Mansik & Young Plaza LLC, Young Ho Kim, Sun Hui Kim and David Kim v. K-Town Management, LLC D/B/A KTN US IP Investments, LTD. Odes H. Kim Ji Hong Park, and Chul Seung Park

Affirm; and Opinion Filed July 24, 2015

S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-15-00353-CV

MANSIK & YOUNG PLAZA LLC, YOUNG HO KIM,
SUN HUI KIM, AND DAVID KIM, Appellants
V.
K-TOWN MANAGEMENT, LLC D/B/A KTN US; IP INVESTMENTS, LTD.;
ODES H. KIM; JI HONG PARK; AND CHUL SEUNG PARK, Appellees

On Appeal from the 193rd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-14-12729

OPINION ON MOTION TO SET SUPERSEDEAS AMOUNT
Before Chief Justice Wright, Justice Lang-Miers, and Justice Stoddart
Opinion by Chief Justice Wright
Before the Court is the motion of appellees K-Town Management, LLC d/b/a KTN US,

IP Investments, Ltd., Odes H. Kim, Ji Hong Park, and Chul Seung Park to increase the amount

appellants must post to suspend execution of the trial court’s judgment to include the attorney’s

fees awarded by the trial court. See TEX. R. APP. P. 24.4 (party may seek review of trial court’s

ruling on amount of bond). We deny the motion and affirm the trial court’s ruling.

Appellants sued appellees for business disparagement, slander of title, tortious

interference, and libel arising from statements published in appellees’ newspaper. Appellees

moved to dismiss under the Texas Citizens Participation Act. See TEX. CIV. PRAC. & REM. CODE

ANN. §§ 27.001–27.011 (West 2015) (“TCPA”). The trial court granted the motion and awarded
appellees $33,683.87 for reasonable and necessary attorney’s fees. See TEX. CIV. PRAC. & REM.

CODE ANN. § 27.009. The trial court’s order also includes amounts for attorney’s fees in the

event of appeals to this Court and the Texas Supreme Court.

Appellants filed a cash deposit of $2,056 in lieu of a supersedeas bond. This deposit

covers only costs of court. The trial court denied appellees’ motion to raise the amount to

include the attorney’s fees awarded under the TCPA. We review a trial court’s ruling on the

amount of a supersedeas bond for abuse of discretion. G.M. Houser, Inc. v. Rodgers, 204

S.W.3d 836, 840 (Tex. App.—Dallas 2006, no pet.). But to the extent it turns on a question of

law, we review the amount of a bond de novo. Imagine Automotive Grp., Inc. v. Boardwalk

Motor Cars, LLC, 356 S.W.3d 716, 718 (Tex. App.—Dallas 2011, no pet.).

When a judgment is for money, the amount of the security must equal 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) (West 2015); TEX. R. APP. P. 24.2(a)(1). The Texas Supreme Court has held

that “compensatory damages” under section 52.006 do not include attorney’s fees. In re Nalle

Plastics Family Ltd. P’ship, 406 S.W.3d 168 (Tex. 2013); In re Corral-Lerma, 451 S.W.3d 385

(Tex. 2015) (per curiam). Appellees contend, however, that the TCPA provides a unique remedy

of immediate redress and is to be construed liberally, so that the holdings of Nalle Plastics and

Corral-Lerma do not apply to attorney’s fees awarded under the TCPA.

Under section 27.009 of the TCPA, if a trial court orders dismissal of an action, it “shall”

award attorney’s fees to the moving party. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 27.009(a)(1); Cruz v. Van Sickle, 452 S.W.3d 503, 522 (Tex. App.—Dallas 2014, pet. filed)

(rejecting argument that attorney’s fees award under TCPA is discretionary). Section 27.009

provides:

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 §27.009. Damages and Costs

(a) If the court orders dismissal of a legal action under this chapter, the
court shall award to the moving party:

(1) court costs, reasonable attorney’s fees, and other expenses incurred
in defending against the legal action as justice and equity may require;
and

(2) sanctions against the party who brought the legal action as the court
determines sufficient to deter the party who brought the legal action
from bringing similar actions described in this chapter.

