Joan Gottlieb Mendell v. Laurence Scott and Rachel Chaput

Motion Granted in Part and Denied in Part, and Opinion on Motion issued
July 26, 2022.

In The

Court of Appeals
For The

First District of Texas
————————————
NO. 01-20-00578-CV
———————————
JOAN GOTTLIEB MENDELL, Appellant
V.
LAURENCE SCOTT AND RACHEL CHAPUT, Appellees

On Appeal from the Probate Court No. 1
Harris County, Texas
Trial Court Case No. 475348

OPINION ON MOTION
Pursuant to Texas Rule of Appellate Procedure 24.4(a), appellant Joan

Gottlieb Mendell asks this Court to set aside the trial court’s order requiring her to

post a $435,666.46 bond to supersede part of a permanent injunction entered in favor

of appellees Laurence Scott and Rachel Chaput (collectively, “appellees”) and
against appellant individually and in her representative capacity as the trustee of a

family trust. We grant appellant’s motion in part, order the exclusion of interest from

the amount of security, and remand to the trial court for the taking of evidence and

a determination of whether the reduced amount of security is likely to cause

appellant substantial economic harm. We deny appellant’s motion in all other

respects.

Background

Appellant is the trustee of the MK Trust No. 2 (“Trust”). In April 2019,

appellees filed suit against appellant in her individual and representative capacities,

alleging that they were the beneficiaries of the Trust, the Trust had terminated by its

own terms, and appellant had failed to wind-up the Trust and distribute the Trust

assets to them. The Trust assets included four accounts: (1) a checking account at

Iberiabank (“Checking Account”); (2) a money market account at Iberiabank

(“Iberia Money Market”); (3) a money market account at UBS Financial Services

Inc.(“UBS Money Market”); and (4) stocks held with UBS Financial Services Inc.

(“Stocks”). Appellees sought actual and exemplary damages for appellant’s alleged

breaches of fiduciary duties, declaratory and injunctive relief, and attorney’s fees.

A jury returned a verdict in favor of appellees, and the trial court signed a final

judgment declaring appellees beneficiaries of the Trust, which had terminated, and

awarding $715,792.21 in damages and attorney’s fees against appellant in her

2
individual capacity. The trial court also entered permanent injunctive relief against

appellant in her individual and representative capacities. See TEX. PROP. CODE

§ 114.008(a)(3) (listing remedies for breach of trust, including injunctive relief). The

injunction on review is the modified permanent injunction entered by the trial court

on January 20, 2021.1 The modified permanent injunction ordered that:

i. [Appellant], in her capacity as trustee of the [Trust], shall
wind-up the [Trust] within thirty (30) days of this Order and shall
distribute all assets of the [Trust] to [appellees], in equal shares,
in accordance with the Trust’s terms.

ii. [Appellant], individually, and in her capacity as trustee of the
[Trust] shall be enjoined from selling, spending, or otherwise
dissipating in any way any assets belonging to the Trust,
including but not limited to reimbursement or further payment of
attorney’s fees that may have been incurred by [appellant] during
the pendency of this litigation[.]

iii. [Appellant] shall be denied compensation for serving as the
trustee of the Trust and shall return to the [Trust] any trustee
compensation which she paid herself from funds or property
belonging to the [Trust.]

iv. Any attorney’s fees that were paid with funds or property
belonging to the [Trust] shall be restored and returned to the
Trust. This shall not be construed in a manner that would lead to
[appellees] receiving a “double recovery” of the $200,000.00
awarded in actual damages against [appellant] at the October
22, 2020, jury trial in this matter.

1
The trial court first entered permanent injunctive relief against appellant on the final
day of trial in October 2020. On January 20, 2021, after post-trial proceedings and
rendition of the final judgment, the trial court modified the permanent injunction.
Accordingly, the provisions quoted and discussed herein are from the January 20
modified permanent injunction.
3
 v. [Appellant] shall provide a final accounting to [appellees] within
thirty (30) days.
Appellant sought to suspend enforcement of the final judgment and the

modified permanent injunction pending her appeal. To supersede the final judgment

for money, appellant made a cash deposit into the registry of the trial court in lieu of

posting a supersedeas bond. To determine the amount and type of security to

supersede the modified permanent injunction—specifically, paragraphs (i) and (v)—

appellant filed a motion in the trial court.

