Rent Seeking

The Lavon Water Supply Corp. sued TierOne Converged Networks to evict TierOne and its equipment from Lavon’s water towers. TierOne superseded the eviction by depositing $10,800 — one year of rent — into the registry of the court. Lavon then moved to increase the bond to $40,500, basing the increase on the offer of a competing company to lease the space for $3,375 per month. The trial court granted the request to increase the bond, but the Court of Appeals set aside that order on motion for review.

In setting the supersedeas bond in an eviction suit, the court must consider the reasonable value of the rents likely to accrue during appeal. Although the testimony of Lavon’s witnesses established the amount of rent that TierOne’s competitor proposed to pay, there was no evidence that $3,375 was a reasonable rental rate for space on Lavon’s water towers. In addition, TierOne had offered to waive the exclusivity provision in its lease, and the testimony established that TierOne’s competitor was willing to lease space from Lavon with TierOne’s equipment still in place. Thus, there was no evidence that Lavon was being deprived of any increased rents, and the order increasing the supersedeas bond was vacated.

TierOne Converged Networks, Inc. v. Lavon Water Supply Corp., No. 05-13-00370-CV