(b) If the court finds that a motion to dismiss filed under this chapter is
frivolous or solely intended to delay, the court may award court costs and
reasonable attorney’s fees to the responding party.

In Nalle Plastics, the supreme court interpreted the term “compensatory damages” used

in section 52.006 of the civil practice and remedies code, which governs the amount of security

to supersede a judgment. The court explained that the enactment of Chapter 52 of the code was

“part of House Bill 4, a 2003 comprehensive tort reform measure.” Nalle Plastics, 406 S.W.3d

at 169. The legislature created a “new balance” between the judgment creditor’s right in the

judgment and the judgment debtor’s right to meaningful appellate review. Id. at 170 (citing

Elaine A. Carlson, Reshuffling the Deck: Enforcing and Superseding Civil Judgments on Appeal

after House Bill 4, 46 S. TEX. L. REV. 1035, 1038 (2005)). After a review of case law addressing

the difference between attorney’s fees and damages, the court concluded:

These cases demonstrate the difference between compensation owed for an
underlying harm and fees that may be awarded for counsel’s services. . . .
While attorney’s fees for the prosecution or defense of a claim may be
compensatory in that they help make a claimant whole, they are not, and
have never been, damages. Not every amount, even if compensatory, can be
considered damages. Like attorney’s fees, court costs make a claimant
whole, as does pre-judgment interest. Yet it is clear that neither costs nor
interest qualify as compensatory damages. Otherwise, there would be no
need to list those amounts separately in the supersedeas bond statute. See
TEX. CIV. PRAC. & REM. CODE § 52.006(a) (security must be “equal [to] the
sum of . . . the amount of compensatory damages awarded in the
judgment[,]. . . interest for the estimated duration of the appeal[,] and . . .
costs awarded in the judgment”); see also Spradlin v. Jim Walter Homes,
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 Inc., 34 S.W.3d 578, 580 (Tex. 2000) (noting that the Court gives effect to
all words of a statute and does not treat any language as surplusage).

Id. at 173–74.

The question presented in Corral-Lerma was similar. See Corral-Lerma, 451 S.W.3d at

386. Corral-Lerma sued Border Demolition and Environmental, Inc. under the Texas Theft

Liability Act, and Border Demolition counterclaimed for attorney’s fees under the same Act. Id.

(citing TEX. CIV. PRAC. & REM. CODE ANN. § 134.005(b)). The trial court granted summary

judgment for Border Demolition and awarded $78,001 in attorney’s fees through trial as well as

conditional fees for appeal. Id. Although the trial court concluded that attorney’s fees were not

included in the security amount, the court of appeals disagreed, explaining that under the Theft

Liability Act, an attorney’s fees award “compensates or indemnifies a defendant for the legal

expense he incurs in successfully defending a claim made against him under the Act.” See id.

(quoting Corral-Lerma v. Border Demolition & Envtl., Inc., 420 S.W.3d 59, 64–65 (Tex. App.—

El Paso 2012, order)).

Relying on Nalle Plastics, the supreme court granted mandamus relief and directed the

court of appeals to withdraw its order. Id. at 388. Border Demolition sought to distinguish its

award of attorney’s fees from the attorney’s fees awarded in Nalle Plastics, arguing that a

prevailing defendant under the Texas Theft Liability Act must be awarded its attorney’s fees

even without an award of compensatory damages. See id. at 386 (citing damages provision of

Texas Theft Liability Act, TEX. CIV. PRAC. & REM. CODE ANN. § 134.005(b)). The supreme

court rejected this argument, explaining that “[t]his statutory distinction does not undermine the

inherent differences between compensatory damages and attorney’s fees we acknowledged in

Nalle Plastics. On the contrary, we observed that ‘[w]hile attorney’s fees for the prosecution or

defense of a claim may be compensatory in that they help make a claimant whole, they are not,

and have never been, damages.’” Id. at 386–87 (quoting Nalle Plastics, 406 S.W.3d at 173).
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 The court also rejected Border Demolition’s argument that if attorney’s fees were not

included in the security, then there would be “essentially no security” during appeal. See id. at

387. The court noted that any other litigant who receives a compensatory damages award that is

significantly smaller than an accompanying attorney’s fees award is in the same position. Id.

