Shook v. Walden
| Decision Date | 18 February 2010 |
| Docket Number | No. 03-09-00576-CV.,03-09-00576-CV. |
| Parties | Stanley SHOOK and Patrick Jaehne, Appellants, Terry Walden and Joy Walden, Cross-Appellants, v. Terry WALDEN and Joy Walden, Appellees, Stanley Shook and Patrick Jaehne, Cross-Appellees. |
| Court | Texas Court of Appeals |
Jamie A. Rose, Amanda G. Taylor, Hohmann, Taube & Summers, L.L.P., Austin, TX, for Appellant.
Patrick Jaehne, Cedar Creek, TX, pro se appellant.
Derek R. Van Gilder, The Law Office of Derek R. Van Glider, Bastrop, Tracy J. Willi, James N. Willi, Willi Law Firm, P.C., Austin, TX, for appellee.
Before Justices PURYEAR, PEMBERTON and WALDROP.
Appellant Stanley Shook has filed a motion for review of a December 9, 2009 district court order determining the amount of security required for him to suspend enforcement of the district court's judgment pending this appeal. See Tex. Civ. Prac. & Rem.Code Ann. § 52.006(d) (West 2008); Tex.R.App. P. 24.4. The primary issues in dispute are whether section 52.006, subsection (a), of the civil practice and remedies code, as amended in 2003, requires Shook to secure the amount of attorney's fees and prejudgment interest awarded in the district court's judgment. Also at issue is whether Shook sufficiently secured the costs awarded in the judgment and post-judgment interest. We conclude that Shook is not required to secure the amount of attorney's fees and that he sufficiently secured costs. However, we hold that Shook is required to secure the amount of prejudgment interest awarded in the judgment and furnish additional security for post-judgment interest.
The underlying dispute involves two contracts between S & J Endeavors, L.L.C. (S & J) and appellees Terry and Joy Walden whereby S & J sold the Waldens real property (the "Land Contract") and agreed to construct a house on the property (the "Residential Construction Contract"). Of relevance to this proceeding, a jury found that S & J had breached the Residential Construction Contract and that the Waldens had incurred $80,000 in damages resulting from that breach. The sole element of damages submitted to the jury on that claim was "the difference, if any, of the value of the house as it was received and the price The Waldens paid for it . . . at the time the title was transferred." The jury also found that S & J was the alter ego of both appellant Shook and appellant Patrick Jaehne and had been operated as a single business enterprise with both Shook and Jaehne.
The Waldens had pled for attorney's fees under chapter 38 of the civil practice and remedies code. See Tex. Civ. Prac. & Rem.Code Ann. § 38.001(8) (West 2008) (). Following the verdict, the parties tried the amount of attorney's fees to the bench. Thereafter, the district court rendered judgment awarding the Waldens the following sums from S&J, Shook and Jaehne, jointly and severally:
Following post-judgment motions, Shook filed a notice of appeal in this Court.2 On October 5, Shook deposited with the district clerk a cashier's check in the amount of $94,936.25 for the purpose of superseding the judgment. See Tex.R.App. P. 24.1(a)(3), (c).3 Contending that this amount was insufficient to secure the judgment, the Waldens filed a motion requesting the district court to determine the sufficiency of Shook's security. See id. R. 24.3(a)(1).4
To suspend a money judgment pending appeal in a civil case, section 52.006, subsection (a), of the civil practice and remedies code requires that a judgment debtor furnish a bond, deposit, or other security in an amount "equal to the sum of: (1) the amount of compensatory damages awarded in the judgment; (2) interest for the estimated duration of the appeal; and (3) costs awarded in the judgment." Tex. Civ. Prac. & Rem.Code Ann. § 52.006(a); see Tex.R.App. P. 24.2(a)(1) (). This amount, however, may not exceed the lesser of fifty percent of the judgment debtor's current net worth or $25 million. Tex. Civ. Prac. & Rem.Code Ann. § 52.006(b); see Tex.R.App. P. 24.2(a)(1). Additionally, if the trial court finds that the judgment debtor is likely to suffer "substantial economic harm" from posting security in the amount otherwise required, the court "shall lower the amount of the security to an amount that will not cause the judgment debtor substantial economic harm." Tex. Civ. Prac. & Rem.Code Ann. § 52.006(c); see Tex.R.App. P. 24.2(b).
