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EL CABALLERO RANCH, INC. v. GRACE RIVER RANCH, L.L.C., 04-16-00298-CV. (2016)

Court: Court of Appeals of Texas Number: intxco20160824680 Visitors: 4
Filed: Aug. 24, 2016
Latest Update: Aug. 24, 2016
Summary: OPINION OPINION ON APPELLANT'S MOTION CHALLENGING SUPERSEDEAS RULING MARIALYN BARNARD , Justice . Appellants El Caballero Ranch, Inc. aka El Caballero, L.L.C. and Laredo Marine, L.L.C. (collectively, "El Caballero") filed a "Motion for Emergency Temporary Order and Motion Challenging Supersedeas Ruling," challenging the trial court's denial of their request to set a bond to supersede the judgment during the pendency of their appeal. In its motion, El Caballero argues the trial court abused
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OPINION

OPINION ON APPELLANT'S MOTION CHALLENGING SUPERSEDEAS RULING

Appellants El Caballero Ranch, Inc. aka El Caballero, L.L.C. and Laredo Marine, L.L.C. (collectively, "El Caballero") filed a "Motion for Emergency Temporary Order and Motion Challenging Supersedeas Ruling," challenging the trial court's denial of their request to set a bond to supersede the judgment during the pendency of their appeal. In its motion, El Caballero argues the trial court abused its discretion because it improperly applied Rule 24.2(a)(3) of the Texas Rules of Appellate Procedure instead of Rule 24.2(a)(2). We temporarily stayed the trial court's order denying El Caballero's request. Because we conclude the judgment in this case is primarily declaratory and injunctive in nature, we hold the trial court did not abuse its discretion in applying Rule 24. 2(a)(3). Therefore, we dissolve the temporary stay and deny El Caballero's motion.

BACKGROUND

This appeal arises out of a declaratory judgment action brought by Grace River Ranch, L.L.C. ("Grace River") against El Caballero. This court previously considered a petition for writ of mandamus arising from these same proceedings, and the following facts, which are pertinent to this opinion, have been drawn from our previous opinion. See In re El Caballero Ranch, Inc., No. 04-14-00584-CV, 2014 WL 6687242 (Tex. App.-San Antonio Nov. 26, 2014, no pet.) (mem. op.).

Grace River Ranch brought suit against El Caballero Ranch, Inc. in April 2013 seeking a declaration as to the existence and validity of alleged private and public easements across El Caballero's real property located in La Salle County, and to enjoin interference with Grace River's use of those easements. In its answer, El Caballero denied the validity of the claimed easements asserting defenses of termination, failure of purpose, and abandonment. Grace River filed a motion for traditional and no-evidence summary judgment in July 2013. Grace River sought summary judgment that the claimed easements are valid; enjoining interference by El Caballero; and denying El Caballero's defenses of termination, impossibility, abandonment, and failure of purpose. El Caballero timely responded to the summary judgment motion. Days before the summary judgment motion was set to be heard, El Caballero filed an amended answer and counterclaim, asserting for the first time an affirmative defense based on adverse possession and limitations, and counterclaims for declaratory judgment and seeking to quiet title to the disputed property. On the same day, Laredo Marine, L.L.C, owner of the 7C's Ranch, another property affected by Grace River's claimed easements, filed a petition in intervention. Laredo Marine also denied the validity of the claimed leases on the basis of termination, abandonment, and impossibility; asserted affirmative defenses of termination, adverse possession, and limitations; and raised counterclaims for declaratory judgment and to quiet title. The trial court conducted a hearing on Grace River's summary judgment motion in September 2013 and, following extensive briefing by the parties, issued an order granting the motion on July 7, 2014. Specifically, the trial court found: GRACE RIVER RANCH, LLC (Grace River) has a valid and subsisting nonexclusive easement across El Caballero Ranch for vehicular and pedestrian access to and egress from Grace River Ranch along that part of the Grace River Easement lying within El Caballero Ranch, with the right to use and maintain the road thereon and any culverts, low water crossings, or bridges lying along the Grace River Easement. The court also found a valid and subsisting public road across El Caballero Ranch which "has not been abandoned or relinquished by La Salle County." The court did not grant any injunctive relief against El Caballero. After the trial court granted Grace River's motion for partial summary judgment, Grace River's counsel requested keys and access codes for the gates located on El Caballero Ranch along the easement. When El Caballero refused, Grace River filed a motion for contempt. Both parties also sought clarification of the trial court's summary judgment order. Following a hearing, the trial court entered its first amended order granting Grace River's summary judgment motion. In the amended order, signed August 4, 2014, the trial court granted Grace River's motion for partial summary judgment, stating: IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Order Granting Traditional and No-Evidence Motion for Summary Judgment of Grace River Ranch, LLC (this "Order") is intended to be Interlocutory in nature adjudicating only those claims made the subject of the Motion. This Order does not adjudicate claims filed by any Party hereto and made after the filing date of the Motion. Pending adjudication of these claims, GRACE RIVER shall have the use of and ability to maintain the Grace River Easement as specified above. Handwritten below the judge's signature line is, "This order is effective August 14, 2014." El Caballero filed [a] petition for writ of mandamus seeking to vacate the portion of the trial court's order permitting Grace River's immediate use of and ability to maintain the disputed easement before all parties' defenses to the claimed easements have been fully and finally determined on the merits.

