Opinion
No. 06-17-00108-CV
12-18-2017
IN THE MATTER OF THE MARRIAGE PEGGY J. MIZE AND LESTER D. MIZE
On Appeal from the 62nd District Court Franklin County, Texas
Trial Court No. 11891 Before Morriss, C.J., Moseley and Carter, JJ. ORDER
Lester D. Mize has filed an emergency motion requesting that our Court review the supersedeas bond in connection with his appeal of the trial court's final decree of divorce. See TEX. R. APP. P. 24.4. Lester claimed that the trial court's order set an excessive bond amount of $1,045,430.38 necessary for Lester to avoid enforcement of the judgment during the pendency of the appeal. Although Peggy J. Mize filed a response to Lester's motion, we nevertheless abated the appeal and remanded the case to the trial court to conduct an evidentiary hearing on the issue of whether the supersedeas bond entered in this case is excessive and should be reduced, or whether the bond order issued by the trial court is proper. See TEX. R. APP. P. 24.2, 24.4(d); see also TEX. CIV. PRAC. & REM. CODE ANN. § 52.006 (West 2015).
The trial court conducted an evidentiary hearing, issued findings of fact and conclusions of law, and entered a new order which requires Lester to post a cash deposit or a supersedeas bond in the amount of $1,266,488.20, "which is the total amount awarded to [Peggy] in the Decree, plus two years post judgment interest and costs." We review the supersedeas bond amount to determine if it is excessive.
A judgment debtor may supersede the execution of a judgment by filing sufficient security. See TEX. R. APP. P. 24.2; TEX. CIV. PRAC. & REM. CODE ANN. § 52.006. We may review the trial court's determination of the security required to supersede a judgment while it is on appeal pursuant to Rule 24.4 of the Texas Rules of Appellate Procedure. See TEX. R. APP. P. 24.4. Among other things, Rule 24.4 permits a review of the sufficiency or excessiveness of the amount of security. On Lester's motion, we undertake such a review here. See TEX. R. APP. P. 24.4(a).
We employ an abuse-of-discretion standard in our review of such rulings pursuant to Rule 24.4 of the Texas Rules of Appellate Procedure. See EnviroPower, L.L.C. v. Bear, Stearns & Co., 265 S.W.3d 1, 2 (Tex. App.—Houston [1st Dist.] 2008, pet. denied); Ramco Oil & Gas Ltd. v. Anglo Dutch (Tenge) L.L.C., 171 S.W.3d 905, 909 (Tex. App.—Houston [14th Dist.] 2005, order); TransAmerican Natural Gas Corp. v. Finkelstein, 905 S.W.2d 412, 414 (Tex. App.—San Antonio 1995, writ dism'd). An abuse of discretion occurs when a ruling is "arbitrary and unreasonable," "lacking support in the facts or circumstances of the case" or when it is "without reference to guiding rules or principles." Samlowski v. Wooten, 332 S.W.3d 404, 410 (Tex. 2011) (citing Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997); Mercedes-Benz Credit Corp. v. Rhyne, 925 S.W.2d 664, 666 (Tex. 1996)).
The evidence reflected that Peggy had been awarded various vehicles, farm equipment, and tools in the final decree of divorce. There was evidence to support the value of these items, individually and collectively. That evidence was not contested. The total value of personal property awarded to Peggy was $51,874.00. This amount was included in the total amount of the cash deposit or bond required by the trial court to supersede the judgment. Lester contends that the value of the personalty awarded to Peggy was not properly included in the bond amount because the personalty was in Peggy's possession and was, therefore, not at risk. We disagree with Lester's analysis. When a judgment awarding the right to recover personalty is suspended, the bond cannot be less than the value of the personal property interest as of the date of the judgment. See TEX. R. APP. P. 24.2(a)(2)(A); Devine v. Devine, No. 07-15-00126-CV, 2015 WL 5228254, at *3 (Tex. App.—Amarillo Sept. 2, 2015, order). Lester cites no authority in support of his claim that, because the personal property awarded to Peggy is in her possession, its value should not be included in the supersedeas bond amount, and we find no such authority. We therefore conclude that the value of the personal property awarded to Peggy was properly included in the amount of the supersedeas bond set by the trial court.
The evidence further established that Peggy was awarded funds in certain bank accounts in the final decree of divorce, totaling $390,355.06. The amount of the funds in the accounts was not disputed. Lester argued, however, that, because funds in certain of the accounts awarded to Peggy had been transferred into her name after the divorce, those funds were not at risk and should not have been included in the bond amount. To the contrary, both the rule and the statute specifically provide that, when a judgment awarding the right to recover money is suspended, the bond must equal the sum of the compensatory damages awarded in the judgment, interest for the estimated duration of the appeal, and costs awarded in the judgment. See TEX. R. APP. P. 24.2(a)(1); TEX. CIV. PRAC. & REM. CODE ANN. § 52.006(a); see also White v. Pottorff, No. 05-14-00675-CV, 2015 WL 302810, at *4 (Tex. App.—Dallas Jan. 23, 2015, no pet.) (mem. op.).
