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Emf Swiss Avenue, LLC v. Peak's Addition Home Owner's Association

Court of Appeals of Texas, Fifth District, Dallas

November 7, 2017

EMF SWISS AVENUE, LLC, Appellant
v.
PEAK'S ADDITION HOME OWNER'S ASSOCIATION, CITY OF DALLAS AND BOARD OF ADJUSTMENT FOR THE CITY OF DALLAS, Appellee

         On Appeal from the 134th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-17-02532

          Before Chief Justice Wright and Justices Francis and Stoddart

          MEMORANDUM OPINION

          CAROLYN WRIGHT, CHIEF JUSTICE.

         Before the Court is appellant EMF Swiss Avenue, LLC's ("EMF") amended emergency motion for review of the trial court's denial of EMF's motion to set supersedeas security. The underlying proceeding involved appellee Peak's Addition Homeowner's Association's ("HOA") appeal of the Dallas Board of Adjustment's determination that a building permit was properly issued for construction on property owned by EMF. The judgment at issue is declaratory in nature. Specifically, the judgment grants summary judgment for the HOA and reverses the Dallas Board of Adjustment's decision upholding the building official's decision to issue a building permit. The issue before us is whether that judgment constitutes a judgment for something other than money or an interest in real property such that the trial court was required to set security pursuant to rule of appellate procedure 24.2(a)(3). We agree with EMF that rule 24.2(a)(3) applies to this judgment and required the trial court to set security in accordance with that rule. We grant the motion and remand the issue of security to the trial court for hearing and issuance of a written order setting security within the parameters of rule 24.2(a)(3).

         Background

         EMF is a developer in the process of constructing a five-story, 253-unit multifamily development on a property in Dallas. The construction was approved through the City of Dallas permitting process. EMF began work and, after more than one year of work on the project, EMF has spent more than $13 million on construction. The HOA challenged the issuance of the permits through the City of Dallas administrative process because the permits do not require EMF to conform to a Dallas ordinance limiting building to two stories (26 feet) in height. The HOA appealed the issuance of the permits to the Dallas Board of Adjustment, and the Board upheld the Director's decision. The HOA then appealed to the district court, with the City and the Board as respondents/defendants. EMF intervened.

         The trial court granted the HOA's motion for summary judgment and entered a judgment that reversed the Board's decision. The September 11, 2017 judgment states that "the decision of the Dallas Board of Adjustment upholding the interpretation of the building official is Reversed." (emphasis in original). On September 14, 2017, the City issued a "Stop Work" order to halt all construction on the project. EMF filed an emergency motion to stay enforcement of the judgment, which the trial court denied. EMF then appealed the judgment and filed a motion to determine supersedeas security in the trial court. The trial court denied the motion to determine supersedeas security without explanation.

         EMF now seeks this Court's review of the denial of supersedeas under Rule 24.4 and argues that the trial court was required under Rule 24.2(a)(3) to either set the amount and type of security required to suspend enforcement or order the amount and type of security required for the HOA to post to prevent suspension of enforcement of the judgment. Following this Court's request, the HOA, the City of Dallas, and the Board of Adjustment filed responses to the motion, and EMF filed a reply brief The HOA maintains that the judgment may not be superseded because it is not subject to execution, is not a judgment "for something" as required by the rules, and, as such, EMF is not a judgment debtor The City and the Board do not affirmatively state that the trial court abused its discretion They do, however, concur in EMF's contention that all civil judgments can be superseded unless excepted by statute and that Chapter 211 of the Texas Local Government Code does not preclude a court from setting a bond.

         Applicable Law

         Unless the law or the rules of appellate procedure provide otherwise, a judgment may be superseded and enforcement of the judgment suspended pending appeal. Tex.R.App.P. 24.1(a). The purpose of supersedeas is to preserve the status quo of the matters in litigation as they existed before the issuance of the judgment from which an appeal is taken. Devine v. Devine, No. 07-15-00126-CV, 2015 WL 2437949, at *2 (Tex. App.-Amarillo May 20, 2015, no pet.) (citing Smith v. Tex. Farmers Ins. Co., 82 S.W.3d 580, 585 (Tex. App.-San Antonio 2002, pet. denied)). Rule 24.1 sets out the requirements for suspending enforcement of a judgment pending appeal in civil cases. Tex.R.App.P. 24.1. A supersedeas bond must be in the amount required by rule 24.2. Tex.R.App.P. 24.1(b)(1)(A). Under Rule 24.2, the amount of the bond depends on the type of judgment. Tex.R.App.P. 24.2(a). When the judgment is "for something other than money or an interest in real property, " the security must adequately protect the judgment creditor against loss or damage that the appeal might cause. Tex.R.App.P. 24.2(a)(3).

         If rule 24.2(a)(3) applies, the trial court may decline to permit the judgment to be superseded only if the judgment creditor posts security ordered in an amount and type that will secure the judgment debtor against any loss or damage caused by the relief granted the judgment creditor if the appellate court reverses. Tex.R.App.P. 24.2(a)(3); Klein Ind. Sch. Dist. v. Fourteenth Court of Appeals, 720 S.W.2d 87, 88 (Tex. 1986). Rule 24.2(a)(3) is routinely applied to judgments that are declaratory or injunctive in nature. E.g., In re State Bd. for Educator Certification, 452 S.W.3d 802, 803 (Tex. 2014) (Rule 24.2(a)(3) applied to permanent injunction prohibiting Board from revoking or treating as revoked teacher's certification); El Caballero Ranch, Inc. v. Grace River Ranch, L.L.C., No. 04-16-00298-CV, 2016 WL 4444400, at *5 (Tex. App.-San Antonio Aug. 24, 2016, no pet.) (Rule 24.2(a)(3) applied to final judgment declaring a valid, express easement); Orix Capital Markets, LLC v. La Villita Motor Inns, No. 04-09-00573-CV, 2010 WL 307885, at *1 (Tex. App.-San Antonio Jan. 27, 2010, pet. denied) (Rule 24.2(a)(3) applied to judgment that is primarily declaratory in nature); Klein, 720 S.W.2d at 88 (stating because disputed portion of judgment is injunction, judgment debtor's entitlement to supersedeas is controlled by subsection pertaining to "other" judgments) (orig. proceeding).

         Rule 24.4 allows this Court to review the trial court's decision not to permit suspension of enforcement, and permits us to increase or decrease the amount of the bond, require other changes to the order, or remand to the trial court for entry of findings of fact or taking of evidence. Tex.R.App.P. 24.4. This Court reviews a trial court's ruling under rule 24.2(a)(3) for an abuse of discretion. Hydroscience Techs., Inc. v. Hydroscience, Inc., 358 S.W.3d 759, 760-61 (Tex. App.-Dallas 2011, no pet.). (citing Tex.R.App.P. 24.4(a)(5) and EnviroPower, L.L.C. v. Bear, Stearns & Co., 265 S.W.3d 1, 2 (Tex. App.-Houston [1st Dist.] 2008, pet. denied)).

         Discussion

         We disagree with the HOA's contention that the judgment may not be superseded because it presents nothing on which the HOA can execute and is not a judgment "for something." Rule 24.2(a)(3) applies to this judgment because the judgment is not for money and is not for an interest in property. Rather, the judgment is declaratory and injunctive in nature because it ...


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