Id. at *1-*2. In that opinion, we granted mandamus relief on the basis that the trial court's partial summary judgment was interlocutory, and we directed the trial court to vacate the portion of the order granting Grace River the ability to immediately use and maintain the claimed easements. Id. at *3. The cause then proceeded to a final jury trial on the remaining claims, specifically, Grace River's claims for damages and attorney's fees. The jury ultimately returned a verdict that Grace River suffered no damages, and the trial court rendered a final judgment, incorporating the previously rendered partial summary judgment in favor of Grace River and awarding Grace River attorney's fees, but no damages.

Thereafter, Grace River and El Caballero filed cross motions for supersedeas bond, each requesting the trial court to permit one of them to post a supersedeas bond to either enforce or suspend the judgment. See TEX. R. APP. P. 24.1. At the evidentiary hearing, Grace River argued that because the judgment was declaratory and injunctive in nature, Rule 24.2(a)(3) applied, and under Rule 24.2(a)(3), the trial court may allow it to post security to enforce the judgment so long as the amount would secure El Caballero against any loss or damage. See id. 24.2(a)(3). El Caballero, on the other hand, argued the judgment awarded Grace River an interest in real property, and as a result, Rule 24.2(a)(2) applied. See id. 24.2(a)(2). El Caballero further argued because rule 24.2(a)(2) applied, the trial court had no discretion in denying its request to post security to supersede the judgment. See id. The trial court ultimately determined Rule 24.2(a)(3) applied and signed an order setting $110,250.00 as the amount of bond necessary for Grace River to post to immediately enforce the judgment and access the easements during the pendency of the appeal.

El Caballero then filed its motion for emergency relief, asking us to immediately stay enforcement of the order and vacate the trial court's order. We granted El Caballero's motion in part and temporarily stayed the trial court's order, pending further orders of this court, and requested Grace River to file a response to the motion.

ANALYSIS

In its motion, El Caballero argues the trial court abused its discretion by denying its request to post security to suspend enforcement of the trial court's judgment. According to El Caballero, we recognized its right to suspend the judgment in our above-referenced opinion granting it mandamus relief, and the trial court's denial of its request to post security collaterally attacks that holding. El Caballero also contends the trial court abused its discretion because it improperly applied Rule 24.2(a)(3) instead of Rule 24.2(a)(2) because the judgment involves the recovery of an interest in real property. As an alternative position, El Caballero asserts that even if Rule 24.2(a)(3) applies, the trial court abused its discretion because there is no amount of security that would secure it against loss or damage in the event it prevails in its appeal of the underlying judgment.

Standard of Review

We review a trial court's ruling under Rule 24 under an abuse of discretion standard. Devine v. Devine, No. 07-15-00126-CV, 2015 WL 2437949, at *2 (Tex. App.-Amarillo May 20, 2015, order) (per curiam); BP Am. Prod. Co. v. Red Deer Res., LLC, No. 07-14-00032-CV, 2014 WL 3419496, at *2 (Tex. App.-Amarillo July 11, 2014, order) (per curiam); Orix Capital Mkts., LLC v. La Villita Motor Inns, J.V., No. 04-09-00573-CV, 2010 WL 307885, at *3 (Tex. App.-San Antonio Jan. 27, 2010, pet. denied) (mem. op.). "A trial court abuses its discretion when it renders an arbitrary and unreasonable decision lacking support in the facts or circumstances of the case, or when it acts in an arbitrary or unreasonable manner without reference to guiding rules or principles." Devine, 2015 WL 2437949, at *2 (citing Samlowski v. Wooten, 332 S.W.3d 404, 410 (Tex. 2011)).

