Opinion
14-23-00810-CV
08-27-2024
HONGFEI LIU, Appellant v. MIN LI, Appellee
On Appeal from the 246th District Court Harris County, Texas Trial Court Cause No. 2020-75847
Panel consists of Justices Jewell, Zimmerer, and Hassan.
OPINION ON MOTION TO SUSPEND ENFORCEMENT OF JUDGMENT
Kevin Jewell Justice
Appellant Hongfei Liu appeals a divorce decree that in relevant part divides the marital estate and awards certain money damages. The trial court signed a June 7, 2024 order (the "Supersedeas Order"), which suspends enforcement of the "money" portion of the judgment based on Hongfei's filing of a cash deposit in lieu of bond. Also, as supersedeas for "all other parts" of the judgment, the court's Supersedeas Order enjoined Hongfei from dissipating or transferring assets to avoid the satisfaction of the judgment. Notwithstanding the injunction provision, however, the Supersedeas Order also states that the court denied Hongfei's request to suspend enforcement of the "property division."
Hongfei has filed a "Verified Motion to Suspend Enforcement of Judgment," which we construe as a motion to review the Supersedeas Order. See Tex. R. App. P. 24.4. In his motion, Hongfei challenges the part of the Supersedeas Order that denies his request to suspend enforcement of the "property division" portion of the judgment. Hongfei contends this part of the Supersedeas Order is error because: (1) the cash deposit in the amount approved by the court operates to supersede the entire judgment, including not only the money portion of the judgment but also the portions of the judgment that divide personal property; and, alternatively, (2) the court allowed enforcement of the "property division" despite the court's dissipation injunction as supersedeas for all non-money portions of the judgment, including the "property division."
For the reasons discussed below, we grant Hongfei's motion and order the judgment superseded pending appeal.
Background
This case arises from a September 26, 2023 final decree of divorce judgment, which declared appellant Hongfei Liu and appellee Min Li divorced, provided for the division of certain real and personal property, and awarded Min a money judgment against Hongfei as satisfaction for Min's reimbursement claim and attorneys' fees. The court signed findings of fact and conclusions of law.
Hongfei filed a timely motion for new trial and a timely notice of appeal. He also filed a motion for temporary orders pending appeal, followed by a first amended motion for temporary orders pending appeal. See Tex. Fam. Code § 6.709. In the amended motion, Hongfei sought an order suspending enforcement of the judgment during the appeal without a supersedeas bond. The trial court denied this relief on January 12, 2024.
On February 13, 2024, Min filed a "Motion to Enforce Property Division by Contempt," asserting that Hongfei had failed to deliver certain money and personal property awarded to her. On March 3, 2024, Hongfei filed a notice of filing supersedeas (deposit in lieu of bond). Hongfei deposited into the clerk's registry $17,484.91, an amount represented to be fifty percent of his net worth. See Tex. R. App. P. 24.2(a)(1). Hongfei supported his net worth assertion with an affidavit of Eric C. Haverkamp, a Certified Valuation Analyst and Certified Divorce Financial Analyst. Haverkamp's affidavit included specific facts describing Hongfei's liabilities and assets, including details of several bank and retirement accounts at issue. Haverkamp stated that Hongfei's net worth for supersedeas purposes is $34,969.81. Min contested Hongfei's net worth and opposed suspension of the judgment pending appeal.
Following hearings on March 26 and April 19, 2024, the court signed an order on April 19, stating in relevant part:
The Court finds that [Hongfei's] net worth is $34,969.82 and 50% of the non-exempt net worth of the judgment debtor is $17,484.91. Therefore, the Court accepts the $17,484.91 deposit in lieu of the supersedeas bond made by [Hongfei] for the money judgment.
With respect to the part of the judgment for real property, the Court further finds that the Petitioner failed to provide a basis for determining the rent or revenue of the Petitioner's interest in the real property. Therefore, the Court cannot determine the minimum amount necessary to sufficiently secure Petitioner's real property interest's rent or revenue, if any. Therefore, the Court declines to set an amount for a supersedeas amount for the part of the judgment that awards real property interests.