Relevant here, the trial court determined as to injunction paragraph (i), which

required the winding-up and distribution of the Trust assets, that:

• “[I]t is a judgment for the recovery of personal property under Texas
Rule of Appellate Procedure 24.2(a)(2)(B).”

• The value of the personal property on the date of the injunction was:
(1) Checking Account, $51,347.73; (2) Iberia Money Market,
$102,712.18; (3) UBS Money Market, $89,223.25; and (4) Stocks,
$395,162.32.

• To supersede paragraph (i) as to the Checking Account, the Iberia
Money Market, and the UBS Money Market, appellant must “close the
[accounts] and deposit into the Registry of the Court [their] balance.”

• To supersede paragraph (i) as to the Stocks, appellant “must post a good
and sufficient bond with the Clerk of the Court under Texas Rule of
Appellate Procedure 24.1(a)(2), (b) in the amount of $435,666.46,
which represents the $395,162.32 in value of the Stocks . . . plus
$40,504.14 in interest at the rate of 5% for two years for the estimated
duration of the appeal.”

4
 As to injunction paragraph (v), which required a final accounting, the trial

court determined:

• “[I]t is a judgment for something other than money or an interest
in . . . property under Texas Rule of Appellate Procedure 24.2(a)(3).”

• No additional security was required to suspend enforcement of
paragraph (v) because the amount to supersede paragraph (i) would
“adequately protect [appellees] from loss or damage that the appeal
might cause.”

In ordering this security, the trial court rejected appellant’s request that she be

permitted to post alternative security in the form of (1) an order requiring UBS to

freeze the Trust’s account in which the Stocks are held (“freeze order”), or (2) an

order allowing her to liquidate the Stocks for deposit into the trial court’s registry.2

Appellant argued these alternative forms of security were necessary because a surety

would not accept the Stocks as collateral and the Trust lacked sufficient other assets

to fully collateralize a bond.3 And consequently, she could not obtain a supersedes

2
Appellant argued a freeze order would both keep the Stocks secure pending the
appeal and avoid the creation of tax liability that would result from liquidating the
Stocks for deposit into the trial court’s registry.
3
Appellant attached to her motion seeking to clarify the supersedeas requirements
correspondence received by her counsel in response to his request for information
about obtaining an appeal bond from SureTec Insurance Company (“SureTec”). The
responsive letter from SureTec’s representative stated: “SureTec requires 100%
collateral for an appeal bond, and will only accept cash collateral (wire transfer or a
cashier’s check) or an irrevocable letter of credit on an acceptable, preapproved
bank.” Appellant also attached her own affidavit averring that she was informed by
a “Wealth Strategy Associate” at a UBS branch office that UBS would not issue “an
irrevocable letter of credit using the Stocks as collateral.”
5
bond in the amount required to suspend enforcement of injunction paragraphs (i) and

(v). Alternatively, appellant requested that the amount of security be reduced to an

amount that would not cause her or the Trust substantial economic harm.

Legal Standards

“A judgment debtor is entitled to supersede the judgment while pursuing an

appeal[.]” Miga v. Jensen, 299 S.W.3d 98, 100 (Tex. 2009); see also In re Longview

Energy Co., 464 S.W.3d 353, 359 (Tex. 2015) (orig. proceeding) (observing

supersedeas rules “respect[] the importance of the right to a meaningful appeal”).

“Supersedeas preserves the status quo of the matters in litigation as they existed

before the issuance of the order or judgment from which an appeal is taken.” Smith

v. Tex. Farmers Ins. Co., 82 S.W.3d 580, 585 (Tex. App.—San Antonio 2002, pet.

denied).

Texas Rule of Appellate Procedure 24 sets out the requirements for

suspending enforcement of a judgment pending appeal in civil cases. See TEX. R.

APP. P. 24.1–.4. Unless the law or the appellate rules provide otherwise, the

judgment debtor may supersede the judgment by:

(1) filing with the trial court clerk a written agreement with the
judgment creditor for suspending enforcement of the judgment;

(2) filing with the trial court clerk a good and sufficient bond;

6
 (3) making a deposit with the trial court clerk in lieu of a bond; or

(4) providing alternate security ordered by the court.

