Court Opinion

ID: 4190390
Source: CourtListenerOpinion
Date Created: 2017-07-28 13:14:23.73967+00
Date Added: 2024-06-11T07:47:25.153870
License: Public Domain

Opinion issued July 27, 2017

                                        In The

                                Court of Appeals
                                       For The

                           First District of Texas
                              ————————————
                                NO. 01-16-00952-CV
                             ———————————
              IN RE MIGUEL ZARAGOZA FUENTES, Relator
                                         and
  IN RE ELSA ESTHER CARRILLO ANCHONDO AND EAGLE RIDGE
                  PROPERTIES, LLC, Relators

           Original Proceedings on Petitions for Writ of Mandamus

                                    OPINION

      In this original proceeding, the relators seek relief from the trial court’s denial

of their requests to enforce a supersedeas bond, which was filed to stay execution of
a divorce decree while that decree is on appeal.1

       The trial court’s divorce decree between Miguel Fuentes and Evangelina

Lopez Guzman Zaragoza awarded Evangelina three residential properties in El Paso,

Texas, in addition to other property and money. Miguel and several third parties

have appealed the decree, and their appeal is pending in our court. See Miguel

Zaragoza Fuentes, et. al. v. Evangelina Lopez Guzman Zaragoza, Case No. 01-16-

00251-CV (Tex. App.—Houston [1st Dist.]). Miguel posted a bond to supersede the

judgment. Before the divorce decree was final and before Miguel posted the bond,

Evangelina filed a copy of the decree in the El Paso County real property records

and took possession of the three properties awarded to her. Her possession of these

properties became the source of the present ancillary dispute.

       Miguel moved the trial court to enforce the supersedeas bond, claiming that

Evangelina’s continued possession of the properties violates the bond. When the trial

court denied that relief, Miguel filed a motion seeking enforcement of the bond and

a petition for a writ of mandamus with this court. Third party appellants Elsa Esther

Carrillo Anchondo and her wholly owned company, Eagle Ridge Properties, LLC,

filed similar requests for relief.

1
       The underlying case is In the Matter of the Marriage of Evangelina Lopez
       Guzman Zaragoza and Miguel Zaragoza Fuentes, et al., cause number 2014–
       30215, pending in the 245th District Court of Harris County, the Honorable
       Roy L. Moore presiding.
                                          2
        Miguel and the Carillo relators request that this court enforce the supersedeas

bond and order that Evangelina (1) withdraw her El Paso County filings and (2)

surrender physical possession of the properties pending appeal. We deny the motions

filed in the appeal as moot and consider the requests as petitions for writ of

mandamus. We conditionally grant the petitions.

                                     Background

        Evangelina petitioned for divorce against Miguel in Harris County, Texas in

May 2014. On December 21, 2015, the trial court signed its final decree of divorce.
2
    Although titled in Eagle Ridge’s name, the trial court’s findings of fact and

conclusions of law in the divorce proceeding attribute ownership of three residential

properties in El Paso County to Miguel. In the decree, the trial court determined that

the El Paso properties were part of Miguel and Evangelina’s marital estate, and it

awarded the properties to Evangelina. The decree states that it may “serve as a

muniment of title to transfer ownership of all property awarded to any party in this

Final Decree of Divorce.”

2
        Evangelina asserts that a final judgment was rendered when the trial court
        orally pronounced judgment at the close of trial on November 5, 2015. As
        explained in our March 14, 2017 order denying Evangelina’s motion to
        dismiss the appeals brought by the Carillo relators and others as intervenors,
        the judgment was not final until the written decree was issued on December
        23, 2015. See Fuentes v. Zaragoza, No. 01-16-00251-CV, 2017 WL 976079,
        at *2 (Tex. App.—Houston [1st Dist.] Mar. 14, 2017, order). We denied
        Evangelina’s subsequent motion for rehearing.
                                           3
      Ownership of the El Paso properties before the decree

      Before the trial court signed the final decree, the Carillo relators and other

third parties petitioned to intervene in the case, claiming that Evangelina was

improperly seeking to have property they owned considered as marital assets to

distribute as marital property in the divorce. See Fuentes v. Zaragoza, 2017 WL

976079, at *1. In particular, they claimed that the El Paso properties are owned by

Eagle Ridge, a company that, in turn, is owned solely by Carillo, and not by Miguel.