Supersedeas

In general, a judgment debtor is entitled to supersede a judgment while pursuing an appeal. See TEX. R. APP. P. 24.1; see also Miga v. Jensen, 299 S.W.3d 98, 100 (Tex. 2009); Devine, 2015 WL 2437949, at *2; BP Am., 2014 WL 3419496, at *2; Orix Capital Mkts., 2010 WL 307885, at *2. Supersedeas is a writ that preserves the status quo of a matter as it existed before the issuance of a final judgment from which an appeal is being taken. Devine, 2015 WL 2437949, at *2; BP Am., 2014 WL 3419496, at* 2 (citing Smith v. Tex. Farmers Ins. Co., 82 S.W.3d 580, 585 (Tex. App.-San Antonio 2002, pet. denied); Orix Capital Mkts., 2010 WL 307885, at *2 (same).

Rule 24.1 outlines the requirements for suspending enforcement of a judgment pending an appeal in civil cases. Devine, 2015 WL 2437949, at *2; Orix Capital Mkts., 2010 WL 307885, at *2. It provides that a judgment debtor may supersede the judgment by filing a "good and sufficient bond" — the amount of which is determined by Rule 24.2. TEX. R. APP. P. 24.1; Devine, 2015 WL 2437949, at *2; Orix Capital Mkts., 2010 WL 307885, at *2. Under Rule 24.2, the amount of the bond depends on the type of judgment, which could either be a recovery of money, interest in real property, or "something other than money or an interest in property." TEX. R. APP. P. 24.2(a)(1)-(a)(3); Devine, 2015 WL 2437949, at *2; BP Am., 2014 WL 3419496, at *2; Orix Capital Mkts., 2010 WL 307885, at *2. Rule 24.4 authorizes appellate courts to engage in a limited supersedeas review, specifically to review (1) the sufficiency or excessiveness of the amount of security, (2) the sureties on a bond, (3) the type of security, (4) the determination whether to permit suspension of enforcement, and (5) the trial court's exercise of discretion in ordering the amount and type of security. TEX. R. APP. P. 24.4(a); Devine, 2015 WL 2437949, at *2; BP Am., 2014 WL 3419496, at *2; Orix Capital Mkts., 2010 WL 307885, at *3. After completing this limited review, we may require that the amount of a bond be increased or decreased and that another bond be provided and approved by the trial court clerk. TEX. R. APP. P. 24.4(d); Devine, 2015 WL 2437949, at *2; Orix Capital Mkts., 2010 WL 307885, at *3. We may also require other changes in the trial court order and remand for entry of findings of fact or for the taking of evidence. TEX. R. APP. P. 24.4(d); Devine, 2015 WL 2437949, at *2; Orix Capital Mkts., 2010 WL 307885, at *3.

Discussion

In its motion, El Caballero first contends the trial court abused its discretion because its order does not comply with our holding rendered in our above referenced opinion granting it mandamus relief. According to El Caballero, in that opinion, we held that by allowing Grace River to immediately access the easements, it was denied its right to suspend the enforcement of the judgment. El Caballero thus asserts that the trial court's order denying its request to post bond to suspend enforcement of the judgment essentially conflicts with our holding because it deprives El Caballero of its right to suspend the judgment.

We disagree. El Caballero's argument misconstrues this court's reasoning. In our prior opinion, we held appellants were deprived of the right to suspend enforcement of the judgment because there was no final appealable judgment at that time. See In re El Caballero Ranch, Inc., 2014 WL 6687242, at *3. It is undisputed that the judgment in that case was interlocutory, and we specifically stated that "[b]y allowing Grace River access to and the ability to maintain the claimed easement before an appealable judgment has been entered, the trial court has deprived El Caballero the right to suspend enforcement of the partial summary judgment while obtaining appellate review." Id. at *3 (emphasis added). Here, a final appealable judgment has been entered, which El Caballero is currently appealing. Under Rule 24, a judgment debtor's right to supersede the enforcement of a judgment during the pendency of an appeal is not absolute. Rule 24.2(a)(3) recognizes that a trial court may refuse to allow a judgment debtor, such as El Caballero, to supersede the judgment so long as the judgment is considered an "other" judgment and the judgment creditor, in this case Grace River, posts security "in an amount and type that will secure the judgment debtor against any loss or damage caused by the relief granted . . . ." See TEX. R. APP. P. 24.2(a)(3). Accordingly, we cannot conclude our prior opinion required the trial court to grant El Caballero's request to supersede the judgment.