TEX. R. APP. P. 24.1(a).

The amount of security required depends on the type of judgment. See TEX.

R. APP. P. 24.2(a). A money judgment may be superseded by a bond, deposit, or

security equal to “the sum of compensatory damages awarded in the judgment,

interest for the estimated duration of the appeal, and costs awarded in the judgment,”

subject to certain limitations. TEX. R. APP. P. 24.2(a)(1). To supersede a judgment

“for the recovery of an interest in real or personal property,” the amount of security

must be at least the value of the property interest on the date the trial court rendered

judgment. TEX. R. APP. P. 24.2(a)(2). Finally, when the judgment is “for something

other than money or an interest in property,” the trial court must set the amount and

type of security the judgment debtor must post. TEX. R. APP. P. 24.2(a)(3). The trial

court may decline to permit the judgment debtor to supersede the judgment,

however, if the judgment creditor posts “security ordered by the trial court in an

amount and type that will secure the judgment debtor against any loss or damage

caused by the relief granted” should an appellate court determine that the relief was

improper. Id.

Rule 24.4 authorizes an appellate court to engage in a limited supersedeas

review. See TEX. R. APP. P. 24.4. On any party’s motion, we may review: (1) the

7
sufficiency or excessiveness of the amount of security, (2) the sureties on a bond,

(3) the type of security, (4) the decision whether to permit suspension of

enforcement, and (5) the trial court’s exercise of discretion in ordering the amount

and type of security. TEX. R. APP. P. 24.4(a). We may require that the amount of the

“bond, deposit, or other security be increased or decreased” and that “another bond,

deposit, or security be provided and approved by the trial court clerk.” TEX. R. APP.

P. 24.4(d). We may also require other changes in the trial court order and remand

for entry of findings of fact or the taking of evidence. Id.

We generally review the trial court’s supersedeas rulings for an abuse of

discretion. See EnviroPower, L.L.C. v. Bear, Stearns & Co., 265 S.W.3d 1, 2 (Tex.

App.—Houston [1st Dist.] 2008, pet. denied). The test for abuse of discretion is

whether the trial court acted arbitrarily or unreasonably considering all the

circumstances of the case. See Samlowski v. Wooten, 332 S.W.3d 404, 410 (Tex.

2011); EnviroPower, 265 S.W.3d at 1. But to the extent the ruling turns on a question

of law, our review is de novo. Abdullatif v. Choudhri, 536 S.W.3d 48, 51 (Tex.

App.—Houston [14th Dist.] 2017, op. on motion); Mansik & Young Plaza LLC v.

K-Town Mgmt., LLC, 470 S.W.3d 840, 841 (Tex. App.—Dallas 2015, op. on

motion).

8
 Analysis

Appellant argues that the effect of the trial court’s supersedeas order is to deny

the Trust the ability to supersede parts of the modified permanent injunction pending

an appeal. She contends the trial court abused its discretion in the three respects:

• by improperly ordering her, individually, to post supersedeas on
behalf of the Trust, the true judgment debtor;

• by improperly applying the Finance Code provisions applicable
only to “money judgments” to a judgment for the recovery of
property; and

• by effectively preventing the true judgment debtor—the Trust—
from superseding paragraphs (i) and (v) of the modified
permanent injunction.

In addition, appellant complains the trial court failed to determine whether posting

a bond in the amount required is likely to cause the Trust substantial economic harm.

A. Judgment debtor

Appellant first contends the trial court abused its discretion by ordering her,

individually, to suspend enforcement of paragraphs (i) and (v) of the modified

permanent injunction as to the Stocks by posting a supersedeas bond on behalf of

the Trust. Appellant argues that because the Trust is the “true judgment debtor,” the

trial court could not order her to “use her own personal funds” to supersede the

modified permanent injunction as to the Stocks. We disagree that the trial court’s

supersedeas rulings require appellant to supersede the modified permanent

injunction in her individual capacity, using “her own personal funds.”

9
 In Texas, “[a] trust is not a legal entity.” Ditta v. Conte, 298 S.W.3d 187, 191

(Tex. 2009); Tomlinson v. Khoury, 624 S.W.3d 601, 608 (Tex. App.—Houston [1st

Dist.] 2020, pet. denied). Rather, it is a “fiduciary relationship with respect to

property.” Ditta, 298 S.W.3d at 191 (quoting TEX. PROP. CODE § 111.004(4)).

