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Stephens v. Three Finger Black Shale Partnership

Court of Appeals of Texas, Eleventh District

March 23, 2017

KERWIN STEPHENS; THUNDERBIRD OIL & GAS, LLC;THUNDERBIRD RESOURCES, LLC; THUNDERBIRD LANDSERVICES, LLC; STEPHENS & MYERS, LLP; AND CHESTERCARROLL, Appellants
v.
THREE FINGER BLACK SHALE PARTNERSHIP; TREKRESOURCES, INC.; TIBURON LAND & CATTLE, L.P.; L.W.HUNT RESOURCES, LLC; AND RICHARD RAUGHTON, Appellees and L.W. HUNT RESOURCES, LLC AND RICHARD RAUGHTON, INDIVIDUALLY AND AS SUCCESSOR IN INTEREST OFARAPAHO ENERGY, LLC, Cross-Appellants
v.
KERWIN STEPHENS; THUNDERBIRD OIL & GAS, LLC; THUNDERBIRD RESOURCES, LLC; THUNDERBIRD LAND SERVICES, LLC; STEPHENS & MYERS, LLP; AND CHESTER CARROLL, Cross-Appellees

         On Appeal from the 32nd District Court Fisher County, Texas Trial Court Cause No. DC-2013-0016

          Panel consists of: Wright, C.J., Willson, J., and Bailey, J.

          ORDER

          PER CURIAM

         Kerwin Stephens and Thunderbird Resources, LLC have filed in this court a second motion to review under Rule 24.4 of the Texas Rules of Appellate Procedure. On October 27, 2016, this court previously denied movants' first motion for review under Rule 24.4, in which movants sought to post real property as alternate security. Movants now assert that they have obtained written commitments to post a bond or cash deposit-conditioned on the release or subordination of judgment-related liens that have been filed by the plaintiffs and intervenors in the case below-and that the trial court abused its discretion when it refused to lift the judgment-related liens that prevent movants from posting a bond or selling land for a cash deposit. We agree.

         "A judgment debtor is entitled to supersede the judgment while pursuing an appeal." Miga v. Jensen, 299 S.W.3d 98, 100 (Tex. 2009). This may be accomplished by means that include "filing with the trial court clerk a good and sufficient bond" or "making a deposit with the trial court clerk in lieu of a bond." Tex.R.App.P. 24.1(2), (3). The Texas Supreme Court has determined that the current rules and statutory provisions related to supersedeas are "protective of debtors, consistent with deep, populist Texas traditions" and that they "respect[] the importance of the right to a meaningful appeal." In re Longview Energy Co., 464 S.W.3d 353, 359 (Tex. 2015).

          At issue here are the competing rights of the movants to supersede the judgment and of the judgment creditors to enforce a judgment that has not been superseded.[1] The judgment-related liens have prevented movants from posting a supersedeas bond. On December 12, 2016, movants obtained a letter from the president and chief executive officer of BancCentral National Association that confirmed the bank's intent to provide a $6.3 million irrevocable letter of credit (ILOC) to Stephens to be secured with real property and farm equipment. The letter reads in part:

Our bank intends to provide the ILOC as soon as you receive approval from the court in Fisher County, Texas to post a supersedeas bond using the ILOC as collateral for the surety bond, and as soon as you obtain releases of any liens on the land collateral and equipment, including those associated with the abstracts of judgment in Cause No. DC-2013-00016. Those releases may be placed in escrow pending the issuance of this ILOC. It will take approximately 14 business days following the court approval and lien release for our bank to provide the ILOC documentation, security instruments, note, and other related paperwork for the closing and issuance of the ILOC.

         We note that, alternative to the posting of a bond by means of the ILOC, movants also have a tentative agreement to sell the real property at issue so that a cash deposit in lieu of bond may be used to supersede the judgment. The record indicates that the real property upon which the judgment creditors have obtained judgment liens and have begun execution is the only means available to the movants to supersede the judgment.

         Pursuant to the law set forth above and based upon the evidence presented, we believe that the trial court abused its discretion when it refused to enter an order to subordinate the judgment liens or release the abstracts of judgment as necessary to permit the movants to supersede the judgment while, at the same time, protecting the judgment creditors. However, we adhere to our previous ruling that the trial court did not abuse its discretion when it refused to suspend the judgment based upon alternate security. See Tex. R. App. P. 24.1(a)(4). We note that Rule 24.1(f) appears to apply to the situation in this case. That rule provides that, if enforcement of a judgment has begun before the judgment is superseded, such enforcement "must cease when the judgment is superseded" and that, if "execution has been issued, the clerk will promptly issue a writ of supersedeas." Tex.R.App.P. 24.1(f).

         We grant in part movants' Rule 24.4 motion, and we remand the cause to the trial court so that it may conduct proceedings consistent with this order and pursuant to Rule 24.3 of the Texas Rules of Appellate Procedure. The temporary stay issued by this court on December 30, 2016, remains in effect until thirty days after the trial court has issued an order with respect to such proceedings.

---------

Notes:

[1]We note that the amount of the bond or cash deposit is not at issue here. See Tex. R. App. ...


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