSTEIN REVOCABLE TRUST

HOU:3601313.3
                              TABLE OF CONTENTS

I.      Introduction And Summary .............................................................1

II.     Arguments And Authorities .............................................................2

III.    Conclusion And Prayer .....................................................................6

                                                -i-
HOU:3601313.3
                                TABLE OF AUTHORITIES

CASES

Black v. Epperson,
   40 Tex. 162 (1874) .....................................................................................4

In re City of Cresson,
   245 S.W.3d 72 (Tex. App.—Fort Worth 2008, no pet.)........................4

Edwards Aquifer Auth. v. Chem. Lime, Ltd.,
  291 S.W.3d 392 (Tex. 2009) (Willett, J., concurring) ....................... 1, 2

Harris v. Sterquell,
  No. 07-01-0071-CV, Order (Tex. App.—Amarillo 2004) ............... 1, 5

In re Long,
   984 S.W.2d 623 (Tex. 1999)......................................................................5

Long v. Castle Tex. Prod. Ltd. P’ship,
   426 S.W.3d 73 (Tex. 2014)........................................................................3

Nat’l Convenience Stores, Inc. v. Martinez,
  763 S.W.2d 960 (Tex. App.—Houston [1st Dist.] 1989,
  no writ) ......................................................................................................6

Poplar Grove Planting & Ref. Co., Inc. v. Bache Halsey Stuart,
  Inc.,
  600 F.2d 1189 (5th Cir. 1979) ...................................................................6

Waffenschmidt v. MacKay,
  763 F.2d 711 (5th Cir. 1985) .....................................................................2

RULES

Tex. R. App. P. 18.1(a) ..................................................................................2

Tex. R. App. P. 24.1. ......................................................................................3

Tex. R. App. P. 24.1(a) ..................................................................................1

Tex. R. App. P. 24.2(a)(1)..............................................................................3
                                                      -ii-
HOU:3601313.3
Tex. R. App. P. 24.4(a)(1)..............................................................................4

Tex. R. App. P. 24.4(b) ..................................................................................3

Tex. R. App. P. 51.1(b) ..................................................................................2

Tex. R. Civ. P. 301 ..........................................................................................3

OTHER AUTHORITIES

6 Roy W. McDonald & Elaine A. Carlson,
   Texas Civil Practice § 14:20 (2d ed. 1998) .......................................... 4, 5

                                                    -iii-
HOU:3601313.3
                            I.
                 INTRODUCTION AND SUMMARY

        A trial court judgment that is still subject to review may
nevertheless be enforced unless it is superseded. But Dernick argues
that it need not supersede this Court’s judgment unless and until it is
no longer subject to review—at which point supersedeas is no longer
even possible. Little wonder the only court to have considered this
question rejected Dernick’s argument in an order drafted by current
Supreme Court Justice Phil Johnson. Harris v. Sterquell, No. 07-01-
0071-CV, Order (Tex. App.—Amarillo 2004) (attached as Exhibit A).
        There is only one judgment in this (or any other) action. As of
now, the only judgment is this Court’s judgment. Whether or not the
trial court would be in a position to enforce the judgment, this Court
has jurisdiction to superintend its own judgment. The rules require
that “the judgment” be superseded while it is being reviewed. Tex. R.
App. P. 24.1(a). Absent that, it is subject to being enforced. As of now,
it is not fully secured, and Dernick does not even dispute the
calculation. This Court has increased the amount of compensatory
damages in the judgment, and Dernick must accordingly increase its
deposit in lieu of supersedeas bond by $448,985.59.
        Dernick says, “It ain’t over ‘til it’s over,” quoting Justice

Willett’s concurring opinion in Edwards Aquifer Authority v. Chemical
Lime, Ltd., 291 S.W.3d 392, 413 (Tex. 2009) (Willett, J., concurring). But

HOU:3601313.3
Justice Willett’s point was that it is over when the mandate issues.
There is nothing to supersede. Dernick’s argument is circular: it does

not have to increase its deposit until after this Court issues its
mandate, at which point supersedeas is no longer even possible. The
mandate will not issue until the Texas Supreme Court either denies

the petition for review or issues its own opinion and judgment. Tex.
R. App. P. 18.1(a). At that point, Dernick cannot supersede the
judgment or avoid execution. Unless the Court is prepared to trade in

tautologies and put the Wilsteins’ recovery at the mercy of Dernick’s
ingenuity for avoiding execution, the Court must grant the Wilsteins’
motion and enforce the rule.

