NUMBER 13-11-00706-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
EX PARTE THE CITY OF CORPUS CHRISTI, TEXAS
On appeal from the 94th District Court
of Nueces County, Texas.
MEMORANDUM OPINION
Before Justices Garza, Benavides, and Perkes
Memorandum Opinion by Justice Perkes
The City of Corpus Christi (“the City”) files this interlocutory appeal challenging the
trial court’s order regarding the security bond amount ordered to be paid by Mike Hummell
and David Barabino.1 See TEX. GOV’T CODE ANN. §§ 1205.101–.105. (West 2000). On
appeal, the City argues the trial court abused its discretion in setting the security bond
1
Section 1205.068 provides for the accelerated appeal of orders entered under section 1205.103
or 1205.104 of the Texas Government Code. See TEX. GOV’T CODE ANN. § 1205.068 (West 2000).
amount because (1) improper standards were used to set the bond amount; and (2) the
bond amount is insufficient and contrary to the evidence. We affirm.
I. BACKGROUND
In 2008, the City’s voters approved the issuance of various bonds, including bond
funds to extend Aquarius Street from Dasmarinas to Commodores Street on North Padre
Island. Hummell and Barabino filed suit, seeking injunctive relief regarding actions and
expenditures of 2008 bond election monies which were to be used for the proposed
alteration of the Aquarius Street project approved by the voters.2 The City subsequently
filed suit seeking an expedited declaratory judgment pursuant to Chapter 1205 of the
Texas Government Code, also known as the Expedited Declaratory Judgment Act
(“EDJA”). See TEX. GOV’T CODE ANN. § 1205.021 (West 2000). By this lawsuit, the City
sought to validate the use of bond funds for all of the 2008 bond issue projects, including
the street project at issue in the Hummell-Barabino lawsuit.
The trial court entered an order consolidating the Hummell-Barabino lawsuit into
the City’s EDJA action. After a hearing on the City’s motion to set security bond, the trial
court set the bond at $500.00, allocating $250.00 each to Hummel and Barabino. See
TEX. GOV’T CODE ANN. §§ 1205.101–.104. (West 2000). The trial court denied the City’s
motion to reconsider the bond amount. This appeal ensued.
2
At the time of the bond election, a dedicated road was already platted to connect Aquarius Street
directly from its termini with Dasmarinas and Commodores. After the re-design, the street project no
longer extended the street as platted, but rather moved the connection through a platted residential
subdivision.
2
II. STANDARD OF REVIEW AND APPLICABLE LAW
We review a district court's decision on the amount of a security bond for an abuse
of discretion. Hotze v. City of Houston, 339 S.W.3d 809, 819 (Tex. App.—Austin 2011,
no pet.). The statute setting forth the bond requirements provides:
The bond must be in an amount determined by the court to be sufficient to
cover any damage or cost, including an anticipated increase in interest
rates or in a construction or financing cost, that may occur because of the
delay caused by the continued participation of the opposing party or
intervenor in the acts if the issuer finally prevails and obtains substantially
the judgment requested in its petition.
TEX. GOV’T CODE ANN. § 1205.103(b) (West 2000).
III. ANALYSIS
The City argues that the proper standard for setting the amount of bond is the
anticipated cost of any delay that the Hummell-Barabino lawsuit may cause. The City
claims the trial court applied a higher burden, requiring the City to prove actual delay and
that damages will occur because of continued participation by Hummell. The City
concludes that the trial court abused its discretion in setting the security bond amount
because (1) improper standards were used to set the bond amount; and (2) the bond
amount is insufficient and contrary to the evidence
At the hearing, the City introduced the testimony of Pete Anaya, the City’s director
of engineering services. He testified that the Aquarius project was about a $1.3 million
project. According to Anaya, if the project were to be delayed six months, it would cost
“somewhere in the $200,000 range for extra costs.” He said that amount would double if
the project was delayed twelve months. On cross-examination, Anaya conceded that he
did not have documents supporting his figures. Later, when he returned to the witness
3
stand with his calculations, he assumed an annual cost increase of thirty percent. He
testified, however, that one 2008 bond election project saw an increase in costs, whereas
another had decreased. Anaya conceded that he did not know whether prices were
going to rise or fall.
Constante Sanchez, the City’s interim director of financial services, testified that
the third traunch of the 2008 bond projects was delayed because of this litigation. On
cross-examination, however, she conceded that she did not have the experience that
would enable her to testify about construction costs or cost increases.
Mark Seal, the City’s senior vice-president in charge of public finance, testified that
the delay in the issuance of bonds under the third traunch “very well could” cost the City
money. He noted that a three-month delay of the issuance of the third traunch could
result in an increased “interest” cost to the City of approximately $ 5.7 million. On cross-
examination, however, he admitted that there is no way to know if the investment would
go up or down. He further admitted that previous delays in selling bonds for the project
had not caused harm, and that rates could go down as well as up.
The trial court acted as the fact finder. It is within the trial court’s province to judge
the credibility of witnesses, even expert witnesses. Tex. Workers’ Compensation
Comm’n v. Garcia, 893 S.W.2d 504, 535 (Tex. 1995). In our review of an expert’s
opinion with respect to damages, we may consider the admission on cross-examination
that the assumptions on direct examination cannot be verified. See Kerr-McGee Corp. v.
Helton, 133 S.W.3d 245, 255–58 (Tex. 2004) (abrogated on other grounds by Oil & Gas
4
Corp. v. Garza Energy Trust, 268 S.W.3d 1 (Tex. 2008)). We conclude the trial court did
not abuse its discretion in setting the security bond.
IV. CONCLUSION
We affirm the trial court’s order setting security bond.
GREGORY T. PERKES
Justice
Delivered and filed the
9th day of May, 2013.
5