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### MEMORANDUM OPI NIO N No. 04-09-00573- CV OR IXCA P ITA L M AR KETS, LLC , et al. ,

Ap pe lla nts
v . LA VILLIT A MOTOR INNS, J.V. , et al. ,

Appellee s F ro m th e 15 0th

Judic ia l D ist

ri c t Co ur t, B e xar County , T e xas Trial Court No. 2009-CI -07339 Honora ble Ba rbar a Ha nson Nellermoe , J udg e Presiding Opinion by : Kar en Ang elini , J ustice Sitt ing: Kar en Ang elini , J ustice

Sandee B ry an Mar ion , J ustice Phy lis J . Speedlin , J ustice Deliver ed and F iled: J anuar y 27, 2010 MOTI ON GRANTE D OPI NI ON ON A PPEL L ANTS’ MOTI ON TO REVI EW S UPERSEDEAS BOND B e fo re us is a mot ion to re vie w su pe rs e de a s bo nd fi le d by a

pp e lla nts Or ix C a

pit a l Ma rk e ts, L L C; Bank of

Americ a, N.A.; L

NR Partners, Inc.; Capmark F in an ce , I n c.; Nicholas M. Py ka as Trustee ; Michael N. B lue as Tr uste e, an d Greta E. Goldsby as Trustee (re fer

red to c ollectively

as “Or ix and Capmar

k”). O rix and Capmar

k appea l from a judg ment enjoining them from for eclosing04
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- 2- on a hotel and gra

nting declar atory relief

to the hotel’s owner s. I n their motion, Orix and Capmar k argue the tria l court had no discretion to deny their request to set a bond amount to suspend the e ntire judgme nt. For the following rea sons, we gra nt the m otion and rema

nd to the trial court f

or taking of
e vid e nc e and , if

ne c e ssa ry , th e se tti ngof

an a dd iti on a l bo nd

a mou nt. B ACKG ROUND The a ppellees in this case , L a Villita Motor I nns, J
. V. ; Ex ecutive Mote ls of San Antonio, I nc.; and S.A. Sunvest Hotels, I nc. (“ L a Villita”); own a nd operate t he R iverwa lk Plaza Hotel in San An ton io, Te xas. I n Se pte mbe r 1 99 8, L a Vi lli ta bo rr ow e d $ 8. 4 mi lli on fr om A mr e sc o Ca pit a l, L .P.
and sig ne d a no te fo r t

hat amou nt. L a Vi ll ita

a lso sig ne d a

mor tg a g e , d e e d o f t

ru st, and se c ur ity
a g re e me nt, wh ic h liste d th e ho te l and oth e r L a Vi lli ta a sse ts a s c oll a te ra l. L a

Vi lli ta ma de its mon thl y pay ments until a larg e balloon pay ment ca m e d u e in late 2008. When the pay ment was not made , Orix sent noti ce to L a Villita claiming to be t h e “s p ec i al s ervic er” on the note and de manded i m m e d i a t e p ay

m e n to f o v e r $ 6 m i l l i o n i np r i n c i p a l an d i n t e r e s t . O r i x t h e nt r i e d

t o f o r e c l o s e , a n d

La Villita filed suit to stop the fore closure. T he trial c ourt g rante d a tempora ry restra ining or der a

nd a te mpo ra ry inj un c tio n to pr e ve nt the fo re c los ur e . O ri x the n f ile d a c ounte rc la im a g a ins t L a

Vi lli ta to enfor ce the note. Following a benc h trial, the trial cour t signe d a judgme nt de clar ing Orix wa s not the rig htful ho lde r o f the no te and

pe rm ane ntl y

e njo ine d O ri x fr om f

or e c los ingon

the ho te l. T he jud g me nt a lso de c lare d th e c ur

re nt p ri nc ipa l ba l a

n c e o n t h e no te a s $ 6, 05 2, 06 6. 52 and e njo ine d th e oth e r d e fe nd a nts fr om f or e c los ingon

the pr op e rt

y , if a t a ll , for

e ig hte e n mo nth s f

ro m th e date of

the jud g me nt. Additionally , the judg ment g ave L a Villita eig hteen months to either pay the amount owed on the04
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- 3- note or re financ e the note. F inally , the j udg ment order ed Orix to pay L a Villita attorney ’s fe es in the amount of $110,431.00. Orix and Capmark appe aled the judg ment. Orix filed a superse deas bond in the amount of $118,713.33. On Octobe r 22, 2009, L a Vi l l i t a filed a motion to enforce the judg ment, seekingan orde r compelli n g Or i x and C apmar k to: (1) identify

the holder of

the note; (2) c ompel the holder of the note to acc ept the tende r made by L a Villita; (3) compe l the holder to rele ase the note, the dee d of trust, and all g uara

nty ag ree ments and any

other liens and ob ligations associated with the loan do c ume nts . A c c or din g to t he mot ion , L a