This brings us to El Caballero's next argument — that the trial court abused its discretion because it improperly applied Rule 24.2(a)(3) rather than Rule 24.2(a)(2). El Caballero argues that the trial court's judgment should be categorized as a recovery of an interest in real property under Rule 24.2(a)(2) because Grace River recovered a private and public easement, which El Caballero argues is a real property interest. To support its argument, El Caballero points out that Grace River "judicially admitted" the case involved the recovery of an interest in real property on two occasions: first, when it set venue in La Salle County by arguing section 15.011 of the Texas Civil Practice and Remedies Code applied, and second, when it filed a lis pendens in the real property records, stating the lawsuit involves claims for public and private easements. See TEX. CIV. PRAC. & REM. CODE § 15.011 (West 2002) (stating that if case involves recovery of real property or estate or interest in real property, venue must be in city property is located).

Grace River, however, contends the judgment in this case involves a recovery that is declaratory and injunctive in nature because the final judgment declared easements in its favor and enjoined El Caballero from interfering with its use of those easements. As an alternative argument, Grace River argues Rule 24.2(a)(2) applies only to final judgments adjudicating a possessory interest in real property, and an easement is a nonpossessory interest in real property.

As indicated above, Rule 24.2 sets out the amount of the bond required to supersede a judgment. See TEX. R. APP. P. 24.2; Orix Capital Mkts., 2010 WL 307885, at *2. When the judgment is for the recovery of money, the amount of the bond must equal the sum of compensatory damages awarded in the judgment, interest for the estimated duration of the appeal, and costs awarded in the judgment. TEX. R. APP. P. 24.2(a)(1); Devine, 2015 WL 2437949, at *2; Orix Capital Mkts., 2010 WL 307885, at *2. When the judgment is for the recovery of an interest in real or personal property, the trial court will determine the type of security that the judgment debtor must post. TEX. R. APP. P. 24.2(a)(2); Devine, 2015 WL 2437949, at *2; Orix Capital Mkts., 2010 WL 307885, at *2. When the judgment is for something other than money or an interest in property, the trial court must set the amount and type of security that the judgment debtor must post. See TEX. R. APP. P. 24.2(a)(3); see also Devine, 2015 WL 2437949, at *2; Orix Capital Mkts., 2010 WL 307885, at *2. Rule 24.2(a)(3) also provides, as previously noted, that a trial court has discretion to decline to permit the judgment debtor to supersede the judgment "if the judgment creditor posts security ordered by the trial court in the amount and type that will secure the judgment debtor against any loss or damage caused" in the event the judgment debtor prevails on appeal. TEX. R. APP. P. 24.2(a)(3); see Devine, 2015 WL 2437949, at *2; Orix Capital Mkts, 2010 WL 307885, at *3.

Turning to El Caballero's argument, we must determine whether the type of judgment in this case is a recovery of an interest in real property or the recovery of "something other than money or an interest in property." See TEX. R. APP. P 24.2(a)(2), (a)(3). In the event we determine that the judgment awarded the recovery of an interest in real property, the trial court abused its discretion by failing to allow El Caballero to post bond and supersede the enforcement of the judgment during the pendency of the appeal. See TEX. R. APP. P. 24.2(a)(2); Devine, 2015 WL 2437949, at *2; Orix Capital Mkts, 2010 WL 307885, at *3. However, in the event we determine that the judgment awarded Grace River something "other than money or an interest in real property," then the trial court has discretion to decline El Caballero's request to supersede the judgment so long as Grace River posts security in an amount that would secure El Caballero against any loss or damage. See TEX. R. APP. P. 24.2(a)(2); see also Devine, 2015 WL 2437949, at *3; Orix Capital Mkts, 2010 WL 307885, at *3.

