Be careful what you collect . . .

In Cruz v. Ghani, a judgment creditor executed on the judgment debtor’s condominium – realizing a sale price of $25,000, despite a market value of $217,500 – only to have the judgment later reversed on appeal. In the ensuing lawsuit about wrongful execution, the (former) judgment debtor prevailed and won judgment for the market value. The trial court required a supersedeas bond for the full amount and the Fifth Court affirmed. It concluded that the purpose of such an award was to compensate for loss, and thus did not fall within a line of authority holding that awards for equitable disgorgement do not have to be bonded, as they “are not based on an actual pecuniary loss suffered by the plaintiff, but on the defendant’s ill-gotten gains.” No. 05-17-00566-CV (Jan. 17, 2018) (mem. op.)

Discovery problems = bond problems

Acra v. Bonaudo illustrates the “falling dominoes” problem that can arise from  discovery issues. Appellants sought to supersede a judgment with relatively small bonds. The district court found problems with their discovery responses, which interfered with their ability to establish a low net worth at the hearing about bond size. The Fifth Court affirmed: “On the record before us, we deny the request to vacate the trial court’s orders. Without evidence of all of Acra’s and Secner HR’s assets and liabilities, the trial court could not determine their individual net worth. And, without a determination of their individual net worth, the amount of bond, set in accordance with civil practice and remedies code section 52.006 and appellate rule 24.2(a)(1), was not an abuse of discretion.”  No. 05-17-00451-CV (Dec. 8, 2017) (mem. op.)

Attorney Fees Don’t Need to Be Superseded in TCPA Appeals

With all the TCPA cases running through the appellate courts, it’s worth taking a quick look at one procedural issue. The question presented by way of motion to the Court of Appeals was whether the appellants were required to supersede the attorney fees awarded to the defendants in a judgment dismissing the plaintiffs’ business disparagement claims. The appellate court held that attorney fees are not damages, and therefore the trial court did not err in denying the defendants’ motion to raise the supersedeas amount to include the attorney fees.

Mansik & Young Plaza LLC v. K-Town Mgmt., LLC, No. 05-15-00353-CV

A Prevailing Party Fee Provision Does Not Make Attorney Fees Compensatory Damages

When a judgment judgment for breach of contract is entered that includes an award of attorney fees, the defendant is generally not required to supersede that fee award in order to suspend judgment. Instead, the defendant only has to supersede post-judgment interest on the award for the expected duration of the appeal. In this case, Highland Capital Management was awarded $2.8 million in attorney fees, but the defendant only bonded out $287,000. Highland moved to increase the supersedeas bond, arguing that the attorney fees were actually compensatory damages because the parties’ contract contained a clause requiring the defendant to pay Highland’s fees in the event of a breach. The Court of Appeals rejected that argument, essentially concluding that an award of attorney fees under the contract was no different than an award of attorney fees under Chapter 38 of the Civil Practice & Remedies Code (which Highland had also sought in its pleadings and at trial).

Highland Capital Mgmt., L.P. v. Daugherty, No. 05-14-01215-CV