                            II.
                 ARGUMENTS AND AUTHORITIES

        Dernick argues that the amount of its deposit should not be
increased “prior to issuance of the mandate.” Resp. at 3. But when the
Court issues its mandate, the case is over and enforcement can begin
immediately: “the court has closed the book on its review and is
once-and-forall finished.” Edwards Aquifer Auth. v. Chem. Lime, Ltd.,
291 S.W.3d 392, 413 (Tex. 2009) (Willett, J., concurring). At that point,
“the appellate court’s judgment must be enforced.” Tex. R. App. P.
51.1(b). The Wilsteins would “no longer need a supersedeas bond—

they may execute on the judgment.” Waffenschmidt v. MacKay, 763
F.2d 711, 727 (5th Cir. 1985).

                                   -2-
HOU:3601313.3
        Dernick essentially argues that there are two judgments in this
case: one that is effective (the trial court’s), and one that is not (this

Court’s). But that is contrary to settled law. Tex. R. Civ. P. 301 (“Only
one final judgment shall be rendered in any cause . . . .”). When the
appellate court renders an amended judgment, for example, post-

judgment interest accrues on the amount in the amended judgment
but is measured from the date of the trial court’s judgment, even
though it was wrong. Long v. Castle Tex. Prod. Ltd. P’ship, 426 S.W.3d
73, 81 (Tex. 2014). The judgment is the one that the trial court should
have rendered. So too here: there is one judgment in this case—the
trial court’s as amended by this Court—and it must be superseded.

Tex. R. App. P. 24.1.
        Dernick argues to the contrary that, because it suspended the
trial    court’s   incorrect   judgment,   enforcement    is   suspended
throughout the appeal, changed circumstances notwithstanding. See
Resp. at 6. But again, Dernick is flouting the rules.
        For example, Rule 24.4(a)(1) allows the Court to review the
sufficiency of the security. Whether the security is sufficient depends
on “the sum of compensatory damages awarded in the judgment,
interest for the estimated duration of the appeal, and costs awarded
in the judgment.” Tex. R. App. P. 24.2(a)(1). And the Court’s review
may be based on conditions that changed after the trial court’s order.
Tex. R. App. P. 24.4(b). That means the Court must review changes in

                                    -3-
HOU:3601313.3
the amount of compensatory damages, interest, and costs. Dernick
wants the Court to ignore that rule.

        Of course, neither Dernick nor Professor Carlson identify
exactly what changed conditions would warrant this Court’s review
of the sufficiency of the bond. See 6 Roy W. McDonald & Elaine A.

Carlson, Texas Civil Practice § 14:20 (2d ed. 1998). And it is difficult to
imagine any. The changes cannot be in the judgment debtor’s net
worth, because that is a separate question from the sufficiency of the

amount. Tex. R. App. P. 24.4(a)(1) (“The appellate court may review
the sufficiency . . . of the amount of security, but when the judgment
is for money, the appellate court must not modify the amount of

security to exceed the limits [based on the judgment debtor’s net
worth]”). The changed conditions here—an increased amount of
compensatory damages and interest—are exactly what the rules
require this Court to consider.
        Dernick makes much of the fact that a trial court clerk is
“without authority to issue execution” until the mandate issues.
Resp. at 1 n.2, 3. But in the cases Dernick cites, the clerk was without
authority because the judgment debtor had filed a sufficient
supersedeas bond. Black v. Epperson, 40 Tex. 162, 180 (1874).1 Here, the
bond is no longer sufficient.

        See also In re City of Cresson, 245 S.W.3d 72, 74 (Tex. App.—Fort Worth
        1

2008, no pet.) (holding that execution was delayed until the mandate issued

                                      -4-
HOU:3601313.3
        Indeed, in the only case to have considered this situation, the
Amarillo Court of Appeals held—in an order written by current

Texas Supreme Court Justice Phil Johnson—that a modified
judgment by the intermediate court is a changed condition. Harris v.
Sterquell, No. 07-01-0071-CV, Order (Tex. App.—Amarillo 2004)

(attached as Exhibit A). The judgment debtor made the same
arguments, and cited many of the same cases, as Dernick. But, the
court held, “issuance of mandate by an appellate court is not

necessary to render its judgment final.” Id. at 5. On that basis, the
court affirmed the trial court’s order increasing the amount of
security even though the appeal to the Texas Supreme Court was still

pending (and the mandate had therefore not issued).
        Dernick has not cited a single case where the judgment was
modified to provide more in compensatory damages but execution
on the entire amount was still suspended. Nor does Professor
Carlson consider that situation. See 6 Roy W. McDonald & Elaine A.
Carlson, Texas Civil Practice § 14:20 (2d ed. 1998). In fact, case law is
clear that if the bond is insufficient, as here, execution is allowed
immediately even if the appeal is ongoing—despite the mandate not

because “[a] municipality may appeal a judgment without giving a supersedeas
or cost bond”); In re Long, 984 S.W.2d 623, 626 (Tex. 1999) (same).

