Court of Appeals of Texas, Fifth District, Dallas
ERWIN CRUZ AND THE ERWIN A. CRUZ FAMILY LIMITED PARTNERSHIP, BOTH OF THEM INDIVIDUALLY AND ON BEHALF OF NORTH DALLASMEDICAL IMAGING, LP, PLANO AMI, LP, AND GHANI MEDICAL INVESTMENTS, INC., Appellants
MEHRDAD GHANI, Appellee
Appeal from the 101st Judicial District Court Dallas County,
Texas Trial Court Cause No. DC-10-16274
MEMORANDUM OPINION ON MOTION TO REVIEW SUPERSEDEAS
CAROLYN WRIGHT CHIEF JUSTICE.
Chief Justice Wright and Justices Francis and Stoddart Before
the Court is appellant Erwin Cruz's motion to review the
trial court's order requiring additional supersedeas
bond. See Tex. R. App. P. 24.4(a). In his motion,
Cruz asserts the trial court erred in including the sum it
awarded to appellee Mehrdad Ghani for his "wrongful
execution" claim in determining the amount of bond or
cash deposit necessary to supersede the judgment. For the
following reasons, we affirm.
2012, Cruz obtained a judgment against Ghani for over $4
million. Ghani appealed, but did not supersede the judgment.
While Ghani's appeal was pending, Cruz obtained a writ of
execution and caused a condominium owned by Ghani to be sold
for $25, 000. After the execution sale, this Court reversed
the judgment on which execution issued. On remand, Ghani
asserted a counterclaim for wrongful execution. The trial
court subsequently rendered a final judgment that Cruz take
nothing on his claims and that Ghani recover $217, 500, the
stipulated fair market value of Ghani's condominium at
the time of the execution sale. The trial court also awarded
Ghani prejudgment interest, post-judgment interest and costs.
perfected an appeal from that judgment. To suspend
enforcement of the judgment while he pursued his appeal, Cruz
filed a $10, 000 cash deposit, representing only the trial
court's award of court costs. Ghani filed a motion to
increase supersedeas to require Cruz to post a bond or file a
cash deposit in the amount of at least $224, 419.05, the
amount due on the judgment plus estimated post-judgment
interest and court costs. The trial court granted Ghani's
motion. In his motion for review, Cruz contends the trial
court erred in requiring him to post security for the amount
of the trial court's judgment.
judgment debtor is entitled to supersede the judgment while
pursuing an appeal. Miga v. Jensen, 299 S.W.3d 98,
100 (Tex. 2009); Imagine Auto. Group, Inc. v. Boardwalk
Motor Cars, LLC, 356 S.W.3d 716, 718 (Tex.
App.-Dallas 2011, no pet.). Generally, when the judgment is
for money, the amount of bond or security must equal the sum
of the amount of compensatory damages and costs awarded in
the judgment and interest for the estimated duration of the
appeal. See Tex. Civ. Prac. & Rem. Code Ann.
§ 52.006(a) (West 2015); Tex.R.App.P. 24.2(a)(1).
"Compensatory damages" includes damages intended to
compensate a claimant for an "actual economic or
pecuniary loss." See Imagine Auto. Group, 356
S.W.3d at 718 (citing Black's Law Dictionary 416 (8th ed.
2007)); cf. Tex. Civ. Prac. & Rem. Code Ann.
§ 41.001(4) (under chapter 41, compensatory damages
includes "damages intended to compensate a claimant for
actual economic or pecuniary loss").
section 34.022(a) of the civil practice and remedies code,
"[a] person is entitled to recover from the judgment
creditor the market value of the person's property that
has been seized through execution of a writ issued by a court
if the judgment on which execution is issued is reversed or
set aside but the property has been sold at execution."
Tex. Civ. Prac. & Rem. Code Ann. § 34.022(a). The
amount of recovery is determined by the market value at the
time of sale of the property sold. Id. at §
the parties stipulated that Ghani's condominium was sold
at an execution sale pursuant to a judgment that was later
reversed on appeal and that the fair market value of the
condominium at the time of the sale was $217, 500. Based on
that stipulation, the trial court entered a judgment in favor
of Ghani for $217, 500.
noted above, "compensatory damages" means damages
intended to compensate a person for an "actual economic
or pecuniary loss." See Imagine Auto. Group,
356 S.W.3d at 718. Cruz, however, contends because he
lawfully pursued execution on Ghani's condominium, any
economic loss sustained by Ghani are "incidental costs
of litigation" and not compensatory damages. Cruz
compares these "incidental costs of litigation" to
an award of attorney fees and relies on cases holding that
awards of attorney's fees do not constitute compensatory
damages. See In re Nalle Plastics Family L.L.P., 406
S.W.3d 168, 172 (Tex. 2013) (orig. proceeding). We agree that
attorney's fees are not compensatory damages. In re
Nalle Plastics Family, 406 S.W.3d at 173.
unlike statutes authorizing the recovery of attorney's
fees, section 34.022 provides for an independent right of
action. See Cadleway Properties, Inc. v. Brimer, No.
05-96-01946-CV, 1999 WL 42039, at *2 (Tex. App.-Dallas Feb.
2, 1999, no pet.) (mem. op.). Specifically, section 34.022
allows a claimant to bring an action when his property has
been sold at an execution sale to satisfy an erroneous
judgment. The recovery authorized is the fair market value of
the property at the time of the execution sale. Tex. Civ.
Prac. & Rem. Code Ann. § 34.022(b). We conclude the
recovery permitted by section 34.022 is intended to
compensate the claimant for the loss of the property sold.
Cf. Miga v. Jensen, 299 S.W.3d 98, 101 (Tex. 2009)
(on reversal of judgment, party who has received the benefit
of erroneous judgment obligated to make restitution to other
party "for what he has lost.") (quoting Bank of
U.S. v. Bank of Wash., 31 U.S. 8, 17 (1832)); J
& D Towing, LLC v. Am. Alternative Ins. Corp., 478
S.W.3d 649, 657 (Tex. 2016) (measure of direct damages when
property totally destroyed is the fair market value of the
property immediately before the injury at the place where the
reaching this conclusion, we necessarily reject Cruz's
contention that the trial court's award was akin to an
award of equitable disgorgement. Awards for equitable
disgorgement do not constitute compensatory damages because
they are not based on an actual pecuniary loss suffered by
the plaintiff, but on the defendant's ill-gotten gains.
See In re Longview Energy Co., 464 S.W.3d 353, 360
(Tex. 2015); see also McCullough v. Scarbrough, Medlin
& Associates, Inc., 435 S.W.3d 871, 905 (Tex.
App.-Dallas 2014, pet. denied) ("Equitable disgorgement
is distinct from an award of actual damages in that the
disgorgement award "serves a separate function of
protecting fiduciary relationships."). According to
Cruz, the trial court's award in this case, like an award
of equitable disgorgement, was not based on an actual loss
Ghani suffered. To support that claim, Cruz alleges Ghani
himself purchased the condominium at the execution sale. In
effect, Cruz contends Ghani did not suffer the loss he
claimed. Ghani disputes that contention. Regardless, the
issue now before us is whether the ...