Consequently, appellant’s argument that the Trust is the “true judgment debtor” for

the purpose of supersedeas misses the mark. The trial court did not enter the modified

permanent injunction against the Trust; it ordered the injunctive relief against

appellant, both individually and as trustee. The provisions that are the subject of

appellant’s Rule 24.4 motion—paragraph (i), compelling the winding-up and

distribution of trust assets, and paragraph (v), requiring a final accounting—either

expressly apply against appellant in “her capacity as trustee” or regard actions that

can be taken by her only as trustee. But neither the trial court’s oral statements at the

supersedeas hearings nor its written order, entered after the supersedeas hearings,

require appellant to secure a supersedeas bond using “her own personal funds.”

Appellant’s contention that the trial court is requiring her individually to

supersede the modified permanent injunction is based on the trial court’s oral

statements at the February 22, 2021, hearing on her motion to set the amount and

type of security. There, the trial court noted the security calculation for the Stocks

required some “give and take” because of their nonliquidity, stating:

[I]t seems to me that if [appellant] wants to maintain this appeal and
she wants to supersede this injunction, then some of this needs to rest
10
 on her in her individual capacity because the permanent injunction was
placed on her in her individual capacity in general. . . .
...

I would not permit [appellant] to use the trust funds to purchase the
surety. She’s going to have to dip into her own - - she’s going to have
to get some skin in the game for herself, and I don’t think that
[is] . . . too punitive and it allows her to do what she’s asking and
requesting to do, which is supersede the enforcement of this injunction.

Read in isolation, this statement appears to contemplate appellant’s personal funds

as collateral for a supersedeas bond. But later in the same hearing, the trial court

clarified that it would allow appellant to use the Stocks—rather than her own

funds—as collateral, noting that so long as any supersedeas bond was for the

requisite amount, it was within the surety’s purview to decide whether the Stocks

were sufficient collateral.

After appellant learned that a surety would not accept the Stocks as collateral,

she asked the trial court to clarify the bond requirements. The transcript of the April

15, 2021 hearing on appellant’s motion to clarify shows that the trial court, again,

did not mandate that appellant use “her own personal funds” as collateral. The trial

court observed that “[t]here are all kinds of ways to get a surety bond,” and posited

that while appellant could elect to “put up her own cash[,]” she could also “get a

surety bond that uses other collateral.”

Likewise, the written supersedeas order issued by the trial court three months

later, on July 20, 2021, did not require appellant to use “her own personal funds” to

11
collateralize a supersedeas bond. As to the Stocks, the supersedeas order provides

only that appellant “must post a good and sufficient bond . . . in the amount of

$435,666.46, which represents the $395,162.32 in value of the Stocks . . . plus

$40,504.14 in interest at the rate of 5% for two years of the estimated duration of the

appeal.” It says nothing with respect to the mechanics of securing a supersedeas

bond. Consequently, we conclude a bond collateralized by appellant’s “own personal

funds” is not a requirement of the supersedeas order, and thus appellant has not

demonstrated an abuse of the trial court’s discretion in this regard.

B. Interest

Appellant also contends that the trial court abused its discretion by including

interest in the amount of security required to suspend enforcement of paragraphs (i)

and (v) of the modified permanent injunction as to the Stocks. We agree.

As stated, the amount of security depends on the type of judgment. See TEX.

R. APP. P. 24.2(a). The modified permanent injunction’s language compelling

appellant to wind-up the Trust and distribute the Trust assets, including the Stocks,

to appellees establishes that appellees’ “recovery” includes “interest[s] in personal

property.” TEX. R. APP. P. 24.2(a)(2). An interest in stocks is personal property. See,

e.g., Brosseau v. Ranzau, 81 S.W.3d 381, 387 (Tex. App.—Beaumont 2002, pet.

denied) (“In Texas, stock is considered personal property[.]”); Griffith v. Jones, 518

S.W.2d 435, 437 (Tex. App.—Tyler 1974, writ ref’d n.r.e.) (“Shares of corporate

12
stock are personal property in the nature of choses in action.”). Consequently, Rule

24.2(a)(2) governs how appellant may supersede the challenged portions of the

modified permanent injunction. See TEX. R. APP. P. 24.2(a)(2); see also Abdullatif,

536 S.W.3d at 55 (applying Rule 24.2(a)(2) to declaratory judgment and noting rule

“does not say that a judgment for recovery of an interest in property must take a

particular form or result from a suit asserting a certain cause of action”).