As mentioned above as to the personal property, Lester provides no authority for the proposition that, because Peggy is currently in possession of funds awarded to her in the final decree, those amounts should not be included in the supersedeas bond amount, and we find no such authority. We conclude that the value of the funds awarded to Peggy in the final decree—$390,355.06—was properly included in the amount of the supersedeas bond.
Peggy was also awarded annuities totaling $111,182.18, life insurance policies valued at $92,019.14, and Mize Cypress Springs Realty LLDC, valued at $221,000.00. Lester does not contest these values and does not claim that these values were improperly included in the supersedeas bond calculation.
Finally, Peggy was awarded a house and 14.5 acres of land in Mt. Vernon. The house and land together were valued at $400,000.00, and that value was undisputed. The trial court included the entire value of the real property in the amount of the supersedeas bond. Lester contends that this value should not have been so included because the property was in Peggy's possession and was therefore not at risk. Although Lester's reasoning is incorrect, we agree with him that the entire value of the real property should not have been included in the amount of the supersedeas bond. When a judgment awarding the right to recover real property is suspended, the bond must be at least the value of the property interest's rent or revenue. See TEX. R. APP. P. 24.2(a)(2)(A); Wickliffe v. Tooley, No. 05-15-00696-CV, 2015 WL 5013691, at *1 (Tex. App.—Dallas Aug. 25, 2015, no pet.) (mem. op.). Presumably that is intended to cover the expected pendency of the appeal. See Wickliffe, 2015 WL 5013691, at *2 (twelve months' rent approved on appeal).
At issue in Wickliffe was the amount of a supersedeas bond to be set after entry of a default judgment setting aside a deed allegedly transferring property from the decedent to Wickliffe. The trial court set the supersedeas bond at $75,000.00, and Wickliffe claimed that amount was excessive. Id. at *1. Applying an abuse of discretion standard, the appellate court agreed. There was testimony at the bond hearing that the rental value of the property was $350.00 to $500.00 per month. Id. There was additional testimony that the land was worth between $55,000.00 and $60,000.00 and the house was worth approximately $5,000.00 to $6,000.00. Id. A realtor testified that the total estimated value of the property was $150,000.00. Id. Relying on the valuation of the property, the trial court set the bond at $75,000.00. Id. In concluding that the bond amount was excessive, the appellate court reasoned that, "[b]ased on rule 24.2(a)(2)(A), the property's overall value is not a relevant factor in setting the bond. Rather, the only relevant factor is the value of the property interest's rent or revenue." Id. Because "[t]he only evidence at the hearing pertaining to this factor was that the property would rent anywhere from $350 to $500 a month . . . the trial court abused its discretion in setting the bond at $75,000."
Indeed, when there is no evidence of a real property's rent or revenue value, there can be no determination of "whether any amounts over the real property's rent or revenue value" are excessive. Fuentes v. Zaragoza, No. 01-16-00251-CV, 2016 WL 3023811, at *4 (Tex. App.—Houston [1st Dist.] May 26, 2016, order). In Fuentes, the evidence established that the fair market value of the real property awarded to Zaragoza was $3.3 million. The trial court ordered the amount of security for the judgment for the recovery of an interest in real property at $3.3 million, in the absence of any evidence of the property's rent or revenue value. Id. Consequently, the court concluded that it was error to require an additional $3.3 million to secure the award of real property included in the final judgment. Id.
Likewise, in this case, there was no evidence of the rent or revenue value of the real property awarded to Peggy in the final decree. In the absence of such evidence, it was improper to include an additional $400,000.00 in the supersedeas bond amount. Such inclusion renders the supersedeas bond amount excessive.
We therefore hold that the supersedeas bond in this case was excessive only to the extent that it included the value of the real property awarded to Peggy in the final decree. All other amounts included by the trial court were proper and in keeping with Rule 24.2 of the Texas Rules of Appellate Procedure and with Section 52.006 of the Texas Civil Practice and Remedies Code. And, although we find the bond to be excessive, the evidence in the record does not allow this Court to determine the appropriate amount of security to supersede enforcement of the underlying judgment.
We reverse the trial court's order setting bond in the amount of $1,266,488.20. Effective January 15, 2018, or any earlier order of the trial court setting a new bond amount, and without further order of this Court, we lift our order granting a stay of execution and enforcement of the final decree. Pending that date, the parties may, if either party so chooses, return to the trial court and its continuing jurisdiction to provide evidence of the rent or revenue value of the real property awarded to Peggy in the final decree and to seek a new bond setting.
The trial court has continuing jurisdiction to modify the amount or type of security required to continue the suspension of a judgment's execution. TEX. R. APP. P. 24.3(a).
IT IS SO ORDERED.
BY THE COURT Date: December 18, 2017