                                                                                                ACCEPTED
                                                                                            01-13-00853-CV
                                                                                 FIRST COURT OF APPEALS
                                                                                         HOUSTON, TEXAS
                                                                                       10/6/2015 4:55:59 PM
                                                                                      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
                                                                   10/6/2015 4:55:59 PM
                                    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



                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:3596655.2
                              TABLE OF CONTENTS

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

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

III.    Conclusion And Prayer .....................................................................5




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                                TABLE OF AUTHORITIES
                                                                                                         Page(s)

CASES

Fairways Offshore Exploration, Inc. v. Patterson Services, Inc.,
   355 S.W.3d 296 (Tex. App.—Houston [1st Dist.] 2011,
   no pet.) .......................................................................................................4

In re Nalle Plastics Family Ltd. P’ship,
   406 S.W.3d 168 (Tex. 2013)......................................................................4

Jackson Walker, LLP v. Kinsel,
   No. 07-13-00130-CV, 2014 WL 720889 (Tex. App.—
   Amarillo Feb. 14, 2014, no pet.) .............................................................5

Whitmire v. Greenridge Place Apartments,
  333 S.W.3d 255 (Tex. App.—Houston [1st Dist.] 2010,
  pet. dism’d) ...............................................................................................3

STATUTES

Tex. Civ. Prac. & Rem. Code § 52.006 ........................................................3

OTHER AUTHORITIES

Tex. R. App. P. 24.4(b) ..................................................................................1

Tex. R. App. P. 24.4(d) ..................................................................................1

Texas Rule of Appellate Procedure 24.2(a)(1) ..................................... 1, 3




                                                       -ii-
HOU:3596655.2
                                 I.
                      INTRODUCTION AND SUMMARY

        This Court must review the amount of a deposit in lieu of
supersedeas bond “based both on conditions as they existed at the
time the trial court signed an order, and on changes in those
conditions afterward.” Tex. R. App. P. 24.4(b). Earlier this year, this
Court increased the trial court’s judgment to a new total of
$4,429,376.71. Conditions changed. More security is needed.
        The Wilsteins asked Dernick to increase its deposit, but it
refused, claiming (erroneously) this Court’s June 30, 2015 judgment is
tentative and ineffective and therefore need not be fully superseded
to stay execution until the mandate issues. The Wilsteins then filed a
motion asking the trial court to require Dernick to increase its
deposit, but the court refused, adopting Dernick’s facially erroneous
“mandate” argument.1
        The Wilsteins now ask this Court to apply the law correctly and
require Dernick to increase its deposit to comply with Texas Rule of
Appellate Procedure 24.2(a)(1). The Wilsteins’ motion “must be heard
at the earliest practicable time” because, in the meantime, the
Wilsteins are left unprotected. Tex. R. App. P. 24.4(d).




        1   See Exhibit A, a transcript of the September 25, 2015 hearing, at 13.


HOU:3596655.2
                                 II.
                      ARGUMENTS AND AUTHORITIES

        The trial court’s original judgment awarded a total of
$3,238,260.90.2 To suspend enforcement during its appeal, Dernick
filed a cash deposit of $583,427.08 in lieu of supersedeas bond, which
Dernick determined was the sum of compensatory damages,
prejudgment interest on those damages, two years of post-judgment
interest on the entire judgment, and costs awarded in the judgment.3
Dernick eventually agreed to deposit another $1 million for a total of
$1,583,427.98, and execution of the original judgment was stayed.
        Since then, however, this Court significantly increased the trial
court’s judgment. On June 30, 2015, the Court modified the trial
court’s judgment to award the Wilsteins an additional $750,000 of
compensatory damages, originally awarded by the jury but set aside
by the trial court, and interest on those compensatory damages.4 The
total amount of the judgment is now $4,429,376.71.5 That means




        2   See 3CR3523–28, attached hereto as Exhibit B.
        3   3CR3704–08, attached hereto as Exhibit C.
        4   2CR3166–78, attached hereto as Exhibit D, at 3177.

