Opinion
03-23-00263-CV
01-11-2024
Quantum Plus, LLC; and Lonestar Hospital Medicine Associates, P.A., Hospital Internists of Austin, P.A., Appellants//Cross-Appellant, v. Hospital Internists of Austin, P.A.; Hospital Internists of Texas; and Texas APN, LLC, Quantum Plus, LLC; and Lonestar Hospital Medicine Associates, P.A., Appellees//Cross-Appellees,
FROM THE 419TH DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-19-007224, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING
Before Chief Justice Byrne, Justices Kelly and Theofanis.
ORDER AND MEMORANDUM OPINION
PER CURIAM.
Appellees Hospital Internists of Austin, P.A. (HIA); Hospital Internists of Texas (HIT); and Texas APN, LLC (TAPN) (collectively, the "Medical Defendants") have filed a "Motion to Increase Supersedeas Bond," challenging the sufficiency of the supersedeas bond posted by the appellants, Quantum Plus, LLC and Lonestar Hospital Medicine Associates, P.A. Specifically, the Medical Defendants assert that the appellants have failed to include prejudgment interest in calculating the amount of bond required under Section 52.006 of the Texas Civil Practice and Remedies Code and Rule 24 of the Texas Rules of Appellate Procedure. We deny the motion. See Tex. Civ. Prac. &Rem. Code 52.006(a); Tex.R.App.P. 24.2(a).
BACKGROUND
On January 31, 2023, the trial court signed a final judgment awarding (1) $4,517,623 in actual damages to HIA, plus attorney's fees, to be paid by Quantum Plus; (2) $700,000 in actual damages to TAPN, to be paid by Quantum Plus and Lonestar Hospital Medicine Associates, jointly and severally; and (3) $1,200,000 in actual damages to HIT, to be paid by Quantum Plus and Lonestar Hospital Medicine Associates, jointly and severally. The judgment also awards prejudgment interest on the awards of actual damages, calculated at the annual rate of 7%, from May 31, 2018, to January 30, 2023.
Quantum Plus and Lonestar Hospital filed a notice of appeal and a supersedeas bond in the amount of $7,000,000. In response, HIA and Texas APN filed a motion in the trial court, requesting that the court increase the supersedeas to require an "amount of at least $11,325,000." Upon considering the motion and the appellants' response, the trial court denied the motion. The Medical Defendants then filed their motion to increase supersedeas bond in this Court. See Tex. Civ. Prac. &Rem. Code § 52.006(d) (authorizing appellate review of amount of security); Tex.R.App.P. 24.4 (same).
APPLICABLE LAW
To suspend execution of a judgment while pursuing an appeal, the judgment debtor in a civil case may file, among other things, "a good and sufficient bond." Tex.R.App.P. 24.1(a)(2). The amount of security required to supersede a judgment pending appeal depends on the type of judgment. See id. R. 24.2(a). Under both Section 52.006 and Rule 24, when the judgment is for money, the amount of the security generally must equal the sum of (1) compensatory damages awarded in the judgment, (2) interest for the duration of the appeal, and (3) costs awarded in the judgment. Tex. Civ. Prac. &Rem. Code § 52.006(a); Tex.R.App.P. 24.2(a)(1). But see Tex. Civ. Prac. &Rem. Code § 52.006(b) (stating that amount of security must not exceed less of "50 percent of the judgment debtor's net worth; or [] $25 million"); Tex.R.App.P. 24.2(a)(1)(A), (B) (same).
Even after its plenary power expires, a trial court has continuing jurisdiction to modify the amount and type of security required to suspend enforcement of the judgment if circumstances change. Tex.R.App.P. 24.3(a)(2). On motion of a party, we may review a trial court's supersedeas ruling, applying an abuse of discretion standard. See EnviroPower, L.L.C. v. Bear, Stearns &Co., 265 S.W.3d 1, 2 (Tex. App.-Houston [1st Dist.] 2008, pet. denied); G.M. Houser, Inc. v. Rodgers, 204 S.W.3d 836, 840 (Tex. App.-Dallas 2006, no pet.) ("The appellate court reviews the trial court's determination of the amount of security under an abuse of discretion standard."). In general, 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. Samlowski v. Wooten, 332 S.W.3d 404, 410 (Tex. 2011). However, to the extent the trial court's ruling turns on questions of law, including issues of statutory construction, we review the ruling de novo. Perry Homes v. Cull, 258 S.W.3d 580, 598 (Tex. 2008).
