                                                            1



 1                    CAUSE NUMBER 2002-31310

 2   DAVID WILSTEIN, et al.   :     I N T H E D I S T R IFILED
                                                         C T CINO U R T
                              :                   1st COURT OF APPEALS
 3   v.                       :     H A R R I S C O U NHOUSTON,
                                                       T Y , T E XTEXAS
                                                                   AS
                              :                    10/6/2015 4:55:59 PM
 4   DERNICK RESOURCES, INC., :                    CHRISTOPHER A. PRINE
     et al.                   :     164th     J U D I C I A LClerk
                                                                DISTRICT
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10     *************************************************

11                      SEPTEMBER 25, 2015

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17            On the 25th day of September, 2015, the

18   following proceedings came on to be heard in the

19   above-entitled and -numbered cause before the

20   Honorable Alexandra Smoots-Hogan, Judge Presiding,

21   held in Houston, Harris County, Texas.

22            Proceedings reported by Certified Shorthand

23   Reporter and Machine Shorthand/Computer-Aided

24   Transcription.

25

                      DONNA KING HAMMER, CSR
                      164TH OFFICIAL REPORTER
                          (713) 368-6256
                                               2



 1
                     A P P E A R A N C E S
 2

 3   FOR THE PLAINTIFFS:
          Mr. Britton D. Monts, SBN 14033900
 4        THE MONTS FIRM
          P.O. Box 164287
 5        Austin, Texas   78716
          Telephone: 512-382-6092
 6        Facsimile: 512-579-0897

 7
     FOR THE DEFENDANTS:
 8        Mr. D. Patrick Long, SBN 12515500
          PATTON BOGGS, L.L.P.
 9        2000 McKinney Avenue, Suite 1700
          Dallas, Texas  75201
10        Telephone: 214-758-1505
          Facsimile: 214-758-1550
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                    DONNA KING HAMMER, CSR
                    164TH OFFICIAL REPORTER
                        (713) 368-6256
                                                     3



 1                      P R O C E E D I N G S

 2                 THE COURT:     We're on the record in

 3   Cause Number 2002-31310 -- goodness gracious.       That's

 4   old. -- Lakota Resources versus Pathex Petroleum, and

 5   appearance for the record, Counsel.

 6                 MR. MONTS:     Good morning, Judge.     Britt

 7   Monts for the Wilsteins.

 8                 MR. LONG:     Morning, Judge.    Pat Long

 9   for defendants.

10                 THE COURT:     All righty.    Now, I saw

11   that I got my hand smacked, and apparently I did

12   something wrong -- ooh, it happens. -- and I

13   should've given you the 750 in the judgment.

14                 MR. MONTS:     Well, you were trying --

15   you were just being nice to the other side.

16                 THE COURT:     I was trying to be fair.

17                 MR. LONG:     I think she was making a

18   considered judgment.

19                 THE COURT:     I thought I made a

20   judgment, but sometimes the appellate court just

21   doesn't -- just doesn't agree with me.

22                 Hey, appellate court justices.

23                 It's all right.     It's all right.

24                 MR. MONTS:     Overall they did, and the

25   way it was tried, it didn't require any kind of

                       DONNA KING HAMMER, CSR
                       164TH OFFICIAL REPORTER
                           (713) 368-6256
                                                     4



 1   remand.    That's the great thing.     They didn't have to

 2   calculate the interest and -- not have to send it

 3   back to you for anything.     But, Your Honor, we're

 4   here this morning on two motions.       They're pretty

 5   focused.    One is really -- will be unnecessary, I

 6   think, should be unnecessary.     The first motion is a

 7   motion to increase the supersedeas deposit --

 8                   THE COURT:   Uh-huh.

 9                   MR. MONTS:   -- under Texas Rule of

10   Appellate Procedure 24.3.     That rule gives the Court

11   continuing -- the trial court continuing jurisdiction

12   to increase the amount of the security during the

13   appeal if circumstances change.

14                   THE COURT:   Uh-huh.

15                   MR. MONTS:   So there's no question that

16   you -- you maintain jurisdiction for that purpose

17   during the appeal.     So by way of quickly -- just

18   background, as you know, you signed a final judgment

19   on July 9th of 2013.     It went up on appeal to the

20   First Court, and on -- I believe it was June the 30th

21   of this year, they affirmed your judgment and

22   modified it in part and signed a new judgment, which

23   is Tab 1 --

24                   THE COURT:   Uh-huh.

25                   MR. MONTS:   -- in your notebook.     So

                      DONNA KING HAMMER, CSR
                      164TH OFFICIAL REPORTER
                          (713) 368-6256
                                                      5



 1   essentially your judgment is still the judgment.

