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Abdullatif v. Choudhri

Court of Appeals of Texas, Fourteenth District

June 8, 2017

OSAMA ABDULLATIF AND ALI MOKARAM, Appellants
v.
ALI CHOUDHRI, Appellee

         On Appeal from the 190th District Court Harris County, Texas Trial Court Cause No. 2012-27197

          Panel consists of Chief Justice Frost and Justices Busby and Wise.

          OPINION ON MOTIONS FOR REVI EW OF SUPERSEDEAS ORDER

          J. Brett Busby Justice

         The judgment on appeal awards appellee Ali Choudhri damages and attorneys' fees and declares the parties' respective ownership interests in two business entities. The trial court permitted appellants Osama Abdullatif and Ali Mokaram to supersede the judgment with a cash deposit equal to the amount of damages plus applicable interest; the court also prohibited certain activities by the business entities as further security for Choudhri pending appeal ("the Supersedeas Order").

         Choudhri has filed a motion and supplemental motion for review of the Supersedeas Order, asserting it does not provide sufficient security for the declaratory portion of the judgment or adequately protect him from loss or damage on appeal. For the reasons discussed below, we grant Choudhri's motions and remand the Supersedeas Order for the trial court to take evidence and make findings of fact regarding the amount and type of security appellants must post to supersede the declaratory portion of the judgment, including the value of the ownership interests recovered by Choudhri on the date of judgment. See Tex. R. App. P. 24.2(a)(2)(B), 24.4(d).

         Background

         This appeal arises from litigation concerning ownership interests in a partnership, Mokaram Latif West Loop, Ltd. ("ML Partnership"), and a limited liability company that is ML Partnership's general partner, Mokaram Latif General, LLC ("ML General") (collectively "the Entities"). The case below is proceeding in two phases. The judgment on appeal is the Phase 1 judgment, which, among other things, awards Choudhri $50, 000 in damages plus interest and attorneys' fees and declares the parties' respective ownership interests in the Entities. In particular, the non-monetary portion of the judgment declares the dates on which Choudhri obtained certain percentages of ownership in the Entities, and it declares that an assignment of ownership interests to him is "valid and enforceable."

         On appellants' motion to set security, the trial court signed the Supersedeas Order. Citing Texas Rule of Appellate Procedure 24.2(a)(1) and (a)(3), which we discuss below, the order allows appellants to suspend enforcement of the Phase 1 judgment by filing a bond or making a cash deposit of $62, 700.25. The Supersedeas Order also states:

As further security to protect Choudhri against any loss or damage that the appeal may cause with respect to the Court's declaration of rights in the Final Judgment, until final disposition of the appeal of the Final Judgment or further Order of this Court, Part II of the Court's order of December 5, 2012 [prohibiting the Entities from taking certain actions and requiring other actions] shall remain in force and effect.

         Choudhri filed a motion and supplemental motion in this court for review of the Supersedeas Order. See Tex. R. App. P. 24.4(a). He asserts the trial court abused its discretion in not requiring any security to suspend the enforcement of the portion of the judgment declaring his ownership interest in the Entities ("the Declarations"). See Tex. R. App. P. 24.2(a)(2) (governing supersedeas of judgments for recovery of an interest in real or personal property). He also asserts the trial court abused its discretion in denying him post-judgment discovery in connection with his supersedeas challenge. See Tex. R. Civ. P. 621a (authorizing post-judgment discovery to obtain information relevant to a motion under Texas Rule of Appellate Procedure 24). He does not complain about the type or amount of security the trial court set for the monetary portion of the judgment. See Tex. R. App. P. 24.2(a)(1).

         In response, appellants first assert they are not required to supersede the Declarations because declaratory judgments are suspended automatically when an appeal is perfected. Alternatively, appellants contend supersedeas of the Declarations is governed by Rule 24.2(a)(3), not Rule 24.2(a)(2), because the Declarations are "for something other than money or an interest in property." Tex.R.App.P. 24.2(a)(3). They assert the restrictions in the December 5, 2012 order referenced in the Supersedeas Order sufficiently protect Choudhri from loss or damage on appeal.

         Analysis

         I. Legal standards

         We review the trial court's supersedeas ruling for an abuse of discretion. 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). To the extent the ruling turns on a question of law, our review is de novo. Mansik & Young Plaza LLC v. K-Town Mgmt., LLC, 470 S.W.3d 840, 841 (Tex. App.-Dallas 2015, op. on motion), disp. on merits, No. 05-15-00353-CV, 2016 WL 4306900 (Tex. App.-Dallas Aug. 15, 2016, no pet.) (mem. op.).

         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. ...


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