                                    -5-
HOU:3601313.3
having issued. See Nat’l Convenience Stores, Inc. v. Martinez, 763
S.W.2d 960 (Tex. App.—Houston [1st Dist.] 1989, no writ).

        The Court must remember the purpose of supersedeas: it
“secures the prevailing party against any loss sustained as a result of
being forced to forgo execution on a judgment during the course of

an ineffectual appeal.” Poplar Grove Planting & Ref. Co., Inc. v. Bache
Halsey Stuart, Inc., 600 F.2d 1189, 1191 (5th Cir. 1979). Dernick says
supersedeas “defers payment until the matter is resolved.” Resp. at 7.

That is the point: when the mandate issues, the matter is resolved,
and no supersedeas is needed. Supersedeas is not “payment” to the
other side; it is a bond (or a deposit, as here) to protect the judgment

creditor.

                              III.
                     CONCLUSION AND PRAYER

        The Wilsteins request that the Court increase the deposit in lieu
of supersedeas bond by $448,985.59. Should Dernick fail to comply,
the Wilsteins request permission to execute on the amended
judgment.

                                    -6-
HOU:3601313.3
                Respectfully submitted,

                By:/s/Kendall M. Gray
                  Kendall M. Gray
                  Texas Bar No. 00790782
                  kendallgray@andrewskurth.com
                  Georgia L. Lucier
                  Texas Bar No. 24043523
                  georgialucier@andrewskurth.com
                  Kathryn Boatman
                  Texas Bar No. 24062624
                  kathrynboatman@andrewskurth.com
                  ANDREWS KURTH LLP
                  600 Travis Street, Suite 4200
                  Houston, Texas 77002-2929
                  Telephone: (713) 220-3981
                  Facsimile: (713) 238-7183

                  Britton D. Monts
                  Texas Bar No. 14303900
                  bmonts@themontsfirm.com
                  THE MONTS FIRM
                  401 Congress Ave., Suite 1540
                  Austin, Texas 78701-3851
                  Telephone: (512) 474-6092
                  Facsimile: (512) 692-2981

                 -7-
HOU:3601313.3
                  Tom C. McCall
                  Texas Bar No. 13350300
                  tmccall@themccallfirm.com
                  David B. McCall
                  Texas Bar No. 13344500
                  dmccall@themccallfirm.com
                  THE McCALL FIRM
                  3660 Stoneridge Road, Suite F-102
                  Austin, Texas 78746
                  Telephone: (512) 477-4242
                  Facsimile: (512) 477-2271

                Attorneys for Appellees and
                Cross-Appellants David Wilstein
                and Leonard Wilstein, Individually
                and as Trustee of the Leonard and
                Joyce Wilstein Revocable Trust

                 -8-
HOU:3601313.3
                      CERTIFICATE OF SERVICE

      I hereby certify that on October 19, 2015, true and correct copies
of the above and foregoing instrument have been e-served on the
following counsel for Dernick Resources, Inc.:

                Alan B. Daughtry
                alan@alandaughtrylaw.com
                675 Shartle Circle
                Houston, Texas 77024

                Kathrine M. Silver
                ksilver@jw.com
                Richard A. Howell
                rahowell@jw.com
                Jackson Walker L.L.P.
                1401 McKinney, Suite 1900
                Houston, Texas 77010

                D. Patrick Long
                plong@pattonboggs.com
                Patton Boggs LLP
                2000 McKinney Ave., Suite 1700
                Dallas, TX 75201

                                   /s/Kendall M. Gray
                                   Kendall M. Gray

                                    -9-
HOU:3601313.3
EXHIBIT A
                                  NO. 07-01-0071-CV

                             IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                       PANEL E

                                NOVEMBER 8, 2004
                         ______________________________

           RICHARD O. HARRIS, INDIVIDUALLY AND AS TRUSTEE OF
           RICHARD O. HARRIS PROFIT SHARING TRUST, APPELLANT

                                           V.