They assert that, before the divorce decree was signed, Eagle Ridge was the owner

of record in the El Paso real property records and the properties were occupied by

Carillo and her family.

      Transfer pursuant to the decree

      After the trial court signed the decree, Evangelina filed it with the El Paso

county clerk two days later, on December 23, 2015, claiming it as a muniment of

title for the El Paso properties. Five days later, on December 28, 2015, Evangelina

took physical possession of the properties from Carillo. Evangelina did not obtain a

writ of execution or a writ of forcible entry and detainer before seizing the properties.

      Evangelina’s actions were immediately challenged. On December 30, 2015,

the Carillo relators filed a pleading in the trial court seeking a temporary restraining

order and a temporary injunction for wrongful execution. The Carillo relators

claimed that Evangelina had violated Texas Rule of Civil Procedure 627 by filing

                                           4
the decree in the property records and taking possession of those properties less than

30 days after issuance of the decree. See TEX. R. CIV. P. 627 (providing that

execution on judgment may not issue until “after the expiration of thirty days from

the time a final judgment is signed”).

      The next day, the trial court issued a temporary restraining order, reciting that

“execution has begun to occur within 30 days of the signing of the Final Judgment

without application under TRCP 628.” The following week, the court held a hearing

on the Carillo relators’ wrongful execution claim. It denied their request for a

temporary injunction, explaining that it believed it lacked authority to grant the relief

requested:

      I thought I had made a finding or a statement on the record that whether
      you call it an execution or a [muniment] of title, I do not believe that
      was proper, but I do not believe sitting here in Harris County that I have
      any authority to order people in El Paso County to do anything . . . .
The Carillo relators did not appeal the trial court’s interlocutory order. See TEX. CIV.

PRAC. & REM. CODE § 51.014(a)(4) (authorizing appeal of interlocutory order that

“grants or refuses a temporary injunction”).

      The Carillos relators, however, obtained a temporary restraining order from

the El Paso District Court the next day. That temporary restraining order took the El

Paso properties from Evangelina’s possession. The parties ultimately agreed to place

the properties in the possession of a court-appointed receiver while the case

proceeded in the El Paso court.

                                           5
         Meanwhile, the trial court set the supersedeas bond at $278.3 million, and

Miguel appealed that order. Our court reversed the order and ordered that the bond

be set at $25 million. See Fuentes v. Zaragoza, No. 01-16-00251-CV, 2016 WL

3023811, at *1 (Tex. App.—Houston [1st Dist.] May 26, 2016, order). Miguel

posted a $25 million supersedeas bond with the Harris County District Clerk. A few

months later, the Carillo relators moved to nonsuit their claims in the El Paso District

Court.

         On October 14, 2016, the El Paso court issued an order dismissing the case,

dissolving the receivership, and ordering the receiver to return the keys to the El

Paso Properties to Evangelina. On the same day, the Carillo relators filed a notice of

lis pendens on the El Paso properties.

         Course of proceedings

         The Carillo relators then moved in the trial court for a writ of supersedeas and

accompanying orders that would suspend Evangelina’s enforcement of the divorce

decree while it was pending on appeal. The Carillo relators alleged that Evangelina

violated Rule 627 by filing the decree in the El Paso County real property records

and taking possession of the property before the divorce decree became final. See

TEX. R. CIV. P. 627 (allowing for clerk of court to issue writs of execution “after the

expiration of thirty days from the time a final judgment is signed”). The Carillo

relators further alleged that, even after the supersedeas bond had been issued,

                                             6
“Evangelina was permitted by the 41st District Court of El Paso County to take

possession of Eagle Ridge’s El Paso real properties in reliance on this Court’s Final

Decree.” The Carillo relators argued that, because a supersedeas bond had been filed,

the trial court should “issue a writ of supersedeas to halt Evangelina’s unlawful

execution on the basis of her impermissibly filed muniment of title.”

      Miguel filed a similar motion in the trial court. In it, Miguel expressly

disclaimed ownership of the El Paso properties but explained that he had filed his

motion in case the Carillo relators were found to lack standing to enforce the

supersedeas bond themselves. Miguel’s motion asked the trial court to enforce the

supersedeas bond; issue a writ of supersedeas directing those executing on the

judgment to halt their ongoing execution against the properties; order Evangelina to

withdraw the “muniment of title” from the El Paso County’s real property record;

and order her to cease execution efforts as to the El Paso properties.