Rule 24.2(a)(2) “restricts the trial court’s discretion to determine the security

necessary to supersede a judgment for recovery of property.” Id. at 56. It sets the

amount of security. Id. For personal property, the amount of security must be “at

least . . . the value of the property interest on the date when the court rendered

judgment[.]” TEX. R. APP. P. 24.2(a)(2)(B).

Well-settled principles guide us in determining the meaning of this directive:

the same rules of construction apply to rules of procedure and to statutes. Ford Motor

Co. v. Garcia, 363 S.W.3d 573, 579 (Tex. 2012); BASF Fina Petrochemicals Ltd.

P’ship v. H.B. Zachry Co., 168 S.W.3d 867, 871 (Tex. App.—Houston [1st Dist.]

2004, pet. denied). “When a rule of procedure is clear, unambiguous, and specific,

we construe its language according to its literal meaning.” Bradt v. Sebek, 14 S.W.3d

756, 762 (Tex. App.—Houston [1st Dist.] 2000, pet. denied). “The Code

Construction Act applies and, among other things, permits our consideration of the

object sought to be attained, the circumstances under which the rule was enacted,

13
and the consequences of a particular construction.” Huston v. U.S. Bank Nat’l Ass’n,

359 S.W.3d 679, 681 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (citing TEX.

GOV’T CODE §§ 311.002(a)(4), 311.023(1)–(3), (5)). The interpretation of

procedural rules is a legal question and subject to de novo review. In re Christus

Spohn Hosp. Kleberg, 222 S.W.3d 434, 437 (Tex. 2007) (orig. proceeding).

Here, the trial court determined that the value of the Stocks was $395,162.32,

a sum no party disputes. However, in addition to this amount, the trial court required

any supersedeas bond to also include “$40,504.14 in interest at the rate of 5% for

two years for the estimated duration of the appeal.” Citing Rule 24.2 and the Texas

Finance Code, appellant argues that interest may be included in the amount of

security only for money judgments. See TEX. FIN. CODE § 304.003(a) (“A money

judgment of a court of this state . . . earns postjudgment interest at the rate

determined under this section”); TEX. R. APP. P. 24.2(a)(1) (providing when

judgment is for recovery of money, amount of bond must equal sum of compensatory

damages, interest for estimated duration of appeal, and costs). Appellees, on the

other hand, defend the inclusion of interest as serving one purpose of supersedeas

by protecting them against loss or damage the appeal might cause. Referencing Rule

24.2(a)(2)(B)’s language requiring the amount of the security to be “at least . . . the

value of the property interest,” see TEX. R. APP. P. 24.2(a)(2)(B) (emphasis added),

they argue the “fair market value of the Trust securities on the date of the [modified

14
permanent injunction] is only a starting point” from which the trial court could

reasonably require additional amounts to protect against any loss of Stock value

during the appeal.

The only reference in Rule 24.2 to “interest for the estimated duration of the

appeal” is found in the subsection applicable to judgments “[f]or the recovery of

money.” TEX. R. APP. P. 24.2(a)(1). Rule 24.2(a)(1) provides that, “[w]hen the

judgment is for money, the amount of the bond . . . must equal the sum of

compensatory damages awarded in the judgment [and] interest for the estimated

duration of the appeal[.]” Id. (emphasis added). In contrast, the subsection

applicable to judgments “[f]or recovery of property,” which the trial court correctly

determined applies, does not expressly include any provision for interest in the

amount of security. See TEX. R. APP. P. 24.2(a)(2). We must view the omission as

intentional. See, e.g., Fredericksburg Care Co. v. Perez, 461 S.W.3d 513, 520 (Tex.

2015) (noting in statutory construction context that courts should presume legislature

included words intentionally and omitted words purposefully); Huston, 359 S.W.3d

at 681 (instructing rule of procedure must be “read as a whole to ascertain its intent”).