We agree with Grace River that the judgment in this case is primarily declaratory and injunctive in nature. Here, we look to the final judgment itself to determine the type of recovery awarded. The final judgment declares a valid, express easement in favor of Grace River across El Caballero's ranch as well as a valid public road across El Caballero's ranch. The final judgment further enjoins El Caballero from interfering with or preventing Grace River's use of the declared easements. El Caballero appears to be relying on the subject matter of the declaratory portion of the judgment to argue that the judgment is for the recovery of an interest in real property because the trial court declared Grace River had a valid easement. We disagree with El Caballero's interpretation of the judgment because it is undisputed the original suit filed by Grace River sought declaratory and injunctive relief, which the trial court ultimately awarded.

El Caballero next points to Grace River's decisions to set venue in accordance with section 15.011 of the Texas Civil Practice and Remedies Code and to file a lis pendens in the real property records as support that the suit is for the recovery of real property. However, we find no authority, nor does El Caballero point to any, requiring us to consider those actions when determining the type of recovery awarded in the final judgment for purposes of supersedeas review. In determining what type of supersedeas is appropriate, both the trial court and this court look to the type of judgment. See TEX. R. APP. P. 24.2(a). And, contrary to El Caballero's assertion that its suit to quiet title and trespass to try to title against Grace River transforms the recovery to one of real property, a review of those pleadings shows El Caballero was ultimately seeking a declaration that the easements Grace River sought were invalid and unenforceable. Moreover, we cannot ignore that the specific portion of the judgment El Caballero seeks to suspend by posting security is the injunctive portion, precluding it from interfering with Grace River's use of the easements. See Klein Ind. Sch. Dist. v. Fourteenth Court of Appeals, 720 S.W.2d 87, 88 (Tex. 1986) (stating because disputed portion of judgment is injunction, judgment debtor's entitlement to supersedeas is controlled by subsection pertaining to "other" judgments).

Accordingly, we conclude the final judgment in this case is declaratory and injunctive in nature, and as a result, Rule 24.2(a)(3) applies. See Orix Capital Mkts., 2010 WL 307885, at *3 (holding because judgment is primarily declaratory in nature, Rule 24.2(a)(3) applies); see also Klein, 720 S.W.2d at 88. As mentioned above, Rule 24.2(a)(3) affords the trial court discretion to decline to permit the judgment debtor to supersede the judgment "if the judgment creditor posts security ordered by the trial court in the amount and type that will secure the judgment debtor against any loss or damage caused" in the event the judgment debtor prevails on appeal. TEX. R. APP. P. 24.2(a)(3); see Devine, 2015 WL 2437949, at *2; Orix Capital Mkts., 2010 WL 307885, at *3. Here, the record reflects the judgment creditor, Grace River, posted security in the amount of $110,250.00. Therefore, we conclude the trial court did not abuse its discretion in applying Rule 24.2(a)(3) and denying El Caballero the right to supersede the judgment.

Finally, El Caballero argues that in the event we conclude Rule 24.2(a)(3) applies, the trial court abused its discretion because the amount of security posted by Grace River does not secure it against loss or damage. El Caballero argues Grace River seeks to access the easements so that it can build a permanent concrete structure on the easement. According to El Caballero, this structure would permanently change the nature and quality of its real property, causing it irreparable harm. Thus, no amount of security would secure it against loss or damage in the event it prevails on its underlying judgment.

Rule 24.2(a)(3) requires that the amount and type of security ordered must "secure the judgment debtor against any loss or damage" caused in the event the judgment debtor prevails on appeal. See TEX. R. APP. P. 24.2(a)(3). Here, the record reflects the trial court heard testimony that Grace River seeks to access and make repairs to a low water crossing originally constructed by La Salle County and located on the public easement as opposed to the private easement granted in favor of El Caballero. Although El Caballero describes these repairs as permanent and causing irreparable harm, the record contains evidence that the repairs are nonconcrete and removable. Moreover, both El Caballero and Grace River stipulated that the cost of removing the repairs Grace River seeks to make would be approximately $25,000. Accordingly, we conclude the trial court's order setting $110,250 as the amount of security is more than an appropriate amount that would secure El Caballero against any loss or damage. See id.

CONCLUSION

Because we conclude the judgment in this case is declaratory and injunctive in nature, we hold the trial court did not abuse its discretion in applying Rule 24.2(a)(3) of the Texas Rules of Appellate Procedure and denying El Caballero Ranch's request to set a bond to supersede the judgment. Accordingly, we dissolve the temporary stay previously granted by this court and deny El Caballero Ranch's motion challenging the trial court's supersedeas ruling.

It is so ordered.

Source:  Leagle

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