Because Chapter 52 reflects the legislature’s intent to create a “new balance” between judgment

debtors and creditors, it is the court’s duty to “enforce the statute as we find it.” Id. In sum, the

court concluded that attorney’s fees awarded under the Texas Theft Liability Act are not

“compensatory damages” for “purposes of calculating the security amount necessary to

supersede a judgment during appeal.” Id. at 386.

In addition to following Nalle Plastics in breach of contract cases, this Court has

considered whether attorney’s fees awarded under the deceptive trade practices act for a

groundless claim brought in bad faith are “compensatory damages” that must be superseded

under section 52.006. See Lopez v. RS Clark & Assocs., Inc., 396 S.W.3d 656, 657 (Tex. App.—

Dallas 2013, no pet.) (on motion to review order requiring additional security to supersede

judgment). In Lopez, the trial court specifically ruled that the attorney’s fees awarded in the

judgment were compensatory damages “to compensate [appellee] for its actual economic or

pecuniary loss as a result of the bad faith maintenance of this groundless suit.” Id. Relying on

our opinion in Imagine Automotive, we reversed the trial court’s order including the fees in the

amount to be superseded, explaining that attorney’s fees are not compensatory damages. Id.

We conclude that the analysis under Nalle Plastics and Corral-Lerma applies to

attorney’s fees awarded under the TCPA. Although title of the TCPA section addressing

attorney’s fees (quoted above) is entitled “Damages and Costs,” TEX. CIV. PRAC. & REM. CODE

ANN. § 27.009 (emphasis added), the heading of a section “does not limit or expand the meaning

of a statute,” as appellees recognize. TEX. GOV’T CODE ANN. § 311.024 (West 2013). But

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appellees argue the substance of the provision nonetheless establishes that attorney’s fees

awarded under the TCPA are not “a form of ancillary relief,” but are awarded “as compensatory

damages for the injury that the judicial system immediately caused to the defendant because the

system was abused by the plaintiffs.” They do not point to specific language in section 27.009 to

support their interpretation, relying instead on the general purposes of the TCPA.

The supreme court has explained that the TCPA “endorses a summary process” to

accomplish its purpose “to identify and summarily dispose of lawsuits designed only to chill

First Amendment rights.” In re Lipsky, 460 S.W.3d 579, 589 (Tex. 2015). We have recently

noted that “[t]he stated purpose of the [TCPA] is to encourage and safeguard the constitutional

rights of persons to petition, speak freely, associate freely, and otherwise participate in

government to the maximum extent permitted by law and, at the same time, protect the rights of

a person to file meritorious lawsuits for demonstrable injury.” ExxonMobil Pipeline Co. v.

Coleman, No. 05-14-00188-CV, 2015 WL 2206466, at *3 (Tex. App.—Dallas May 12, 2015, no

pet. h.).

There is nothing in the language of section 27.009 to indicate that the attorney’s fees

provided constitute “compensation owed for an underlying harm” in accordance with the purpose

of the TCPA rather than “fees that may be awarded for counsel’s services” in defending a claim.

See Nalle Plastics, 406 S.W.3d at 173–74. As we concluded in Lopez, even attorney’s fees

incurred in defending a bad faith and groundless suit are not “compensatory damages.” See

Lopez, 396 S.W.3d at 657. Without statutory language to support a departure from the analysis

of Nalle Plastics and Corral-Lerma, we deny appellees’ motion to increase the amount to

supersede the trial court’s judgment to include attorney’s fees.

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We affirm the trial court’s order.

150353F.P05

/Carolyn Wright/
CAROLYN WRIGHT
CHIEF JUSTICE

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