 2   It's just been modified by the Court of Appeals and

 3   increased by about $1.2 million.        And so we have --

 4   behind Tab 1 here you have the modified judgment from

 5   the Court of Appeals.     So -- you can only have one

 6   judgment in a case at one time.

 7                    THE COURT:   Uh-huh.

 8                    MR. MONTS:   So the final judgment that

 9   you entered in July of 2013 has been modified by the

10   Court of Appeals through a new judgment, and that is

11   the -- that is the judgment in the case now.

12                    Now, the problem with that is -- and if

13   you'll look at -- Tab 4 kind of mathematically takes

14   us through it.     They put up the full amount of the

15   original supersedeas under the applicable law for

16   compensatory damages, and they put up two years of --

17   of interest on the judgment, but that was back --

18   effective as of July of 2013.      We're more than two

19   years past that.

20                    THE COURT:   Uh-huh.

21                    MR. MONTS:   And the judgment -- if you

22   look at that sheet in blue that I've got for you --

23                    THE COURT:   Uh-huh.

24                    MR. MONTS:   You total up the numbers,

25   the original supersedeas on the original judgment,

                       DONNA KING HAMMER, CSR
                       164TH OFFICIAL REPORTER
                           (713) 368-6256
                                                    6



 1   the additional amount the Court of Appeals modified

 2   and increased, and then I've added another year's

 3   judgment -- interest on the judgment because we're

 4   already several months past the two years they put

 5   up.   And they've already said they're going to take a

 6   petition up to the Supreme Court, so we know we're

 7   looking at --

 8                    THE COURT:   Somehow I'm not shocked.

 9                    MR. MONTS:   No one's surprised.

10   This -- this is one that just plays itself out, I

11   guess, but -- but I think we all know that we're

12   looking at probably another four to six months at

13   least --

14                    THE COURT:   Uh-huh.

15                    MR. MONTS:   -- in the Supreme Court

16   just to even deny a petition, the way things

17   typically work.     So when you add all that up, you see

18   that the total amount that -- that is required now to

19   fully supersede the judgment as it exists now,

20   your --

21                    THE COURT:   Uh-huh.

22                    MR. MONTS:   -- your judgment, as

23   modified -- and by the way, under -- under -- under

24   decisions in Texas, when they reinstated that part of

25   the verdict --

                       DONNA KING HAMMER, CSR
                       164TH OFFICIAL REPORTER
                           (713) 368-6256
                                                      7



 1                  THE COURT:    Uh-huh.

 2                  MR. MONTS:    -- and added interest to

 3   it -- you have to go back and add post-judgment

 4   interest as of the date of your original judgment.

 5   So they basically modified your judgment, and so

 6   their judgment is the -- is the judgment that was

 7   entered now, as of July 9th of 2013.

 8                  THE COURT:    Okay.     What is -- what is

 9   this argument about the mandate?

10                  MR. MONTS:    Well --

11                  THE COURT:    There's no mandate?

12                  MR. MONTS:    Yeah.     I mean, to me, the

13   mandate is something completely different.        Once the

14   mandate comes down from either the Supreme Court or

15   the Court of Appeals and is delivered to the clerk,

16   we're not talking about supersedeas anymore.         We're

17   talking about "Pay up or, you know, we're coming

18   after you."   So I don't fully understand the issue of

19   the mandate because they seem to be arguing that the

20   modified judgment is tentative and it's not, in fact,

21   the judgment of the Court.     But there can only -- you

22   can't have a -- you can't have a judgment and a

23   tentative judgment at the same time.        You can only

24   have one judgment in a case, and the Court of Appeals

25   has made clear that your judgment has been modified,

                     DONNA KING HAMMER, CSR
                     164TH OFFICIAL REPORTER
                         (713) 368-6256
                                                         8



 1   and that judgment is the judgment in the case.

 2                    So they have to supersede that judgment

 3   to stay enforcement with the numbers in that

 4   judgment.     And when you run through the numbers,

 5   they're about 450,000 short now.

 6                    THE COURT:    Okay.     Well --

 7                    MR. MONTS:    And we -- we ask that you

 8   require them, within -- you know, next ten days or

 9   so, to put that up.

10                    THE COURT:    You got a spare 450 you

11   want to chuck into the registry real fast?

