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In re K.K.W.

Court of Appeals of Texas, Fifth District, Dallas

March 27, 2018


          On Appeal from the 254th Judicial District Court Dallas County, Texas Trial Court Cause No. DF-04-12034-R

          Before Chief Justice Wright, Justice Evans, and Justice Brown



         Before the Court is appellant's emergency motion to decrease amount of security. The underlying judgment awards appellees their attorney's fees through trial, court costs, declaratory relief, and conditional appellate attorney's fees. The trial court ordered security set at the amount of costs plus the award of conditional appellate attorney's fees. We agree with appellant that the amount of security ordered is excessive. We grant the motion and modify the trial court's August 24, 2016 order for security bond to reduce the amount of security to $100, 000.


         The underlying proceeding was brought as a declaratory judgment action by appellee K.L.W. seeking construction and interpretation of his son's trust, the K.K.W. Trust, and the Final Decree of Divorce between K.L.W. and appellant K.B.W. K.B.W. is the child's mother, K.L.W. is the child's father, and appellee John McReynolds is the Trustee of the child's trust. Mother and Father are cosettlors of the trust and their son is the Trust's beneficiary. Father brought the underlying declaratory judgment action because he and Mother disagreed on the appropriateness of the expenses that Mother was presenting to the Trustee for payment. Mother asserted counterclaims against Father and a third-party petition against the Trustee. She sought a declaratory judgment, removal of the Trustee, and reformation of the Trust and asserted claims of fraud in the inducement, knowing participation in breaches of fiduciary duties, breach of contract, and fraud.

         I. The Judgment

         The trial court granted summary judgment in favor of Father as to all of Mother's claims. The trial court also granted Father's claims for declaratory relief and declared the following as a matter of law (1) only the Trust sets forth the terms of the obligation of the Trustee to pay the expenses of the beneficiary, (2) the Trust was not amended or altered by the Final Decree of Divorce, and (3) the Trustee is not required under the terms of the Trust to pay all of the expenses of the beneficiary. The only claims remaining at trial were each party's claims for attorney's fees and costs.

         The trial court's final judgment incorporates the interlocutory summary judgment orders, awards no compensatory damages, and awards $453, 866.52 in attorney's fees to Father, $578, 115.62 in attorney's fees to the Trustee, court costs, and the declaratory relief outlined above regarding the Trust. The judgment also awards $200, 000 in conditional appellate attorney's fees to Father and $145, 000 in conditional appellate attorney's fees to the Trustee.

         II. The Order on Security, Injunction, and Turnover Order

         In their post-judgment motions, Father and the Trustee asked the trial court to set an amount of security pursuant to Rule 24.2, enter an injunction to prevent Mother from dissipating or transferring assets to avoid satisfaction of the judgment, and to appoint a receiver and order Mother to turnover her nonexempt property. The trial court granted all relief requested by Father and the Trustee. Mother now seeks review of the Order on Security.

         A. Order on Security

         Regarding the security amount, Father conceded that the attorney's fees awarded in the final judgment through trial should not be included in the amount of security because they are not compensatory damages. Father asked, instead, for security to include the costs of $71, 475.27 plus additional security to be ordered under Rule 24.2(a)(3) because the judgment included declaratory relief and se cur ity was needed to protect him against loss or damage the appeal might cause. Father argued that the security necessary to provide that protection was the costs plus the amount of conditional appellate attorney's fees awarded to Father and the Trustee. In his motion, Father asked for a bond totaling $416, 475.27, which was the sum of the $71, 475.27 costs awarded, $200, 000 in conditional appellate fees awarded to Father, and $145, 000 in conditional appellate fees awarded to the Trustee. At the hearing on the motion, however, Father's attorney told the court that the judgment included only $130, 000 in conditional appellate fees for the Trustee and, as a result, requested that the bond be set at $401, 475.27 (i.e., $15, 000 less than originally requested reflecting the $130, 000 rather than $145, 000 fees to the Trustee). The "Order for Security Bond" set the bond at the amount requested at the hearing - $401, 475.00 - to suspend enforcement of the Final Judgment.

         B. The Turnover Order and ...

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