      The trial court heard the motions and subsequently issued an order restraining

Evangelina from selling the El Paso Properties “during the pendency of Intervenors’

appeal,” but it denied the motions in all other respects.

                                     Discussion

      Miguel and the Carillo relators seek mandamus relief from the trial court’s

order denying their request for enforcement of the supersedeas bond.

                                           7
I. Standard of review

      To be entitled to mandamus relief, a relator must demonstrate that (1) the trial

court clearly abused its discretion and (2) the relator has no adequate at law, such as

an appeal. See In re Dana Corp., 138 S.W.3d 298, 301 (Tex. 2014) (orig.

proceeding). A relator bears the burden of proving both requirements. See Walker v.

Packer, 827 S.W.2d 833, 840 (Tex. 1992). A trial court abuses its discretion if it

reaches a decision that amounts to a clear and prejudicial error of law or if it clearly

fails to analyze the law correctly or apply the law correctly to the facts. In re

Cerberus Capital Mgmt. L.P., 164 S.W.3d 379, 382 (Tex. 2005).

II. Analysis

      The petitions in these cases request similar relief arising from Miguel’s

posting of a supersedeas bond: that we direct the trial court to issue an order

“suspending all of Ms. Zaragoza’s enforcement efforts—including her muniment of

title and ongoing possession of the El Paso Properties—and . . . restor[ing] the

properties to Eagle Ridge and Ms. Carrillo for the duration of the appeal.”3 Miguel

3
      Miguel also requests a temporary order precluding Evangelina “from
      attempting to sell, transfer, or otherwise dispose of the El Paso Properties
      pending the Court’s resolution on this matter.” This request is moot because
      the trial court ordered that the El Paso properties not be sold during the
      pendency of the Carillo relators’ appeals. Although Miguel notes that
      Evangelina moved to dismiss the Carillo relators’ appeals and could seek to
      sell the properties if the appeals are dismissed, our court denied the motion to
      dismiss as well as Evangelina’s subsequent motion for rehearing. See Fuentes
      v. Zaragoza, 2017 WL 976079, at *3.
                                           8
further requests that we direct the trial court to “halt Evangelina’s unlawful

execution on the basis of her impermissibly-filed muniments of title to the El Paso

properties.” Evangelina responds that (1) res judicata bars the relief sought in the

petitions; and (2) Miguel’s posting of a supersedeas bond has no effect on the El

Paso properties because she had completed her execution on these properties before

Miguel posted the bond.

      We first address Evangelina’s res judicata claim. Concluding that res judicata

does not apply, we then turn to whether the subsequent posting of the supersedeas

bond applies to suspend Evangelina’s execution upon the properties that occurred

before Miguel posted the bond.

          A. Res judicata does not bar enforcement of the bond.

      As an initial matter, Evangelina contends that res judicata bars Miguel and the

Carillo relators’ requests because they rest upon claims of wrongful execution that

the trial court rejected when it denied the Carillo relators’ request for a temporary

injunction staying execution of the decree.

      For res judicata to apply, there must be: (1) an earlier final judgment on the

merits by a court of competent jurisdiction; (2) identity of the parties; and (3) a

second action based on the same claims that were raised or could have been raised

in the first action. See Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex.

1996). This case lacks the first element. Specifically, the trial court did not address

                                          9
the merits of the Carillo relators’ wrongful execution claims; rather, the court denied

an interlocutory request for a temporary injunction because it believed it lacked

jurisdiction to grant relief:

       THE COURT: I thought I had made a finding or a statement on the
       record that whether you call it an execution or a muniment of title, I do
       not believe that was proper, but I do not believe sitting here in Harris
       County that I have any authority to order people in El Paso County to
       do anything . . . .

Because the trial court did not resolve the merits of the Carillo relators’ claim for

wrongful execution, res judicata does not apply. See Li v. Univ. of Tex. Health Sci.

Ctr. at Houston, 01-00-01135-CV, 2002 WL 992400, at *3 (Tex. App.—Houston

[1st Dist.] May 16, 2002, pet. denied) (“Because a dismissal for lack of jurisdiction

is not a ruling on the merits, it cannot constitute a res judicata bar.”). Moreover, the

trial court’s order denying relief was not a final judgment. See Amstadt, 919 S.W.2d

at 652. “Texas law is clear that, generally, a trial court’s ruling on a temporary

injunction (or other interlocutory judgment) does not support the defense of res

judicata.” Glattly v. Air Starter Components, Inc., 332 S.W.3d 620, 637 (Tex.