12                    MR. LONG:    I would prefer not to do

13   that, Your Honor.

14                    THE COURT:    Uh-huh.     Somehow I knew

15   that.   What's the deal with the mandate?

16                    MR. LONG:    Well, the -- the rule is

17   very simple.     Until the mandate is issued, this Court

18   can't change the judgment, so the judgment that you

19   can enforce is the judgment that was entered before

20   the appeal.

21                    THE COURT:    Uh-huh.

22                    MR. LONG:    That's the law.      If you get

23   a mandate from the Court of Appeals saying we've

24   either increased or decreased it -- once you get that

25   mandate, then you have the ability -- you -- you keep

                       DONNA KING HAMMER, CSR
                       164TH OFFICIAL REPORTER
                           (713) 368-6256
                                                     9



 1   the ability to make that change, but the law is very

 2   clear.     Until the mandate is issued, which deals with

 3   enforceability --

 4                    THE COURT:    Uh-huh.

 5                    MR. LONG:    And that's the key issue.

 6   Until that mandate is issued, this Court can't just

 7   say, "Okay.     We've got a -- we've got an interim

 8   decision by the -- by the Court of Appeals," because

 9   we are going to take it up, "I'm going to increase,"

10   or, the other way around, "decrease it."

11                    And I've got counsel that's helped me

12   in this case, and I'm just going to hand this to the

13   Court because this isn't -- this is -- what I'm

14   telling the Court is, I think, pretty clearly the

15   law.     What I've got is -- I'll just hand the Court an

16   article that was in the Advanced Civil Appellate

17   Practice course by Professor Elaine Carlson.        You may

18   know her.

19                    THE COURT:    Uh-huh.

20                    MR. LONG:    She's probably considered

21   the preeminent expert in this area.

22                    THE COURT:    I used to work for her 145

23   years ago, as I like to say, so yes.

24                    MR. LONG:    I've highlighted in red --

25   and it goes on to the next page. -- the rule of law

                       DONNA KING HAMMER, CSR
                       164TH OFFICIAL REPORTER
                           (713) 368-6256
                                                        10



 1   that I'm -- I'm just citing to the Court.           What

 2   Professor Carlson is saying is absolutely consistent

 3   with what we've got in our response, and I think

 4   that's the law.

 5                   THE COURT:    Wow.   That's a new one on

 6   me.

 7                   MR. MONTS:    I -- I don't think

 8   that's -- I don't think that really means what it's

 9   being asserted to be because, as I said, the modified

10   judgment of the Court of Appeals is your judgment.

11                   Your judgment, the way it was signed

12   back in 2013, has been modified, and -- and it is

13   your judgment, plus the additional verdict and

14   interest that the Court of Appeals reinstated.             That

15   is -- that is the judgment in the case.           So I think

16   that you have to read it in light of:         What is the

17   judgment?   And once you do that, you then have to

18   supersede that judgment.      I think sometime --

19                   THE COURT:    Did you read the rest of

20   this, though?

21                   MR. LONG:    Yes, I did.

22                   THE COURT:    Not you.     Him.

23                   MR. LONG:    Oh.

24                   MR. MONTS:    I haven't -- I mean, I

25   really haven't had the benefit of seeing it for more

                       DONNA KING HAMMER, CSR
                       164TH OFFICIAL REPORTER
                           (713) 368-6256
                                                    11



 1   than just a few seconds before we got up here so

 2   I haven't -- can't comment too much on it.

 3                  THE COURT:   It kind of torpedoes your

 4   argument.

 5                  MR. MONTS:   Mine?

 6                  THE COURT:   Yep.

 7                  MR. MONTS:   Well, let me see what part

 8   it is because I -- I just --

 9                  THE COURT:   Start with the red, but

10   then read after the red.    I always read after.        Read

11   after --

12                  MR. MONTS:   In the footnote here?

13                  THE COURT:   No.     Not in the footnote.

14   On the next page.

15                  MR. MONTS:   Oh, next page.

16                  THE COURT:   Uh-huh.

17                  MR. MONTS:   Yeah.     The trial court

18   judgment.   But my point is the trial court judgment

19   at this point is your judgment, modified by the

20   Court.

21                  THE COURT:   Keep on reading, where it

22   says that doesn't apply until a mandate's issued; the

23   mandate won't be issued until ten days after the

24   expiration of the date to where they can complain to

25   the Supreme Court or ten days after when the Supreme

                     DONNA KING HAMMER, CSR
                     164TH OFFICIAL REPORTER
                         (713) 368-6256
                                                  12



 1   Court says, "No.    I'm not going to take it up."

 2                   MR. MONTS:   The problem -- there --

 3   there's an illogical -- there's a disconnect in that

 4   because they have to take a petition for review

 5   within 45 days --

 6                   THE COURT:   Uh-huh.

 7                   MR. MONTS:   -- of -- well, the

 8   rehearing was denied earlier this week, so they have

 9   45 days to do that.

