Opinion
NUMBER 13-18-00058-CV
04-25-2019
GORDON DEAN HALEY AND ANTON SCOTT HALEY, INDIVIDUALLY AND AS CO-EXECUTORS OF THE ESTATE OF MARGARET L. HALEY, Appellants, v. BENEFICIAL FINANCIAL I INC, SUCCESSOR BY MERGER TO BENEFICIAL TEXAS INC., Appellee.
On appeal from the 94th District Court of Nueces County, Texas.
ORDER
Before Chief Justice Contreras and Justices Longoria and Perkes
Order Per Curiam
Appellants Gordon Dean Haley and Anton Scott Haley, proceeding pro se, requested the trial court determine a sufficient security to suspend enforcement of the judgment during the pendency of this appeal. See TEX. R. APP. P. 24. Appellant Gordon Dean Haley seeks review of the trial court's decision, arguing the amount is excessive because it will cause appellants substantial economic harm. See id. Because we hold the trial court did not abuse its discretion in determining the amount of the security, we deny appellant Gordon Dean Haley's request for relief.
Although the motion purports to be on behalf of both appellants, only appellant Gordon Dean Haley signed the motion. See TEX. R. APP. P. 9.1(b) (requiring each unrepresented party to sign any document filed on his behalf). However, this defect has no bearing on our analysis.
I. BACKGROUND
Appellee Beneficial Financial I Inc. filed suit for judicial foreclosure of its lien on the real property located at 4910 Lavaca Drive, Corpus Christi, Texas 78411 (the Property). The lien secured a promissory note executed by appellants' parents in 2006. Following the death of their mother in 2011, appellants acquired undivided one-half interests in the Property. The last payment on the note was made in June 2011. The trial court granted appellant's motion for summary judgment and this appeal ensued.
Appellee sought to enforce its judgment by obtaining an order of sale with writ of possession from the trial court. The district court issued a writ of execution and the Property was noticed for a sheriff's sale on April 2, 2019. Appellants filed a motion for emergency relief, temporary restraining order, and stay of execution pending appeal. We issued a temporary stay and requested appellee to file a response to the motion. Appellee responded that appellants were not entitled to suspend enforcement of the judgment because they failed to file a supersedeas bond or its equivalent. See id. We lifted the temporary stay and denied appellants' motion.
Appellant Gordon Dean Haley then filed a "Motion for Determination and Setting of Appeal Bond" in the trial court, arguing the judgment was for money and thus appellants should be exempted from posting any security because his "net worth is less than $0.00." See id. R. 24.2(a)(1)(A). To support his argument, appellant Gordon Dean Haley attached an affidavit listing his assets and liabilities. Appellant Anton Scott Haley filed his own motion making identical arguments. He attached a Statement of Inability to Afford Payment of Court Costs or an Appeal Bond that includes information about his current financial circumstances.
Appellee filed a response, arguing the judgment is for the recovery of an interest in property and thus the security should be fixed at the rental value of the Property during the pendency of the appeal. See id. R. 24.2(a)(2). Appellee provided the trial court with evidence that the monthly rental value is $1,375 and asked the trial court to fix the amount of the security at $20,625 based on an estimated fifteen-month appeal period.
Appellant Gordon Dean Haley filed a reply, arguing that even if the judgment is for the recovery of an interest in property, the amount appellee requested would cause appellants substantial economic harm. See id. R. 24.2(b). As additional supporting evidence, he attached a notice from April 11, 2019, denying his application for a personal loan; a utility statement from March 14, 2019, showing a delinquent balance; a statement showing his student loan balances; and his 2017 application to FEMA for disaster assistance and the denial of his application. Appellant again asked the trial court to fix the security amount at $0 or in the alternative, an amount not to exceed $350.
The trial court held a hearing on April 12, 2019, fixing the bond amount at $16,500 based on the twelve-month rental value of the Property. The Property is currently scheduled to be sold at a sheriff's sale on May 7, 2019. Appellant Gordon Dean Haley filed a motion in this Court for emergency review of the trial court's determination. The gravamen of his argument is the trial court failed to give due consideration to appellants' demonstrated inability to pay the security amount. We have received a response from appellee opposing the motion on various grounds.
II. APPLICABLE LAW AND STANDARD OF REVIEW
In general, a judgment debtor is entitled to suspend enforcement of the judgment while pursuing an appeal. Miga v. Jensen, 299 S.W.3d 98, 99 (Tex. 2010). But that right is not unconditional; a judgment debtor may supersede a judgment by written agreement with the judgment creditor, filing a good and sufficient bond, depositing cash or its equivalent in lieu of a bond, or providing alternate security ordered by the court. TEX. R. APP. P. 24.1(a). When the judgment is for the recovery of an interest in real property, the trial court determines the type of security, but the amount must be at least the rental value of the property. Id. R. 24.2(a)(2). However, the trial court must lower the required amount to a sum that will not cause the judgment debtor substantial economic harm if, after notice to all parties and a hearing, the court finds the required amount is likely to cause the judgment debtor substantial economic harm. Id. R. 24.2(b). "A judgment debtor seeking to lower the amount of security . . . has the burden to prove it will suffer substantial economic harm if the amount is not decreased." Drake Interiors, Inc., v. Thomas, 531 S.W.3d 325, 328 (Tex. App.—Houston [14th] Dist. 2017, no pet.).
