“James Holmes testifies before the Texas Legislature in favor of His Hoped-for Supersedeas Reforms in House Bill 4381, 88th Texas Legislative Session.”
James Holmes is a leading voice for “supersedeas reforms” to Texas law. Many of his ideas for such reforms appear in his celebrated and widely-read law-review article Superseding Money Judgments in Texas: Four Proposed Reforms to Help the Business Litigant and to Further Improve the Texas Civil Justice System, 51 St. Mary’s L.J. 69 (2020), as well as his Emerging Topic on “new approach to business litigation” and on “supersedeas reform” on Holmes PLLC’s website.
Texas lawmakers are taking notice of Holmes’s views on supersedeas laws. To lessen the burdens on businesses needing to appeal money judgments in Texas courts, the Texas Legislature has passed House Bill 4381, which now goes to the Governor for signature. H.B. 4381 grew directly from Holmes’s 2020 law-review article and professional experience.
H.B. 4381 will create the new Section 52.007 in the Texas Civil Practice and Remedies Code – potentially allowing business defendants to provide secured interests in real or personal property in lieu of more-expensive and oftentimes-prohibitive cash deposits or supersedeas bonds. Moreover, the new Section 52.007 will allow business defendants to obtain a lessening of their supersedeas burden when an intermediate appellate court has lowered a money judgment, yet the parties continue making appeals to a higher court. Both (1) the secured interests in lieu of cash/bond and (2) the lowered supersedeas burden at an appeal’s half-way point will provide millions of dollars in litigation-cost savings to Texas businesses and businesspeople over many coming years.
The Texas business community – especially companies or persons possessing substantial business assets, but relatively small amounts of cash at any given time – should heartily thank James Holmes for his years-long work towards supersedeas reforms and for his push for H.B. 4381.
Below is a copy of Holmes’s testimony to the Legislature strongly in favor of H.B. 4381.
“I greatly appreciate this Committee’s attention on an obscure and difficult procedural-law topic – which all to often becomes vitally important to litigants in our civil justice system. I refer to “supersedeas laws” – the procedures whereby we prevent executions of money judgments during the appeals through Texas appellate courts. The “judgment debtor” (who lost in the trial court) will need to appeal and will need to halt judgment collections by the “judgment creditor,” who won in the trial court and who will attempt to collect cash or property during that very appeal.
A meaningful appeal becomes a legal nullity or, more commonly, a spawning ground for further litigation – called “satellite litigation” (because it doesn’t address the original reason for the lawsuit) – if the judgment debtor cannot easily halt judgment collections. To speak informally, what is the point of the appeal if the judgment debtor has the whole farm sold out from under him – during the very appeal on whether he owes any money at all?
Texas supersedeas laws consist of a Rule of Appellate Procedure (namely, TRAP 24), Chapter 52 of the Civil Practice and Remedies Code, and a growing and dense body of case law construing that procedural rule and that statute.
Texas supersedeas laws are complex and will become more complex in the future. I suspect that this Committee will be considering further refinements of these laws in future sessions, as the State grows and as needs arise. But here and now, we can address two pressing problems: (1) enabling a judgment debtor to “post alternate security” instead of the more cumbersome and expensive “cash deposit” or “supersedeas bond,” and (2) enabling the judgment debtor to reduce the amount of security posted when an intermediate appellate court reduces the debtor’s liability at the half-way point, while the parties then pursue further appeals to the Texas Supreme Court.
Representative Mano DeAyala has authored a wonderful new statute in House Bill 4381. This new law would work in conjunction with Chapter 52 (CPRC), TRAP 24, and existing case law. In fact, H.B. 4381 merely supplements this existing body of law – it does not contravene or “overrule” any of it.
H.B. 4381, first, would allow smaller defendants (smaller judgment debtors) to post “alternate security” – such as deeds of trust to real estate, or security agreements in personal property (including ownership in privately-held companies) – upon a showing that these smaller defendants would be forced “to substantially liquidate the judgment debtor’s interests in real or personal property necessary to the normal course of the judgment debtor’s business.” Currently, there is no standard – no underlying test – whereby trial or appellate courts can decide if and when a judgment debtor can post alternate security.
H.B. 4381, next, would allow smaller defendants to lower the required security at the “half-way point” of the appeal, if an appellate court has reduced their liability and yet the parties continuing appealing to the Texas Supreme Court. Currently, there is no standard – no underlying test – whereby trial or appellate courts can decide if and when a judgment debtor is entitled to a reduction in required security at the half-way point of an appeal.