10                   THE COURT:   Uh-huh.

11                   MR. MONTS:   If they don't do that on

12   time --

13                   THE COURT:   Uh-huh.

14                   MR. MONTS:   -- then obviously the

15   mandate will issue back to the clerk, and we're -- we

16   don't need to talk about supersedeas anymore at that

17   point; it's over; we're just talking about collecting

18   the money in the registry and then going after

19   assets --

20                   THE COURT:   Uh-huh.

21                   MR. MONTS:   -- unless they give us a

22   check.    So that's -- that's what the mandate causes.

23   There won't be a mandate sent back if they take up a

24   petition for review.

25                   THE COURT:   I knew you were going to --

                      DONNA KING HAMMER, CSR
                      164TH OFFICIAL REPORTER
                          (713) 368-6256
                                                      13



 1                 MR. MONTS:    But how are they going

 2   to -- what judgment are they going to appeal

 3   without -- if -- if their position is that the Court

 4   of Appeals' modified judgment is not effective, what

 5   judgment are they going to take up to the Supreme

 6   Court?

 7                 THE COURT:    I suspect the whole

 8   dad-gone thing, but -- okay.      Yes.

 9                 MR. MONTS:    But they -- but there can't

10   be two judgments.

11                 MR. LONG:    He's complaining --

12   effectiveness versus enforceability.         We're talking

13   about effectiveness with supersedeas.         It's not

14   enforceable by this Court until the mandate's issued.

15   It's just as simple as that.

16                 THE COURT:    Yeah.    Okay.     Denied.

17   Next?

18                 MR. MONTS:    Do we have an order?

19                 MR. LONG:    Yes.

20                 THE COURT:    All right.       Now you want a

21   deposition and production of documents?

22                 MR. MONTS:    Well, that --

23                 MR. LONG:    That's moot now.

24                 MR. MONTS:    I mean, if your position is

25   that the judgment doesn't need to be increased, the

                    DONNA KING HAMMER, CSR
                    164TH OFFICIAL REPORTER
                        (713) 368-6256
                                                     14



 1   supersedeas --

 2                    THE COURT:   Yeah.

 3                    MR. MONTS:   -- then we're not going to

 4   seek to enforce the judgment, if it's --

 5                    THE COURT:   That's my position.

 6                    MR. MONTS:   All right.    Thank you,

 7   Judge.

 8                    THE COURT:   Thanks.    Oh, here.   Take --

 9   take that back with you.      Bring it back next time.

10   See y'all in a couple weeks.

11                    (End of proceedings.)

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                       DONNA KING HAMMER, CSR
                       164TH OFFICIAL REPORTER
                           (713) 368-6256
                                                   15



 1   THE STATE OF TEXAS    )
                           )
 2   COUNTY OF HARRIS      )

 3

 4            I, Donna King Hammer, Official Court
     Reporter in and for the 164th Judicial District Court
 5   of Harris County, Texas, do hereby certify that the
     above and foregoing contains a true and correct
 6   transcription of all portions of evidence and other
     proceedings requested in writing by counsel for the
 7   parties to be included in this volume of the
     Reporter's Record in the above-styled and -numbered
 8   cause, all of which occurred in open court or in
     chambers and were reported by me.
 9

10            I further certify that this Reporter's
     Record of the proceedings truly and correctly
11   reflects the exhibits, if any, admitted by the
     respective parties.
12

13            I further certify that the total cost for
     the preparation of this Reporter's Record is
14   $_____________ and was paid/will be paid by
     ___________________.
15

16            WITNESS MY OFFICIAL HAND this, the 5th day
     of October, 2015.
17

18
                               Donna King Hammer
19                         _______________________________
                           DONNA KING HAMMER, CSR 6273
20                         Expiration Date: 12/31/16
                           Official Court Reporter
21                         164th Judicial District Court
                           Harris County, Texas
22                         201 Caroline, 12th Floor
                           Houston, Texas  77002
23                         (713) 368-6256

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                    DONNA KING HAMMER, CSR
                    164TH OFFICIAL REPORTER
                        (713) 368-6256