As supersedeas for all other parts of the judgment, the Court enjoins [Hongfei] from dissipating or transferring assets to avoid the satisfaction of the judgment.
The Court denies [Hongfei's] request to suspend the proceedings on the enforcement of the real property division. No enforcement of the property division can begin for twenty days after entry of this order as provided by TEX. R. APP. P. 24.3(c)(3).
The record shows that the text of the April 19 order was proposed by Hongfei's counsel on April 18, and that during the April 19 hearing Min's counsel went through the proposed order line by line asserting objections and requesting the court to strike specific language. The court agreed with some of Min's points and struck certain language from the order before signing it. The quoted text in this opinion omits the stricken language.
Min filed a motion for clarification of the April 19 order. Min asked the court to delete the second paragraph quoted above referencing the "real property division" because the judgment divides no real estate interests among the parties.She also asked the court to modify the language in the last paragraph to delete the term "real" property, again because no real property interests were being divided. She contended that the order needed clarification because she wanted to enforce the property division portion of the judgment and obtain access to certain personal property, namely retirements accounts. Min attached to her motion for clarification a copy of the court's April 19 order with markings showing exactly what language she asked the court to strike.
The judgment declares certain real property as the parties' separate property, but those declarations are not at issue for supersedeas purposes.
At a hearing on the motion for clarification, the court agreed with some of Min's arguments. The court granted her motion and signed the Supersedeas Order. The key language in the Supersedeas Order now reads:
The Court finds that [Hongfei's] net worth is $34,969.82 and 50% of the non-exempt net worth of the judgment debtor is $17,484.91. Therefore, the Court accepts the $17,484.91 deposit in
lieu of the supersedeas bond made by [Hongfei] for the money judgment.
As supersedeas for all other parts of the judgment, the Court enjoins [Hongfei] from dissipating or transferring assets to avoid the satisfaction of the judgment.
The Court denies [Hongfei's] request to suspend the proceedings on the enforcement of the property division. No enforcement of the property division can begin for twenty days after entry of this order as provided by TEX. R. APP. P. 24.3(c)(3).
Four days after the trial court signed the Supersedeas Order, Hongfei filed in our court a "Verified Motion to Suspend Enforcement of Judgment under Rule 24.4." Tex.R.App.P. 24.4. Challenging the Supersedeas Order's final paragraph, Hongfei argues that the court erred in refusing to suspend enforcement of the judgment for two independent reasons. First, he asserts that his cash deposit in lieu of bond superseded the entire judgment, including not only the money portion but also the personal property division. Second, he argues that even assuming his cash deposit superseded only the money portion of the judgment, the trial court made clear that the dissipation injunction operates as supersedeas for "all other parts" of the judgment. Therefore, Hongfei contends that all enforcement of the judgment must be suspended.
In response, Min contends that suspension of the property division deprives her of the immediate use of the various bank and retirement accounts awarded to her. Additionally, Min asserts that Hongfei's cash deposit in lieu of bond operates to supersede only the money portion of the judgment; thus, the trial court properly refused to suspend enforcement of the property division. Regarding the dissipation injunction language in the Supersedeas Order, Min argues that the appellate rules do not list injunctive relief against dissipation of assets as a method of supersedeas.