Both improvements to supersedeas laws in H.B. 4381 help both judgment debtors and judgment creditors. Both improvements greatly preserve the judgment debtor’s assets and wealth – by preventing a dissipation of the same with “fire sales of assets” or “supersedeas-bond transactional costs” – so that judgment debtors can have a meaningful appeal. Further, Both improvements greatly preserve the judgment debtor’s assets and wealth so that judgment creditors have more to collect in the event they hold on to their trial-court victory, after the appeal.
“James Holmes testifies before the Texas Legislature in favor of the Business Court, House Bill 19, 88th Texas Legislative Session”
Texas badly needs trial courts that are specialized for complex, large business cases. James Holmes has advocated for this new court system for several years. Recognizing that Holmes has experience and knowledge for introducing such specialized courts to the Texas system, legislators in the 88th Session and advocates for these specialized courts – to be named the “Business Court” under House Bill 19 – asked Holmes to testify before the Judiciary & Civil Jurisprudence Committee of the Texas House of Representatives on March 22, 2023. Below is a copy of Holmes’s testimony to the Legislature strongly in favor of House Bill 19.
“I have lived in Texas my entire life, rarely spending time away from my State. I graduated from the University of Texas School of Law and then worked for the Texas Supreme Court as a Briefing Attorney. I practice commercial law, including a large amount of trial and appellate work. I frequently serve as my clients’ sole trial and appellate counsel. It’s “one-stop shopping” when clients come to my firm.
Before going further, I must add that I have voted for and have raised money for judicial candidates in both parties, and I will continue to do so.
My 30-year legal career convinces me that Texas needs the Business Court because too often in commercial litigation – actually, in the vast majority of commercial cases – a simple “contract dispute” over a relatively small sum becomes the false basis for “extra-contractual theories and claims” carrying punitive damages, thereby resulting in a protracted legal dispute over tens of millions of dollars. After usually six to 10 years of costly trial and appellate litigation, most of the extra-contractual theories and claims fail under legal analysis and are therefore dismissed: but at what a tremendous cost and delay.
This very pattern caused the following cases to become more protracted and expensive – for the litigants, and for state resources – than each case ever should have been:
Energy Transfer Partners, L.P. v. Enter. Prods. Partners, L.P., 593 S.W.3d 732 (Tex. 2020).
Stephens v. Three Finger Black Shale Partnership, 580 S.W.3d 687 (Tex. App. – Eastland 2019, pet. denied).
Allen v. Devon Energy Holdings, L.L.C., 367 S.W.3d 355 (Tex. App.—Houston [1st Dist.] 2012, judgm’t set aside by agr.).
With several different jurisdictional grants, House Bill 19 in the 88th Session would place cases like these in the Business Court – for the benefit of litigants, state resources, and business communities within Texas.
I should further state that these sorts of cases are the most hard-fought and contentious cases I have ever experienced. All parties walk away from them embittered, with lasting hard feelings. One side is literally digging out of the other side’s bank account dollars for compensation – but this involves taking from that bank account hard-earned money or a life’s savings. There is no insurance policy behind this sort of litigation, in most cases. Usually, each side is what we call “self-insured” – in other words, each side is expending its own money to prosecute or defend the case, and its own money to settle the case or, more commonly, to continue fighting it.
I ask your Committee the take stock of the human cost in these sorts of cases – which never ceases to surprise me with how hard-fought they can be. Business Courts will shorten these cases, causing them to last just a few months or years – rather than a full decade. Business Courts will give the parties greater certainty of the ultimate outcome, thereby facilitating early resolutions to these wasteful cases.
“Fastest Jury Deliberation in the West”
James Holmes and Andrea Seldowitz of Holmes PLLC successfully obtained a unanimous verdict for their client, a contract claimant, during a jury trial in Dallas County, Texas, lasting January 9-11, 2023. The firm’s client, Snively Royalty Analysis, provided accounting review services to a DFW businessman, Richard Panchasarp. The parties disputed the amount of fee owed to Snively.
Holmes and Seldowitz put on a straightforward case: Snively provided accounting services, the parties’ contract entitled Snively to its fee, and Panchasarp failed to pay the full fee. After three days, the jury deliberated for under 15 minutes before returning a unanimous verdict that Panchasarp must pay Snively $563,564.70. The Court has rendered a judgment on the verdict, awarding Snively $563,564.70 in contract damages; $380,287.20 in prejudgment interest (and counting); and $325,000.00 in attorney’s fees (and counting).