Shook contended that the $94,936.25 he deposited was sufficient under section 52.006, subsection (a), to supersede the judgment because it represented the sum of (1) the $80,000 in contract damages, which Shook asserted were the entirety of the "compensatory damages awarded in the judgment;" (2) post-judgment interest on the contract damages at the judgment rate of five percent for an estimated one-year duration of the appeal, which equaled $4,000;5 and (3) "costs awarded in the judgment" of $345 in court costs certified by the district clerk plus the $10,591.25 in "costs associated with professional services" awarded in the judgment.6 See Tex Civ. Prac. & Rem.Code Ann. § 52.006(a); Tex.R.App. P. 24.2(a)(1). Shook further asserted that a higher amount of security would cause him "substantial economic hardship," see Tex. Civ. Prac. & Rem.Code Ann. § 52.006(c); Tex.R.App. P. 24.2(b), and that, at a minimum, the district court was required to limit the amount of security to fifty percent of his net worth. See Tex. Civ. Prac. & Rem.Code Ann. § 52.006(b); Tex.R.App. P. 24.2(a)(1). Shook filed evidence relevant to his net worth, including an affidavit in which he testified that his net worth was $514,029.00.
The Waldens asserted that Shook's deposit was insufficient because it did not secure the $318,000 in trial attorney's fees, the $10,000 in post-judgment trial-level attorney's fees,7 or prejudgment interest awarded in the judgment. They also urged that a more reasonable "estimated duration of the appeal" for which post-judgment interest must be secured was two years rather than the one-year estimate that Shook had employed, and that Shook was required to provide additional security for post-judgment interest on attorney's fees, prejudgment interest, and the "costs associated with professional services." The Waldens also filed objections to Shook's evidence8 and sought a deposition and document discovery from Shook concerning his net worth and any transfers of assets since January 1, 2006. Shook objected to the discovery on grounds that he had made a deposit sufficient to supersede the judgement, see Tex.R. Civ. P. 621a (), and that the district court had not held his deposit to be insufficient or even considered the issue yet.
A hearing on the Waldens' motion was held on December 9, 2009. The sole focus of the hearing was the threshold issue of whether the amount of Shook's deposit satisfied the requirements of section 52.006, subsection (a). No additional evidence was presented. Following the hearing, the district court signed an order determining that Shook's $94,936.25 deposit amount was insufficient to supersede the judgment. The court also set the amount of security required to supersede the judgment at $257,014.50—corresponding to fifty percent of Shook's net worth as represented in his affidavit—plus the "costs, including but not limited to Jury costs," awarded in the judgment. These "costs," the Waldens acknowledge, refer to court costs. Although the parties dispute the amount of court costs that Shook must secure, as discussed below, the Waldens contend they are less than $2,000.
The order does not explain how the district court calculated $257,014.50 as the amount required to secure the judgment, nor were findings of fact and conclusions of law issued or requested. As the parties seem to acknowledge, however, the calculation necessarily rests on the legal conclusion that the $318,000 in trial attorney's fees (or some portion thereof) must be included in the amount required to secure the judgment, as this is the only sum awarded in the judgment whose inclusion, alone or in combination with other amounts awarded in the judgment, would yield a sum equal to or exceeding $257,104.50.9
The district court ordered that post-judgment discovery proceed and indicated that it would address in further proceedings any issues relating to the application of limitations on security based on Shook's net worth.10 On the following day, Shook filed his motion requesting this Court to review the district court's order setting the amount of security required to supersede the judgment. See Tex. Civ. Prac. & Rem. Code Ann. § 52.006(d); Tex.R.App. P. 24.4. With his motion, Shook also requested an emergency stay of all proceedings in the...
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...a claimant for actual economic or pecuniary loss; the term does not include exemplary damages or noneconomic damages"); Shook v. Walden, 304 S.W.3d 910, 921 (Tex. App.—Austin 2010, no pet.) (holding that "economic damages" do not include legal fees). Because the Plaintiffs presented no evid......