Even assuming without deciding that the phrase “at least” in Rule 24.2(a)(2)

confers the trial court with discretion to require security greater than the value of the

property, the interest required by the trial court here essentially serves as a guarantee

of the Stocks’ performance for the estimated duration of the appeal, or stated

15
differently, security against market volatility. Nothing in Rule 24.2 suggests it is

intended to provide such security for the speculative performance of stock. Cf.

Culbertson v. Brodsky, 775 S.W.2d 451, 454 (Tex. App.—Fort Worth 1989, order)

(construing predecessor to TEX. R. APP. P. 24.2(a)(3) and concluding it was “not the

intent of any part of [the rule] to provide security for speculative damages such as

the potential lost profits claimed by [the judgment creditor]”). To the contrary, such

a construction would be counter to supersedeas’s purpose in maintaining the status

quo, which is the value of the Stocks at the time the trial court entered the modified

permanent injunction. See Smith, 82 S.W.3d at 585 (supersedeas preserves status

quo of matters in litigation as they existed before issuance of judgment from which

appeal is taken). Consequently, we conclude the trial court abused its discretion by

including interest in the amount of security to suspend enforcement of the modified

permanent injunction as to the Stocks.

C. Alternate Security

Appellant also contends the trial court abused its discretion when it refused to

suspend the modified permanent injunction, as to the Stocks, based upon alternate

security. See TEX. R. APP. P. 24.1(a)(4). Appellant proposed two forms of alternate

security: (1) a freeze order and (2) the liquidation of the Stocks and deposit of the

proceeds into the trial court’s registry.

16
 Appellant concedes there is no case law addressing its alternate security

proposals, and we have found none. On the issue of the trial court’s discretion to

order security other than that prescribed in Rule 24.2(a)(2) for judgments for

recovery of property, however, we find our sister court’s opinion in Abdullatif

instructive. See 536 S.W.3d at 54–56. There, the underlying litigation concerned

ownership interests in a limited partnership and a limited liability company which

was the limited partnership’s general partner. Id. at 49–50. The judgment awarded

Ali Choudhri damages and declared his respective ownership interests in the two

entities and the dates on which he obtained the ownership interests. Id. The trial court

signed a supersedeas order, permitting the appellants “to supersede the judgment [in

Choudhri’s favor] with a cash deposit equal to the amount of damages plus

applicable interest.” Id. The order also appointed a Master in Chancery and

“prohibited certain activities by the business entities as further security for Choudhri

pending appeal.” Id. at 50. The prohibited acts included making partnership

distributions to any partner or purported partner, paying or incurring any expenditure

outside the normal course of business without advance approval by the Master in

Chancery, and paying or incurring any capital expenditure of more than $25,000

without the advance approval by the Master in Chancery. Id. at 56. Choudhri filed a

motion with the appellate court arguing that the trial court’s supersedeas order did

not provide sufficient security for the declaratory portion of the judgment. Id.

17
 The Fourteenth Court of Appeals, noting that an interest in a partnership and

a membership interest in a limited liability company are personal property,

concluded that Rule 24.2(a)(2) governed how the appellants could supersede the

declarations. Id. The court also concluded that the appointment of the Master in

Chancery and the prohibitions in the trial court’s supersedeas order were not relevant

to the supersedeas analysis because Rule 24.2(a)(2) “restricts the trial court’s

discretion to determine the security necessary to supersede a judgment for recovery

of property.” Id. The court held: “Under Rule 24.2(a)(2)(B), the trial court abused

its discretion by not determining the value of the property interests it declared had

been assigned to Choudhri and using that value to set the security appellants must

post to supersede the [d]eclarations.” Id.

With the Abdullatif reasoning in mind, we conclude the trial court did not

abuse its discretion by rejecting a freeze order as alternate security. Here, except for

its error in requiring interest to suspend enforcement of the modified permanent

injunction as to the Stocks under Rule 24.2(a)(2)(B), the trial court complied with

the prescribed formula by determining that the value of the Stocks was $395,162.32

on the date it entered the modified permanent injunction. See TEX. R. APP. P.