       RICHARD K. ARCHER, M.D., INDIVIDUALLY AND AS TRUSTEE OF
     THE RICHARD K. ARCHER, M.D., P.A. PROFIT SHARING PLAN & TRUST
        AND REBA LAND, INC., APPELLEES AND CROSS-APPELLANTS

                                           V.

         STEVE W. STERQUELL, INDIVIDUALLY AND AS TRUSTEE OF
     STEVE W. STERQUELL PROFIT SHARING TRUST, CROSS-APPELLEES

                       _________________________________

             FROM THE 47TH DISTRICT COURT OF RANDALL COUNTY;

                  NO. 40,125-A; HONORABLE HAL MINER, JUDGE
                       _______________________________

Before JOHNSON, C.J., and QUINN, J., and BOYD, S.J.1

                                        ORDER

      Pending before the Court is a Motion to Review Excessiveness of Security and for

Temporary Relief filed by Richard K. Archer, Individually and as Trustee of the Richard K.

      1
      John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by
assignment.
Archer, M.D., P.A. Profit Sharing Trust (collectively, “Archer”) and Reba Land, Inc. Archer

and Reba seek relief from a trial court order increasing the amount of security required to

suspend enforcement of this court’s judgment, pending appeal to the Texas Supreme

Court. See TEX . R. APP. P. 24.2 We deny relief.

       Steve W. Sterquell, Individually and as Trustee for the Steve W. Sterquell Profit

Sharing Plan (collectively, “Sterquell”) and Richard O. Harris, Individually and as Trustee

of the Richard O. Harris Profit Sharing Trust (collectively, “Harris”), sued Archer and Reba.

Following jury trial, judgment was entered in favor of Sterquell for $916,635.22; a take-

nothing judgment was entered as to Harris. Archer and Reba superseded Sterquell’s

judgment and appealed. Harris appealed the take-nothing judgment.

       On appeal, this court reduced the judgment in favor of Sterquell to $574,424 and,

as reduced, affirmed. Harris’s take-nothing judgment was reversed and judgment was

rendered for Harris in the amount of $574,424. See Harris v. Archer, 134 S.W.3d 411

(Tex.App.–Amarillo 2004, pet. filed). Archer and Reba filed a petition for discretionary

review in the Texas Supreme Court, which remains pending. Mandate as to our judgment

has not been sought, and none has issued. See TRAP 18.1(a),(c).

       Subsequent to the filing of petition for discretionary review in the Supreme Court by

Archer and Reba, and after this court lost plenary power over its judgment, the trial court

entered an order reciting that it held a hearing, reviewed evidence, and found that, “[T]he

       2
      Reference to a rule of appellate procedure hereafter will be by reference to
“TRAP_.”

                                             -2-
decision of the court of appeals, and the post-judgment interest that has accrued since the

date of the judgment, constitute a change of circumstances which warrants modification

of the amount of security to suspend enforcement of judgment heretofore deposited by

[Archer and Reba].” The order specified an increased amount of security required of

Archer and Reba in order to suspend enforcement of judgment. Archer and Reba move

for appellate review of the order pursuant to TRAP 24.4(a) and (c).

       Having granted temporary stay of the trial court’s order, we now consider the

additional relief Archer and Reba request: (1) staying of all efforts to collect on the

judgment pending further proceedings; (2) remand to the trial court for entry of findings of

fact; and (3) after entry of findings of fact, entry of a scheduling order for full briefing on the

merits.3

       The complaint Archer and Reba make as to the trial court’s order is that it requires

them to post security to prevent enforcement of this court’s judgment in favor of Harris

even though no mandate has issued. They argue that the trial court abused its discretion

by acting contrary to controlling law in making its order, see TRAP 24.4(a)(5), because the

appellate court judgment is not final until mandate issues. Based upon their premise that

the appellate judgment is not final until mandate issues, Archer and Reba further reason

that Harris cannot execute on the appellate court judgment and the trial court cannot

require security to be posted for something which does not exist. Archer and Reba rely on

State v. Miller, 183 S.W.2d 278 (Tex.Civ.App.–Waco 1944, no writ), and In re Long, 984

       3
         We address only arguments made by Archer and Reba which are material to the
relief they request. See TRAP 47.1.