Vi lli ta ha d a tte mpt e d to pa y of f t he no te in a c c or da

nc e wi th the judg ment, but the pay ment was re fused. O n N o v e mb e r 5 , 2 0 0 9 , t h e t r i a l c o u rt h e l d a h e ar i n g o n t h e e n f o r c e m e n t m o t i o n . I n i t i a l l y, Orix and Ca p ma r k ar g u e d th e s u p e r s e d e a s b o n d

in p la c e w a s s u f

f ic ie n t t o s u

p e r s e d e th e e n ti re judgme nt. After the trial court de termined the supe rsede as bond did not operate to supersede the enti re judgme nt, Orix and Capmar k asked the trial court to set a n additional bond amount so they could superse de the e ntire judg ment. The trial co u rt ref used the re quest to set an additional bond
a mou nt. The trial c ourt g rante d the motion to enforce judgme nt and orde red Capma rk and the other de fe nd ants to r e le a se any

and a ll lie ns the y may ho ld und e r t he te rm s o f a

ny loa n d oc ume nts in t

his
ma tte r, inc lud ingthe re le a se of any lie ns un de r a

ny de e d o f t

ru st, UC C f

ili ng s, and

g ua ra nty ag ree ments which ar ise under or aff ect the r eal pr operty

in question.04
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- 4- On Novembe r 10, 2009, Orix and Capmark filed the instant motion t o revie w superse deas bond in this court. The motion asks us to vacate t he trial c ourt’s Nove mber 5, 2009, orde r enf orcing the judg ment and, should additional secur ity be require d to a dequate ly protec t L a Villita, to allow an additional twenty

day s for the f

iling of a g ood and suff

icient bond. W e s tay ed the tria l court’s No ve mbe r 5 , 200 9, e nf

or c e me nt or de r. Th e re a ft e r, L a Vi lli ta fi le d a re sp on se to t he mot ion , a

nd Or ix
an d C a p m ar k f i l e d a r e p l y. S UP E RS E DE AS Unless the law or

the rules of

appellate proce dure pr ovide otherw ise, a judg ment may be superse ded and e nforc ement of the judgme nt suspended pendingappea l. T EX . R. A PP . P. 2 4.1(a)
. Supersede as pre serve s the status quo of the matters in liti g ation as they exis ted bef

ore the issuance of the judg ment from which a n appea l is taken. Smith v. Texas Farme rs Ins. Co. , 82 S.W .3d 580, 585 (Tex. App.—San Antonio 2002, pet. denied)
. Texas Rule of Appellate Proc edure 2 4
. 1 s et s out the require ments for suspending enfor ceme nt of a judgme nt pending appea l in civil case s. T EX . R. A PP . P. 24.1. A judg ment debtor may superse de the judg ment by filing w ith the trial court a g ood and suff

icient bond. T EX . R. A PP . P. 24.1(a) (2). A supersede as bond must be in t he amount re quired by Rule 24.2 of the Te x as Rules of Appe llate Proce dure. T EX . R. A PP . P. 24.1(b)( 1)(A) . Under Ru l e 2 4
. 2 , t h e amount of the bond depends on the ty

pe of judg ment. T EX . R. A PP . P. 24.2(a)
. When the judgme nt is for the re cover y of money , the amount of the bond must equa l the sum of compen s at o ry d am ages awar ded in the judgme nt, interest for the estimated duration of the a ppeal, a nd costs awa

rded in the judg ment. T EX . R. A PP . P. 24.2(a) (1). When the judg ment is for the re cover y of an inter est in rea l or persona l04
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- 5- pr op e rt y , th e tr ia l c ourt

wi ll d e te rm ine the ty

pe of se c ur ity that the jud g me nt d e bto r m us t po st. T EX . R. A PP . P. 24 .2 (a )2 ). Whe n th e jud g me nt i s f or so met hi ng oth e r t

ha n mo ne y or an in te re st i n pr op e rt y , th e tr ia l c ourt

mus t se t th e a mou

nt an d ty pe of se c ur ity that th e jud g me nt d e bto r m us t po st. T EX . R. A PP . P. 24.2(a) (3). Rule 24.4 authorizes an appellate court to e ng ag e in a limit ed superse deas revie w. On any party ’s motion, we may

revie w: (1) the suf

ficienc y or excessiveness of the amount of secur ity ; (2) the sureties on a

bond; (3) the ty

pe of secur ity ; (4) the deter mination whether to permit suspension of enf orce ment; and (5) the trial court’ s exercise of disc retion in order ing the amount and ty pe of
secur ity . T EX . R. A PP . P. 24.4(a) . We may require that the amount o f a b o n d b e incr ease d or decr ease d, and that anothe r bond be pr ovided and approve d by the t rial cour t clerk. T EX . R. A PP . P. 2 4
. 4 (d ). W e m ay

al s o re qu i re o t h er

ch an ges i nt h e t ri al co u rt o rd er , an d re m an d fo r e n t ry o f f i n d i n gs of fa ct or for

the taking of evide nce. Id . We reviewthe suffic ien cy of a supe rsede as bond for an abuse of discre tion. Tra ns Am e ric an Natural Ga s Corp . v . F ink e lst e in , 9 0 5 S. W. 2 d