24.2(a)(2)(B). Considering the potential for the Stocks’ value to change according

to the performance of the stock market—a factor for which the trial court reasonably

expressed concern—a freeze order may or may not provide the minimum security

18
contemplated by Rule 24.2(a)(2). Accordingly, we cannot conclude the trial court

was compelled to order a freeze of the UBS account in which the Stocks are held as

alternate security. See Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex. 1992) (orig.

proceeding) (no abuse of discretion unless trial court could reasonably have reached

only one decision); EnviroPower, 265 S.W.3d at 1 (abuse-of-discretion test depends

on arbitrary or unreasonable action by trial court).

We further conclude the trial court did not abuse its discretion by refusing to

permit the liquidation of the Stocks as alternate security. Such an order would be

inconsistent with paragraph (ii) of the modified permanent injunction, which

prohibits appellant, “individually, and in her capacity as trustee” from “selling,

spending, or otherwise dissipating in any way any assets belonging to the Trust,” a

provision appellant has not addressed in her Rule 24.4 motion.

Still, we are mindful that the real gist of appellant’s complaint is that there is

insufficient collateral to obtain a supersedeas bond in the amount required by the

trial court, thereby prohibiting suspension of enforcement of the modified permanent

injunction as to the Stocks. We construe this complaint as including a challenge to

the bond amount based on substantial economic harm under Rule 24.2(b), which

appellant raised in the trial court and provides:

The trial court must lower the amount of security required by [Rule
24.2](a) to an amount that will not cause the judgment debtor
substantial economic harm if, after notice to all parties and a hearing,
the court finds that posting a bond, deposit, or security in the amount
19
 required by [Rule 24.2](a) is likely to cause the debtor substantial
economic harm.
TEX. R. APP. P. 24.2(b).

Appellant had the burden to prove she would suffer substantial economic

harm if the supersedeas amount was not decreased. In re Nalle Plastics Family Ltd.

P’ship, 406 S.W.3d 168, 170 (Tex. 2013); Drake Interiors, Inc. v. Thomas, 531

S.W.3d 325, 328 (Tex. App.—Houston [14th Dist.] 2017, order). Whether appellant

is likely to suffer substantial economic harm is a question of fact, “which require[s]

a showing both of irreparable harm to [appellant] and that a lesser amount would not

substantially impair [appellees’] ability to recover under the judgment after appellate

remedies [are] exhausted.” In re Nalle Plastics Family Ltd. P’ship, 406 S.W.3d at

170; see also O.C.T.G., L.L.P. v. Laguna Tubular Prods. Corp., 525 S.W.3d 822,

831 (Tex. App.—Houston [14th Dist.] 2017, orig. proceeding) (noting question of

fact). Appellant presented at least some evidence that she could not obtain the bond

ordered by the trial court in the affidavits attached to her motion seeking to clarify

the supersedeas requirement. Because no finding has been made as to whether a

lesser amount of security will avoid substantial economic harm to appellant without

substantially impairing appellees’ ability to recover under the judgment after the

20
appeal is resolved, we will remand for the trial court to take evidence, make findings

under Rule 24.2(b), and enter an appropriate order based on its findings.4

Conclusion

In sum, we conclude the trial court abused its discretion by including in the

amount of security “$40,504.14 in interest at the rate of 5% for two years for the

estimated duration of the appeal.” We therefore grant appellant’s Rule 24.4(a)

motion in part and order that the amount of security be reduced to no more than

$395,162.32, which represents the amount required by Rule 24.2(a)(2) as the

undisputed value of the Stocks at the time the trial court entered the modified

permanent injunction. Because there remains a question on whether the amount of

security required by Rule 24.2(a)(2) is likely to cause appellant substantial economic

harm, we further remand for the trial court take evidence, make findings under Rule

24.2(b), and enter an appropriate order based on its findings. This Court’s stay of

enforcement of the modified permanent injunction will be lifted upon the filing in

this Court of a supplemental clerk’s record containing the order entered by the trial

4
We note the trial court has continuing jurisdiction to handle these matters during the
pendency of the appeal. See TEX. R. APP. P. 24.3(a). In addition, this opinion should
not be read as preventing the parties from reaching an agreement for suspending
enforcement of the modified permanent injunction as to the Stocks. See TEX. R.
APP. P. 24.1(a)(1).
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court, consistent with our opinion. Appellant’s Rule 24.4(a) motion is denied in all

other respects.

Amparo Guerra
Justice

Panel consists of Justices Landau, Guerra, and Farris.

Publish.

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