On a party's motion, we may review: (1) the sufficiency of excessiveness of the amount of security, (2) the sureties on a bond, (3) the type of security, (4) the determination of whether to permit suspension of enforcement; and (5) the trial court's exercise of discretion under Rule 24.3(a). Tex. R. App. P 24.4(a). Accordingly, we may require that the bond be increased or decreased and that another bond be provided and approved by the trial-court clerk. Id. R. 24.4(d).
DISCUSSION
In their motion to increase supersedeas bond, both in the trial court and now in this Court, the Hospital Defendants argue that the supersedeas bond filed by appellants is insufficient because it omits prejudgment interest in calculating the "sum of compensatory damages awarded in the judgment." See Tex. Civ. Prac. &Rem. Code 52.006(a); Tex.R.App.P. 24.2(a)(1). Based on controlling precedents from the Texas Supreme Court, we disagree.
The Texas Supreme Court held in In re Nalle Plastics Family Limited Partnership that attorney's fees typically do not qualify as "compensatory damages" for the purpose of superseding enforcement of a judgment under Section 52.006 and Rule 24. 406 S.W.3d 168, 176 (Tex. 2013). In doing so, the supreme court explained that prejudgment interest similarly is not considered damages. Id. at 173. The court stated:
Not every amount, even if compensatory, can be considered damages. Like attorney's fees, court costs make a claimant whole, as does pre-judgment interest. Yet it is clear that neither costs nor interest qualify as compensatory damages.Id.
The following year, the Supreme Court held that "interest for the duration of the appeal," as that phrase is used in the supersedeas statute and rule, does not include interest on attorney's fees "or any other category of a judgment not required to be included in the security amount." In re Corral-Lerma, 451 S.W.3d 385, 387-88 (Tex. 2014). In reaching this conclusion, the supreme court expressly disapproved of this Court's 2010 opinion in Shook v. Walden, 304 S.W.3d 910, 929 (Tex. App.-Austin 2010, no pet.). In Shook, this Court construed Section 52.006 and, more specifically, the supersedeas statute's use of the phrase "compensatory damages awarded in the judgment" and concluded that although the trial court's award of attorney's fees was not an award of "compensatory damages" under Section 52.006(a), 304 S.W.3d at 923, the trial court's award of prejudgment interest was, id. at 929. In addition, this Court concluded that the appellant was required to secure "interest for the duration of the appeal," i.e. postjudgment interest, on the entire judgment and not just on compensatory damages. Id.
Implicit in the Supreme Court's opinion in Corral-Lerma and its disapproval of our opinion in Shook is that an award of prejudgment interest is a "category of a judgment not required to be included in the security amount." See In re Corral-Lerma, 451 S.W.3d at 387-88. In other words, an award of prejudgment interest is not an award of "compensatory damages" or "costs" and, consequently, is not included in calculating the "interest of the duration of the appeal" under Section 52.006(a). See In re Nalle Plastics Family, 406 S.W.3d at 173 (stating that interest does not "qualify as compensatory damages"); see also Top Cat Ready Mix, LLC v. Alliance Trucking, L.P., No. 05-18-00175-CV, 2018 Tex.App. LEXIS 10827, at *3 (Tex. App.-Dallas Dec. 27, 2018, no pet.) (mem. op.) (explaining that supreme court in In re Nalle stated in dicta that prejudgment interest does not qualify as compensatory damages in calculating security); Eagle Oil &Gas Co. v. Shale Expl., LLC, 510 S.W.3d 92, 94 (Tex. App.-Houston [1st Dist.] 2016, no pet.) ("Prejudgment interest is not an award for 'compensatory damages' for purposes of determining supersedeas amount." (citing In re Nalle Plastics Family, 406 S.W.3d at 173)). As a result, we conclude that the trial court did not abuse its discretion by declining to increase appellants' supersedeas bond to include pre-judgment interest.
CONCLUSION
The Hospital Defendants' motion to increase supersedeas bond is denied.
It is ordered.