                                               -3-
S.W.2d 623 (Tex.1999), for support. They cite Miller for the proposition that the judgment

of a court of appeals is not a final judgment while the appeal is pending before the

Supreme Court, and Long for the proposition that neither a trial court judgment nor the

modification of that judgment by a court of appeals can be enforced until all appeals

relating to the judgment are exhausted and mandate enforcing the appellate court

judgment is issued.

        In Miller, the question was whether the appellate court should issue a writ of

prohibition and an injunction to prevent what the relators urged was a trial court proceeding

re-litigating issues determined in a previous suit between the parties. The court of appeals

noted that its affirmance of the trial court judgment in the prior suit became a final judgment

of the court of appeals when the Supreme Court refused application for writ of error, and

that once the appellate judgment became final it was enforceable by any appropriate writ

which the court of appeals was authorized to issue. Miller, 183 S.W.2d at 280.

       In Long, the trial court enjoined the Dallas County District Clerk from collecting

certain types of fees as filing fees. The Clerk appealed. The notice of appeal filed by the

Clerk operated as a supersedeas bond. Id. at 625. As relevant to this proceeding, the

court of appeals modified the injunction and, as modified, affirmed it. Dallas County v.

Sweitzer, 881 S.W.2d 757, 771 (Tex.App.–Dallas 1994, writ denied).                 Sweitzer’s

application for writ of error was denied by the Supreme Court. The court of appeals

subsequently issued mandate which contained an order enjoining the Dallas County

District Clerk from collecting certain filing fees. The trial court later held the Clerk in

contempt for collecting fees which the court of appeals had adjudged improper. The

                                              -4-
Supreme Court held that the Clerk could not be held in contempt for collecting the filing

fees before the court of appeals issued mandate. Long, 984 S.W.2d at 626.

       Long and Miller are inapposite. The matter now before us does not present the

question of whether our judgment is final for the purpose of precluding a subsequent suit

between Archer, Reba, Sterquell and Harris, as was the issue in Miller. And, in Long there

was no dispute about how the type or amount of security to supersede judgments of the

trial and appellate court was determined. The question was at what point, if any, the Clerk

violated a court order to stop collecting the filing fees in question.

       Contrary to the contention of Archer and Reba, issuance of mandate by an appellate

court is not necessary to render its judgment final. See Universe Life Ins. Co. v. Giles, 982
S.W.2d 488, 491 (Tex.App.–Texarkana 1998, pet. denied). Mandate is official notice of

the appellate court action to the court below, advising it of the action of the appellate court

and directing that the appellate court’s judgment be recognized and obeyed. The rules

concerning mandate are procedural, and are not necessary to jurisdiction of the trial court

to take further action. Id.

       Moreover, a judgment creditor is not required to wait until a judgment becomes final

by the exhaustion of all appeals before having execution issued. Once a judgment is final

for purposes of appeal, the creditor is generally entitled to have the judgment enforced and

execution issued. See TEX . R. CIV. P. 627; Hood v. Amarillo Nat’l Bank, 815 S.W.2d 545,

548 (Tex. 1991). But, it is the policy of this state to allow enforcement of the judgment to

be suspended pending appeal, provided the judgment creditor is secured against loss

                                              -5-
which might be suffered through an unsuccessful appeal. See Bryan v. Luhning, 106
S.W.2d 403, 404 (Tex.Civ.App.–Galveston 1937, no writ).

       The part of our judgment by which we reversed the trial court’s take-nothing

judgment as to Harris and rendered judgment for him places Harris in the posture of a

judgment creditor. The trial court did not abuse its discretion in considering our judgment,

which is final for purposes of appeal, as a change of circumstances within the meaning of

TRAP 24.3(a).

       Archer and Reba do not present a record showing that they requested the trial court

to make findings of fact.4 Absent a showing of such request, we deem nothing to be

presented for our review as to the matter and decline to direct the trial court to make

findings of fact. See TRAP 33.1(a). And, in view of our conclusion that the trial court did

not abuse its discretion in considering our decision and judgment as a change of

circumstances, we also decline to stay the trial court’s order pending further briefing.

           We vacate our stay of the trial court’s order dated August 12, 2004. The relief

sought in the motion presented by Archer and Reba is denied.

                                                  Phil Johnson
                                                  Chief Justice

Quinn, J., not participating.

       4
        Our review is limited because Archer and Reba have not presented a clerk’s record
or transcript of the trial court hearing.

                                            -6-