About the case, Holmes said, “Andrea and I are proud to represent our client, businesswoman Victoria Snively. We put on a straightforward breach-of-contract case – with no complexity or side shows. The jury understood the case and readily awarded Victoria the money owed to her company. After trial, jurors thanked us for putting on a simple, efficient case that was respectful of their time. Normally, when jury’s come back fast, it means the defendant has won. But here, the plaintiff Snively Royalty Analysis won and I couldn’t be happier about that!”
Holmes as a “Super Lawyer”
For every year since Texas Monthly began its annual survey of the “Texas Super Lawyers,” James Holmes has achieved the ranking of Super Lawyer. To formulate its Super Lawyers list, Texas Monthly asks tens of thousands of practicing attorneys to select the best lawyers in Texas for various practice areas. Very few attorneys make the list, and even fewer make the list year after year. James has achieved a Super Lawyers ranking unmatched by most. James’s trial and appellate experiences are substantial and well surpass the norm in number, complexity and profile.
CLE Speaking Engagements
In October 2017, for the Petroleum Engineers’ Club of Dallas, James Holmes spoke on “Marketing Primer and Pointers” for upstream oil and gas transactions. Marketing insights from this popular speech have been widely disseminated by oil and gas professionals and have resulted in common quotations on the present-day oil and gas marketing environment.
In October 2018, James presented his speech and paper on “Post-Production Deductions in Gas Royalties” to the NARO National Convention in Denver. In July 2017, James presented his speech and paper on “Post-Production Deductions in Gas Royalties” to the NARO Texas Convention in Austin. In February 2016, James presented his speech and paper on “Managing Outside Counsel in Litigation” to oil and gas and insurance executives and in-house counsel in Houston. In September 2015, James gave a one-day seminar to oil and gas industry professionals in Houston on upstream accounting and royalty administration. In October 2013, James spoke in Austin on engagement letters and applicable ethics rules for the continuing legal education program of the University of Texas School of Law. In October 2011, James spoke at the NARO annual convention in Long Beach, California on upstream oil and gas pricing and related royalty-payment standards. For over 25 years, James has regularly presented papers and has given numerous legal-education speeches for U.T. Law, the State Bar of Texas, the University of Houston Law Center, the National Association of Royalty Owners, and Electric Utility Consultants, Inc. He is a sought-after and frequent continuing education speaker. He knows that by teaching a subject to others he continuously improves his own legal and business skills for the firm’s clients. Click here for a sampling of his speeches and publications.
Holmes’s Crude-Oil Marketing Company Is in Its 11th Year
Whether as an attorney or businessman, James Holmes strives to obtain competitive oil and gas pricing and measurement for his clients and industry colleagues. To that end, he formed the oil and gas marketing company Robur LLC, which has enjoyed expansive growth over the past decade and currently markets over $60 million annually for its diverse client base. James intends to grow Robur LLC to help a broad variety of royalty owners, working-interest owners and producers in their marketing of oil and gas production.
Holmes as Certified Investment Adviser
In 2010 the Texas State Securities Board issued a Certificate of Registration for James Holmes as an Investment Adviser. The Investment Adviser status has enabled Mr. Holmes on a fee basis to consult with colleagues, family members, and investment partnerships, such as Reg D funds (e.g., 17 C.F.R. § 230.506), regarding their investment selections and strategies. Further, Mr. Holmes formed Robur Capital, L.P., a value-investing style investment partnership in order to manage certain capital needs for Robur LLC.
Work for Law Day and DISD School Children
James Holmes served as the Dallas Bar Association’s chair or co-chair for the Law Day Committee for most of the 2000s and early 2010s. The American Bar Association sponsors Law Day through regional Bar Associations, like the Dallas Bar Association. Law Day provides opportunities for public-school students to learn about our government and its legal system. Law Day typically educates these students by focusing their attention on an important constitutional aspect of our government.
Holmes Pushes for Supersedeas Reforms in Texas Law
To benefit the Texas business community, James Holmes pushes to reform Texas’s “supersedeas laws” — the rules for how a business prevents judgment execution while pursuing an appeal.
Whether by legislation in a Texas legislative session, or by gradual case-law development, James continuously seeks to improve the civil justice system for Texas businesses and business owners. To that end, he has focused his efforts in recent years on reforming Texas’s “supersedeas laws” — the laws in play when a business or business person needs to prevent judgment execution while pursuing an appeal. In February 2020, Holmes published “Superseding Money Judgments in Texas: Four Proposed Reforms to Help the Business Litigant,” 51 ST. MARY’S L.J. 69 (2020). He is actively informing Texas businesspeople and lawmakers of the importance of this initiative.