Analysis
A. Legal Standards
Texas Rule of Appellate Procedure 24 addresses suspension of enforcement of a judgment pending appeal in civil cases. Under Rule 24.1, "[u]nless the law or these rules provide otherwise, a judgment debtor may supersede the judgment by" filing an agreement with the judgment creditor for suspending enforcement of the judgment, posting a bond, making a deposit in lieu of a bond, or providing alternate security as ordered by the court. Tex.R.App.P. 24.1(a). The amount and type of security required depends on the type of judgment. See Tex. R. App. P. 24.2(a); Abdullatif v. Choudhri, 536 S.W.3d 48, 51 (Tex. App.-Houston [14th Dist.] 2017, no pet.) (op. on motion to review supersedeas order). Although generally there may be only one final judgment in a civil case, see Tex. R. Civ. P. 301, a judgment may provide for multiple types of recovery, including monetary, real and personal property, and other relief. See Tex. R. App. P. 24.2(a)(1), (2), (3); Abdullatif, 536 S.W.3d at 51-55 (judgment awarded monetary recovery in addition to personal property recovery). Like many divorce judgments, the present judgment awards recovery of money and personal property.
Portions of a judgment for recovery of money may be superseded by a bond, deposit, or security equal to the sum of compensatory damages awarded in the judgment, interest for the estimated duration of the appeal, and costs awarded in the judgment, subject to certain limitations. See Tex. R. App. P. 24.2(a)(1); Tex. Civ. Prac. & Rem. Code § 52.006. The amount of security may not, however, exceed the lesser of (1) fifty percent of the judgment debtor's net worth or (2) $25 million. Tex.R.App.P. 24.2(a)(1)(A), (B); Tex. Civ. Prac. & Rem. Code § 52.006(b)(1), (2). Here, the court accepted Hongfei's net worth evidence, and Min does not challenge the type or amount of security for the money portion of the judgment.
To supersede a judgment "for the recovery of an interest in ... personal property," the "court will determine the type of security the judgment debtor must post." Tex.R.App.P. 24.2(a)(2). The amount of that security must be at least the value of the property interest on the date the trial court rendered judgment. Tex.R.App.P. 24.2(a)(2).
Importantly, once a judgment is superseded, enforcement must be suspended. Tex.R.App.P. 24.1(f).
On the motion of a party, an appellate court may review the sufficiency or excessiveness of the amount of security, the type of security, and the trial court's determination whether to permit suspension of enforcement. Tex.R.App.P. 24.4(a)(1), (3), (4). We review the trial court's supersedeas ruling for an abuse of discretion. See In re Longview Energy Co., 464 S.W.3d 353, 358 (Tex. 2015); Am. Akaushi Ass'n, Inc. v. Twinwood Cattle Co., No. 14-21-00701-CV, 2022 WL 2678851, at *4 (Tex. App.-Houston [14th Dist.] July 12, 2022) (op. on motions); Abdullatif, 536 S.W.3d at 51; Ramco Oil & Gas, Ltd. v. Anglo Dutch (Tenge) L.L.C., 171 S.W.3d 905, 909 (Tex. App.-Houston [14th Dist.] 2005, order), disp. on merits, 207 S.W.3d 801 (Tex. App.-Houston [14th Dist.] 2006, pet. denied). Generally, the test for abuse of discretion is whether the trial court acted without reference to any guiding rules and principles or whether the trial court acted arbitrarily and unreasonably. Am. Akaushi Ass'n, Inc., 2022 WL 2678851, at *4. To the extent the ruling turns on a question of law, our review is de novo. Abdullatif, 536 S.W.3d at 51.
B. The court abused its discretion by failing to suspend enforcement of the judgment after Hongfei superseded the judgment.
We address only Hongfei's second contention because we conclude it is dispositive. He asserts that the final paragraph of the Supersedeas Order denying suspension of the "property division" is an abuse of discretion because it is inconsistent with the penultimate paragraph. Hongfei argues that, assuming his cash deposit did not suspend enforcement of the disputed property division portions of the judgment, the trial court had a duty to determine the type and amount of security required for the property division, and it did so when it ruled that "as supersedeas for all other parts of the judgment" Hongfei is enjoined from dissipating or transferring assets to avoid satisfaction of the judgment. Hongfei does not challenge the dissipation injunction.