App.—Houston [1st Dist.] 2010, pet. denied).

       Accordingly, res judicata does not bar the claims in these proceedings.

          B. The supersedeas bond requires that possession and title remain as
             they were before the decree.

       When Evangelina filed the decree in the El Paso real property records and

took possession of the three disputed properties in December 2015, the divorce

                                          10
decree was not final and had not been superseded. Evangelina contends, however,

that she “completed” execution on the properties before Miguel posted his

supersedeas bond in June 2016, and thus Miguel’s subsequent posting of the bond

“ha[d] absolutely no effect on the El Paso properties . . . .” Miguel and the Carillo

relators reply that Evangelina did not lawfully execute on the decree. They further

reply that accepting Evangelina’s contention that her execution was “completed”

and unaffected by the posted bond would encourage judgment creditors to

immediately execute on judgments that had not become final in a race to execute

before the filing of a supersedeas bond.

      Contrary to Evangelina’s contention, she did not complete execution on the

disputed properties. She never as much as obtained a writ of execution in connection

with seizing possession of them. Rather, she filed the decree with the real property

records before it became final and took possession of the properties without aid of a

writ of execution. Because Evangelina did not complete a lawful execution on any

of the three properties before the bond was posted, Evagelina’s premise that the

supersedeas bond does not affect her imposition of a muniment of title and

possession of the properties lacks merit. Her continuing attempts to enforce the

judgment became subject to Miguel’s supersedeas bond. See Alpert v. Riley, 274

S.W.3d 277, 297–98 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) (“[A

supersedeas bond] preserves ‘the status quo of the matters in litigation as they

                                           11
existed before the issuance of the order or judgment from which an appeal is

taken.’”) (quoting In re Tarrant Cnty., 16 S.W.3d 914, 918 (Tex. App.—Fort Worth

2000, orig. proceeding)); In re City of Cresson, 245 S.W.3d 72, 74 (Tex. App.—Fort

Worth 2008, orig. proceeding) (“Supersedeas preserves the status quo of the matters

in litigation as they existed before the issuance of the order or judgment from which

an appeal is taken.”).

      We are unpersuaded by Evangelina’s reliance on Texas Employers’ Insurance

Association v. Engelke, 790 S.W.2d 93 (Tex. App.—Houston [1st Dist.] 1990, no

writ). Engelke involved “fixed rights” established by a valid writ of execution issued

by the trial court and executed upon by the sheriff before the bond was filed—two

conditions not present in this case. See id. at 95. Contrary to Miguel and the Carillo

relators’ position in this case, the relator in Engelke “d[id] not challenge the validity

of either the judgment execution or the levy thereunder.” Id. Evangelina attempted

execution on the decree by filing it as a muniment of title before it had become a

final judgment and obtained possession of the properties before enforcement was

permitted. See TEX. R. CIV. P. 627.

      Evangelina also contends that Texas Rule of Civil Procedure 634 supports her

position that her efforts at execution on the El Paso properties are not subject to the

supersedeas bond, relying on the following language:

             The clerk or justice of the peace shall immediately issue a writ
             of supersedeas suspending all further proceedings under any
                                           12
             execution previously issued when a supersedeas bond is
             afterward filed and approved within the time prescribed by law
             or these rules.

TEX. R. CIV. P. 634 (emphasis added). Focusing on Rule 634’s use of the words

“further proceedings,” Evangelina asserts that “the filing of a supersedeas bond

prevents the further taking of any step under the judgment, and does not work

backward[].”

      Evangelina’s interpretation ignores Texas Rule of Appellate Procedure

24.1(f), which provides that enforcement efforts begun before the judgment was

superseded must stop when a judgment has been superseded:

             Effect of Supersedeas. Enforcement of a judgment must be
             suspended if the judgment is superseded. Enforcement begun
             before the judgment is superseded must cease when the judgment
             is superseded. If execution has been issued, the clerk will
             promptly issue a writ of supersedeas.

TEX. R. APP. P. 24.1(f). The purpose of restoring the status quo that existed prior to

the superseded judgment would be defeated if judgment creditors were allowed to

persist with execution on judgments begun before the bond was filed. Accordingly,

we hold that the supersedeas bond requires Evangelina to desist enforcement efforts

with respect to the El Paso properties.