Appellate courts are authorized to review the sufficiency or excessiveness of the security amount. TEX. R. APP. P. 24.4(a)(1). Trial judges have broad discretion in determining the security type and amount. Hernandez v. U.S. Bank Tr. N.A. for LSF8 Master Participation Tr., 527 S.W.3d 307, 309 (Tex. App.—El Paso 2017, no pet.) (citing Miller v. Kennedy & Minshew, P.C., 80 S.W.3d 161, 164 (Tex. App.—Fort Worth 2002, no pet.)). Accordingly, we review a trial court's supersedeas ruling for an abuse of discretion. In re Kajima Int'l, Inc., 139 S.W.3d 107, 112 (Tex. App.—Corpus Christi 2004) (orig. proceeding) (citing Kennedy & Minshew, 80 S.W.3d at 166). A trial court abuses its discretion if it acts arbitrarily or unreasonably without reference to any guiding rules or principles. Bowie Mem'l Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex. 2002) (per curiam) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985)). When presented with conflicting evidence, a trial court does not abuse its discretion when some evidence of substantive and probative character supports its decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009).
III. ANALYSIS
As a preliminary matter, the Court notes that, although appellant Gordon Dean Haley complains about the manner in which the trial court conducted the supersedeas hearing, he has failed to provide us with a reporter's record of the proceeding. See Melendez v. Exxon Corp., 998 S.W.2d 266, 278 (Tex. App.—Houston [14th Dist.] 1999, no pet.) (noting appellant's burden to present a record to the appellate court showing the error complained of). Accordingly, our review is limited to errors shown in the record before us, which includes each of appellants' motions, appellee's response, appellant Gordon Dean Haley's reply, and the supporting evidence attached to each. See Samara v. Samara, 52 S.W.3d 455, 457 (Tex. App.—Houston 1st Dist.] 2001, pet. denied).
We conclude the judgment, although based on an unpaid debt, was for the recovery of an interest in real property. A foreclosure is defined as "[a] legal proceeding to terminate a mortgagor's interest in property, instituted by the lender (the mortgagee) either to gain title or to force a sale in order to satisfy the unpaid debt secured by the property." Foreclosure, BLACK'S LAW DICTIONARY (10th ed. 2014). Indeed, the very reason appellants seek to enjoin the sale is to maintain their interests in the Property. Thus, the trial court applied Rule 24 correctly by fixing the security amount based on the rental value of the Property instead of appellants' net worth. See TEX. R. APP. P. 24.2(a).
We also conclude the amount of the security was consistent with Rule 24. The estimated rental value of the Property—$1,375.00—was undisputed. Rule 24 permits trial courts to "make any order necessary to protect the judgment creditor against loss or damage that the appeal might cause," id. R. 24.1(e), and a security's liability is conditioned on a judgment debtor's failure to pay the rental value "during the pendency of the appeal." Id. R. 24.1(d)(3). In this case, even though the appeal had been pending for approximately fifteen months at the time of the hearing, the trial court fixed the security amount based on a twelve-month appeal period. This exercise of the trial court's discretion benefited appellants. If it was within the trial court's discretion to fix a higher security amount, it naturally follows the security amount was not unreasonable or rendered without reference to Rule 24.
As to substantial economic harm, the record before us presents conflicting evidence on appellants' ability to pay the security amount; therefore, we conclude the trial court did not abuse its discretion. See Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009). Although each appellant provided some evidence they live month-to-month, appellant Gordon Dean Haley also averred in his affidavit that he owns a $65,000 home equity interest in his residence (not the Property). This equity interest alone should be sufficient to raise $16,500 but there is no evidence in the record appellant Gordon Dean Haley attempted to borrow against his equity interest. See Ramco Oil & Gas, Ltd. v. Anglo Dutch (Tenge) L.L.C., 171 S.W.3d 905, 917 (Tex. App.—Houston [14th Dist.] 2005, order) (listing ability to borrow funds as factor to consider). There is also no evidence in the record that either appellant applied for a surety bond, which, if approved, would require the payment of a premium, not the full amount of the security.
Finally, we note two undisputed facts—the last payment on the note was in June 2011 and appellant Anton Scott Haley has been residing at the Property "rent free" ever since that date. As the fact finder during a supersedeas hearing, it is the trial court's province to make credibility determinations and weigh the evidence. See G.M. Houser, Inc. v. Rodgers, 204 S.W.3d 836, 840 (Tex. App.—Dallas 2006, no pet.). Although appellant Anton Scott Haley filed a statement purporting to demonstrate his inability to pay the security amount, it was reasonable for the trial court to infer from these undisputed facts that appellant had more available funds than alleged in his statement. See Ramco Oil, 171 S.W.3d at 917 (listing available funds as factor to consider).
III. CONCLUSION
The trial court's order is affirmed.
IT IS SO ORDERED.
PER CURIAM Delivered and filed the 25th day of April, 2019.