First, we reject Min's argument that an injunction against dissipating or transferring assets is not a permissible mechanism to suspend enforcement of a judgment, including a judgment for recovery of property. Such injunctive relief is committed to the court's discretion under rule 24. See Tex. R. App. P. 24.2(d). Further, rule 24.2(a)(2), applicable to judgments for recovery of property, does not limit the trial court's discretion to the type or amount of security other than establishing a floor on the amount. Here, the dissipation injunction as part of the Supersedeas Order secures and preserves the status quo of the disputed personal property awarded to Min by the judgment.
Further, we agree with Hongfei that the final two paragraphs of the Supersedeas Order contain inconsistencies, which requires us to construe the order. We construe orders under the same rules of interpretation as those applied to other written instruments. Lone Star Cement Corp. v. Fair, 467 S.W.2d 402, 404-05 (Tex. 1971); In re Mittelsted, 651 S.W.3d 630, 635 (Tex. App.-Houston [14th Dist.] 2022, orig. proceeding). We look to the order as a whole and construe it in a way that, if possible, gives each provision meaning. Hemyari v. Stephens, 355 S.W.3d 623, 626 (Tex. 2011) (per curiam). When a trial court's order is unambiguous, we declare its intent in light of the literal language used, without considering matters extrinsic to the order. In re Mittelsted, 651 S.W.3d at 635; Ex parte Allen, 619 S.W.3d 813, 817 (Tex. App.-Houston [14th Dist.] 2020, pet. ref'd).
When an order is ambiguous, however, we may look to surrounding circumstances, including what the parties requested. See Hemyari, 355 S.W.3d at 626; Lone Star Cement, 467 S.W.2d at 404 ("Generally, an ambiguous order may be construed in light of the motion upon which it was granted. . ."). We are to adopt the construction that correctly applies the law. Reiss v. Reiss, 118 S.W.3d 439, 442 (Tex. 2003); MacGregor v. Rich, 941 S.W.2d 74, 75 (Tex. 1997) (per curiam); Hebisen v. Nassau Devel. Co., No. 14-02-00054-CV, 2002 WL 31890077, at *2 (Tex. App.-Houston [14th Dist.] Dec. 31, 2002, pet. denied) (mem. op., not designated for publication).
The trial court determined Hongfei's net worth and accepted the cash deposit to suspend enforcement of the money portion of the judgment. The Supersedeas Order further states that, "[a]s supersedeas for all other parts of the judgment," the court enjoins Hongfei from dissipating or transferring assets to avoid the satisfaction of the judgment. The phrase "all other parts of the judgment" encompasses the portions of the judgment that award recovery of non-monetary personal property, including the retirement accounts at issue. This language was contained in the original April 19 order. Although Min requested the court to delete several provisions of the April 19 order, she did not object to any part of the dissipation injunction paragraph or request its deletion at any of the three hearings leading to the Supersedeas Order or in her motion for clarification. The court granted her motion to clarify and signed the Supersedeas Order in the form as it appears before us. She does not challenge the dissipation injunction paragraph of the Supersedeas Order in our court other than contending that it is not a permissible method of supersedeas, an argument we have rejected. Given these circumstances, we decline to disregard that provision.
We are bound to construe the Supersedeas Order in a way that applies the law correctly. Reiss, 118 S.W.3d at 442; MacGregor, 941 S.W.2d at 75. Once the court accepted the cash deposit in lieu of bond and enjoined Hongfei from dissipating assets as supersedeas for "all other parts" of the judgment, suspension of the judgment was required. Tex. R. App. P 24.1(f). After ordering an injunction as supersedeas for all other parts of the judgment, the court had no discretion to deny Hongfei's request to supersede enforcement proceedings on the personal property portions of the judgment. The reporter's record shows that the trial court intended to allow execution on the retirement accounts despite the injunction as supersedeas, but that is not correct under the law once the judgment is superseded. We have been presented with no allegation or evidence that Hongfei has violated the injunction since April 19, 2024.
Conclusion
We grant Hongfei's motion and hold that the judgment is superseded.