         C. The bond requires removal of the muniment of title and return of
            possession.

      Miguel and the Carillo relators argue that the trial court erred in denying relief

because the supersedeas bond requires Evangelina to remove the muniment of title

                                          13
and return possession of the El Paso properties to the Carillo relators. Evangelina

does not dispute that her claim to legal title to the El Paso properties stems solely

from her filing of the decree as a muniment of title in the El Paso County real

property records. Nor does she dispute that Eagle Ridge was the record owner of

these properties before she filed the decree. Thus, the status quo before the trial court

signed the decree was that Eagle Ridge owned and held possession of the properties.

See City of Cresson, 245 S.W.3d at 74 (“For injunctive purposes, the [s]tatus quo is

defined as ‘the last, actual, peaceable, noncontested status which preceded the

pending controversy.’”) (quoting Fox v. Tropical Warehouses, Inc., 121 S.W.3d

853, 857 (Tex. App.—Fort Worth 2003, no pet.). Because the posting of a

supersedeas bond preserves the status quo prior to the judgment, posting of the bond

requires removal of the muniment of title and return of possession of the El Paso

Properties to the Carillo relators. We therefore conditionally grant the petition

compelling the trial court to require Evangelina to remove the decree as a muniment

of title and return physical possession of the properties to the Carillo relators. We

leave undisturbed the trial court’s other orders enjoining the sale or encumbrance of

the properties pending appeal. See TEX. R. APP. P. 24.1(e) (“The trial court may make

any order necessary to adequately protect the judgment creditor against loss or

damage that the appeal might cause.”).

                                           14
      Miguel and the Carillo relators also request that we order the trial court to

issue a writ of supersedeas. The applicable rules, however, mandate issuance of a

writ of supersedeas when a writ of execution has issued. See TEX. R. APP. P. 24.1(f)

(“If execution has been issued, the clerk will promptly issue a writ of supersedeas.”);

TEX. R. CIV. P. 634 (“The clerk or justice of the peace shall immediately issue a writ

of supersedeas suspending all further proceedings under any execution previously

issued when a supersedeas bond is afterward filed and approved within the time

prescribed by law or these rules.”). In contrast to the rules’ mandatory language

requiring issuance of a writ of supersedeas by a clerk, section 24.011 of the Texas

Government Code gives the trial court discretion to issue a writ of supersedeas:

              WRIT POWER. A judge of a district court may, either in term
              time or vacation, grant writs of mandamus, injunction,
              sequestration, attachment, garnishment, certiorari, and
              supersedeas and all other writs necessary to the enforcement of
              the court’s jurisdiction.

TEX. GOV’T. CODE § 24.011.

      Although the trial court has discretion in issuing a writ of supersedeas when a

writ of execution has not issued, we need not determine whether refusing to issue

the writ was an abuse of discretion in this case because we have conditionally

granted relators’ request to compel orders requiring removal of the muniment of title

and return of possession. Absent a failure to comply with these orders, enforcement

                                          15
of the supersedeas bond does not require compelling the additional issuance of a writ

of supersedeas.

       D. Adequate Remedy by Appeal

      Finally, to be entitled to mandamus relief, relators must demonstrate that they

lack an adequate remedy by appeal. The Carillo relators satisfy this requirement

because their underlying appeal cannot remedy being dispossessed of the El Paso

properties during the appeal. Although Miguel disavows ownership of the El Paso

properties, he also lacks an adequate remedy by appeal because his posted

supersedeas bond stays enforcement of the decree and a violation of the stay cannot

be remedied by appeal. See Isern v. Ninth Court of Appeals, 925 S.W.2d 604, 606

(Tex. 1996) (“The threat of execution on the judgment is a situation of manifest and

urgent necessity which renders any remedy by appeal inadequate.”) (citing Walker

v. Packer, 827 S.W.2d 833, 840-43 (Tex. 1992)).

                                         16
                                     Conclusion

      For the forgoing reasons, we conditionally grant the petitions for writ of

mandamus and direct the trial court to issue orders compelling Evangelina to remove

the decree from the El Paso real property records as a muniment of title and return

possession of the El Paso properties to the Carillo relators. We are confident that the

trial court will promptly comply, and our writ will issue only if it does not.

      Because we order the removal of the decree as a muniment of title and the

return of possession of the properties, we deny the further request for orders

requiring the trial court to issue a writ of supersedeas.

                                                Jane Bland
                                                Justice

Panel consists of Chief Justice Radack and Justices Higley and Bland.

                                           17