MRC Permian Company/Holland Acquisitions, Inc., D/B/A Holland Services v. Holland Acquisitions, Inc., D/B/A Holland Services/MRC Permian Company

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
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MRC PERMIAN COMPANY,
§
Appellant/Cross Appellee,
§
v.
§
POINT ENERGY PARTNERS PERMIAN No. 08-19-00124-CV
LLC; TJ BAR, LLC; TUBB MEMORIAL, §
AN OREGON LIMITED Appeal from the
PARTNERSHIP; PLAINSCAPITAL §
BANK, TRUSTEE FOR THE DEBORAH 143rd District Court
JACKSON REVOCABLE TRUST; §
BANK OF AMERICA, N.A., TRUSTEE of Loving County, Texas
FOR THE JANELLE JACKSON §
MARITAL TRUST PART M2, JANELLE (TC# 17-06-869)
JACKSON MARITAL TRUST PART §
M1, AND FAMILY CREDIT SHELTER
TRUST PART B; VORTUS §
INVESTMENT ADVISORS, LLC; JOHN
SABIA; and BRYAN MOODY, §
Appellees/Cross-Appellants. §
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--- AND ---
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MRC PERMIAN COMPANY,
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Appellant/Cross Appellee, No. 08-21-00065-CV
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v. Appeal from the
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HOLLAND ACQUISITIONS, INC., 143rd District Court
D/B/A HOLLAND SERVICES; §
of Loving County, Texas
Appellee/Cross-Appellant. §
(TC# 17-06-869)
§
ORDER
On March 15, 2021, this Court issued a majority opinion and judgment, along with an
opinion concurring in part and dissenting in part, in Cause No. 08-19-00124-CV. Three days later,
on March 18, 2021, Appellee/Cross-Appellant Holland Acquisitions, Inc. (Holland), gave notice
in that cause under Texas Rule of Appellate Procedure 8.1 that it had filed for Chapter 7 bankruptcy
in the United States Bankruptcy Court, District of Delaware, Cause Number 21-10374-JTD, on
February 4, 2021. See TEX.R.APP.P. 8.1 (provision permitting a party’s filing of a notice of
bankruptcy and setting forth the notice requirements).
Withdrawal of Opinions and Judgment
Federal law provides that once a petition in bankruptcy is filed, it operates as an automatic
stay against the commencement or continuation of any judicial, administrative, or other
proceedings against the debtor. 11 U.S.C. § 362(a). Any actions taken in violation of the automatic
stay, including judgments or other court actions, are voided. Kalb v. Feuerstein, 308 U.S.433, 440
(1940). Because an appeal is a continuation of judicial action, it is automatically stayed if it is
“against the debtor.” 11 U.S.C. § 362(a). Generally, if the debtor was the plaintiff in the court
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below, the stay does not apply; if the debtor was the defendant, or one of several defendants, as
was the case here, any further action in the cause is automatically stayed. Marcus, Stowell & Beye
Gov’t Sec., Inc. v. Jefferson Inv. Corp., 797 F.2d 227, 230 n.4 (5th Cir. 1986). Further, the Texas
Rules of Appellate Procedure state:
A bankruptcy suspends the appeal and all periods in these rules from the date
when the bankruptcy petition is filed until the appellate court reinstates or
severs the appeal in accordance with federal law.
TEX. R. APP. P. 8.2.
By virtue of the above-mentioned rules, this case was stayed as of February 4, 2021, even
though we were not aware of the bankruptcy filing until March 18, 2021. In that short interim, we
unknowingly issued a majority opinion and a concurring and dissenting opinion, and a judgment,
in Cause No. 08-19-00124-CV. Having now received notice of Holland’s bankruptcy, we
withdraw said opinions and judgment of March 15, 2021. This order does not preclude reissuance
of the same or substantially the same opinions and judgment in this cause—or in an appeal severed
as to Holland once the bankruptcy stay is lifted. Howell v. Thompson, 839 S.W.2d 92, 92 (Tex.
1992).
Severance and Reinstatement
Texas Rule of Appellate Procedure 8.3 provides that a “party may move to sever the appeal
with respect to the bankrupt party and to reinstate the appeal with respect to the other parties.” See
TEX.R.APP.P. 8.3(b). Accordingly, on April 14, 2021, Point Energy Partners Permian LLC (Point
Energy), Appellee/Cross-Appellant of Cause No. 08-19-00124-CV, filed an Unopposed Motion to
Sever Appellee Holland, and the motion contained a certificate of conference indicating that
counsel for all other parties were not opposed to the severance. Rule 8.3 requires that such motion
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“show that the case is severable and must comply with applicable federal law regarding severance
of a bankrupt party.” Id. We agree that, because the other parties to the appeal in that cause did not
file for bankruptcy, the automatic stay due to Holland’s bankruptcy does not apply to any of those
parties. See In re Southwestern Bell Tel. Co., 35 S.W.3d 602, 604 (Tex. 2000) (“When a defendant
files a bankruptcy petition, an automatic stay goes into effect and abates any judicial proceeding
against that party. However, the stay only operates against the debtor, and does not operate against
non-debtors or even co-debtors, co-tortfeasers, or co-defendants.”). Moreover, the non-bankrupt
parties cannot benefit from the stay afforded to Holland. See Lisanti v. Dixon, 147 S.W.3d 638,
642 (Tex. App.—Dallas 2004, pet. denied).
Accordingly, we grant Point Energy’s motion to sever the appeal of Cause No. 08-19-
00124-CV with respect to Holland. See TEX.R.APP.P. 8.3(b). The Clerk shall create Cause No. 08-
21-00065-CV, styled MRC Permian Company v. Holland Acquisitions Inc., d/b/a Holland
Services, and shall note in the severed cause that the Clerk’s and Reporter’s Records in Cause No.
08-19-00124-CV shall serve as the Clerk’s and Reporter’s Records in the severed cause. The
severed appeal will remain removed from our active docket and the parties shall promptly inform
this Court of the resolution of Holland’s bankruptcy proceeding or any other event authorizing
reinstatement of that appeal. See TEX. R. APP. P. 8.3(a).
Further, Cause No. 08-19-00124-CV is reinstated pursuant to TEX. R. APP. P. 8.3(b). The
Clerk of this Court is ordered to re-style Cause No. 08-19-00124-CV as MRC Permian Company
v. Point Energy Partners Permian LLC; TJ Bar, LLC; Tubb Memorial, an Oregon Limited
Partnership; PlainsCapital Bank, trustee for the Deborah Jackson Revocable Trust; Bank of
America, N.A., trustee for the Janelle Jackson Marital Trust Part M2, Janelle Jackson Marital
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Trust Part M1, and Family Credit Shelter Trust Part B; Vortus Investment Advisors, LLC; John
Sabia; and Bryan Moody.
Aside from our opinions and judgment, which are withdrawn, any paper filed in Cause No.
08-19-00124-CV while the proceeding was suspended will be deemed filed on this day—but after
this severance and reinstatement—and will not be considered ineffective because it was filed while
the proceeding was suspended. See TEX. R. APP. P. 8.2. Having been reinstated, the appeal in Cause
No. 08-19-00124-CV shall proceed in due course.
IT IS SO ORDERED THIS 28TH DAY OF APRIL, 2021.
GINA M. PALAFOX, Justice
Before Rodriguez, C.J., Palafox, and Alley, JJ.
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