        See Exhibit E, a true and correct copy of this Court’s judgment; see also
        5

Exhibit B.


                                          -2-
HOU:3596655.2
Dernick’s deposit in lieu of supersedeas bond is no longer sufficient,
and the Wilsteins are left unprotected.6

        By rule, the total amount that must be superseded is now
$2,032,412.67, including the sum of compensatory damages,
prejudgment interest, post-judgment interest for the estimated

duration of the appeal, and costs:
                 $583,427.14, the superseded amount in the original
                  judgment,7

                 $750,000, the Bradshaw compensatory damage award,8
                 $365,924.26, prejudgment interest on the Bradshaw
                  award, as reflected in the Court’s judgment,9

                 $111,592.43, two years of post-judgment on the Bradshaw
                  award, and
                 $221,468.84, one year of post-judgment interest on the
                  entire judgment.
See Tex. R. App. P. 24.2(a)(1); Tex. Civ. Prac. & Rem. Code § 52.006.




        See Whitmire v. Greenridge Place Apartments, 333 S.W.3d 255, 262 (Tex.
        6

App.—Houston [1st Dist.] 2010, pet. dism’d) (noting that a bond “secure[s] the
appellee and abate[s] the remedies he would otherwise have for realizing his
judgment”).
        7   Exhibit C.
        8   Exhibit E.
        9   Exhibit E.


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HOU:3596655.2
        The trial court abused its discretion in suspending execution of
the Wilsteins’ judgment without a sufficient deposit. There is no

doubt that the $750,000 Bradshaw damage award is compensatory
and must be superseded. In re Nalle Plastics Family Ltd. P’ship, 406
S.W.3d 168, 171–72 (Tex. 2013). But the court did not even include

that.
        Additionally, omission of adequate interest is an abuse of
discretion. Fairways Offshore Exploration, Inc. v. Patterson Services, Inc.,

355 S.W.3d 296, 304 (Tex. App.—Houston [1st Dist.] 2011, no pet.)
(“We conclude that a supersedeas bond that does not include in its
sum the amount of prejudgment interest is ‘patently ineffective’ to

secure a money judgment awarding such interest.”). Dernick’s
original deposit included only two years of estimated post-judgment
interest. But the original judgment was signed on July 9, 2013, more
than two years ago, and Dernick has indicated that it will file a
petition for review with the Texas Supreme Court later this year.
Assuming the petition is denied after it is filed—the quickest possible
resolution—that process will likely take another four to six months at
least, extending the appellate process another year beyond the two
years of post-judgment interest currently posted by Dernick.
        As such, additional post-judgment interest must be added: one
additional year on the amount originally superseded, and three years
on the new $750,000 Bradshaw award, which is effective as of the

                                    -4-
HOU:3596655.2
date of the original judgment (July 9, 2013). Jackson Walker, LLP v.
Kinsel, No. 07-13-00130-CV, 2014 WL 720889, at *1 (Tex. App.—

Amarillo Feb. 14, 2014, no pet.) (holding that setting the amount of a
supersedeas bond that does not include adequate post-judgment
interest is an abuse of discretion).

        The current deposit is only $1,583,427.08. Therefore, the deposit
is deficient by $448,985.59,10 and the Wilsteins are left unprotected.

                               III.
                      CONCLUSION AND PRAYER

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




         This is the result of subtracting Dernick’s current deposit, $1,583,427.08,
        10

from the amount that must be superseded, $2,032,412.67.


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                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




                 -6-
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                                  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




                CERTIFICATE OF CONFERENCE

      The undersigned conferred with counsel for Appellant and
Cross-Appellee Dernick Resources, Inc. on October 6, 2015. Counsel
for Dernick Resources, Inc. does not agree to the relief requested in
this Motion.

                               /s/Kendall M. Gray
                               Kendall M. Gray




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                      CERTIFICATE OF SERVICE

      I hereby certify that on October 6, 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




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