4 1 2 , 4 1 4 ( T e x. App.—San Antonio 1995, writ dism’d). D I S CUS S I ON He re , Or ix a

nd Ca pma rk argue the tr ia l c ou

rt a bu se d it s d isc re tio n b y

re fu sin g the ir

re qu e st to s e t a bo nd to s up e rs e de the e nti re jud g me nt. B e c a us e th e ju dg me nt i n th is c a se is p ri mari ly decla ratory in nature, it is g overne d b y Texas Rule of Appellate Proc edure 24.2(a) (3), whic h pr ov ide s: When the judgme nt is for something othe r t han money or an interest in property , the tr ia l c ourt mus t se t th e a mou

nt a nd ty pe of se c urit y that

the jud g me nt d e bto r m

us t p o st. T h e security

must adequate ly

protec t the judgme nt cre ditor ag ainst loss or04
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- 6- damag e that the a

ppeal mig ht cause . But the tria l court may d ec l i n e t o permit the judgme nt to be superse ded if the judg ment cre ditor posts security order ed by the trial court in an a

mount and ty

pe that will secur e the judg ment debtor a g ainst any loss or damag e ca

used by the re lief g rante d the judg ment cre ditor if an a p p el l ate court deter mines, on final disposition, t hat re lief wa s improper. T EX . R. A PP . P. 24.2(a) (3). Rule 24.2(a) (3) doe s not aff ord t he trial court any discretion in setting the amount and ty pe of se c ur i t y t h a t t h e j u d g m e n t d e b t o r m u s t p o s t , u n l e s s t h e j u d g m e n t c r e d i t o r p o s t s s e c u r i t y to superse de the judgme nt debtor’s right to super sedea s. See id
. Her e, the re cord shows the judgme nt
c re dit or in t his c a se , L a

Vi lli ta , d id n ot p os t any se c ur ity . Thu s, the tr ia l court ha d n o d isc re tio n to decline to allow t he judgment t o be superseded. W hen Orix and C apmar k asked the trial court to set an amount to superse de the e ntire judg ment, the trial cour t was re quired to do so. L a Villita argues the trial c ourt did not abuse its discretion in re fusing to set the amount of
secur ity beca use Orix and Capmark f

ailed to make the ir reque st in a written motion. We find nothing in Rule 24 requiring that a re quest to set the amoun t o f secur ity be made in a written motion. Ad d i t i o n al l y , t h e r ec o rd s h o ws L a Vi l l i t a di d n o t o b j ec t t o t h e la ck o f a wri t t en m o t i o n at t h e h ea ri n g. T h e c a s e b e f

o r e u s is s im il ar

to Del hi G as Pi pe lin e Cor

p. v . H as se ll , which involved a ju d g me n t f

o r c o mp e n s a to r

y d a ma g e s , a tt o r

n e y ’ s f e e s , in te r e s t, an d

d e c la r a to r y r e li e f
. 7 3 0 S.W .2d 159, 161 (Tex. App.—Ty ler 1987, orig . proce eding ). In Delhi , the judg ment debtor filed a bond for the full amount of the c ompensatory damag es, attorne y ’s fe es, and inter est, but did not file a bond to cover the dec laratory

relief
. Id
. at 160. There , the appellate court c oncluded the e ntire judg ment was super seded by the bond, but it deter mined the amount of t he bond wa s manifestly insufficient to protect the judg ment cre ditor’s rig hts should the judg ment be af firmed on a

ppeal. Id
. a t1 6 1
. In04
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- 7- Delhi , the appe llate cour

t determined the question raised by the record was a matter of suffic iency of the bond, ra

ther than its validity , and conclude d the trial court c ould not procee d to enforc e the judgme nt. Id . Moreove r, the a ppellate c ourt indicated the judgme nt debtor’s failure to ask the trial judge to set the amount of t he super sedea s bond to cover the decla ratory judgme nt did not render the bond ineffe ctive. Id
. Her e, as in Delhi , a

su pe rs e de a s b on d w a s f

ile d f or th e mon e tary

po rt ion of the jud g me nt. And, as in Delhi , th e iss ue is n ot a qu e sti on of th e val id it y

of the bo nd , b ut i ts s uf

fi c ie nc y to
a de qu a te ly

pr ote c t L a

Vi lli ta a g a ins t any

los s o r d a ma g e that mi g ht b e c a us e d b y the a pp e a l. C ONCL US I ON On the re cord be fore us, we c onclude the trial court abused its discr etion in de ny ing O rix ’s
and Ca pma rk ’s re qu e st to se t the a mou nt o f s e c ur ity

un de r R ule 24 .2 (a )( 3) . T he re lie f r e qu e ste d in the motion to review super sedea s bond is g rante d as follows. We vacate t he trial court’s Novembe r 5, 20 09 , e nf

or c e me nt o rd e r. B e c a

us e the re c or d doe s not sho w the a mou nt o f a dd iti on a l se c ur ity , if any , that would adequa

tely protec t L a Villita, we r emand to the tria l court for the taking of evide nce
an d t h e s e t t i n g o f

t h e a m o u n to f

a d d i t i o n a l s e c u r i t y i f

n e c e s s ar y. Kar en Ang elini , J ustice