ACCEPTED 15-24-00133-CV FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS 1/30/2025 4:16 PM No. 15-24-00133-CV CHRISTOPHER A. PRINE CLERK FILED IN IN THE FIFTEENTH COURT OF APPEALS 15th COURT OF APPEALS AUSTIN, TEXAS AUSTIN, TEXAS 1/30/2025 4:16:01 PM CHRISTOPHER A. PRINE Clerk Insight Investments, LLC, Appellant, v.
Stonebriar Commercial Finance, LLC, Appellee.
On Appeal from the 380th District Court, Colin County, Texas Trial Court Cause No. 380-06242-2022 Honorable Benjamin N. Smith, presiding
APPELLANT’S REPLY IN SUPPORT OF MOTION TO REVIEW SUPERSEDEAS ORDER
Thomas C. Wright Mark W. Stout State Bar No. 22059400 State Bar No. 24008096 Rachel H. Stinson Owen C. Babcock State Bar No. 24037347 State Bar No. 24104585 Kyle C. Steingreaber PADFIELD & STOUT, L.L.P. State Bar No. 24110406 100 Throckmorton St, Ste 700 WRIGHT CLOSE & BARGER, LLP Fort Worth, Texas 76102 One Riverway, Suite 2200 817-338-1616 —Telephone Houston, Texas 77056 817-338-1610 —Facsimile (713) 572-4321 (Phone) mstout@padfieldstout.com (713) 572-4320 (Facsimile) obabcock@padfieldstout.com wright@wrightclosebarger.com stinson@wrightclosebarger.com steingreaber@wrightclosebarger.com
Attorneys for Appellant Insight Investments, LLC TO THE HONORABLE FIFTEENTH COURT OF APPEALS:
Rule 24.2(a)(3) leaves little to the imagination: the type and extent
of security necessary to supersede a judgment for equitable relief depends
on the “loss or damage that the appeal might cause” the judgment
creditor. Tex. R. App. P. 24.2(a)(3). It was thus incumbent upon
Stonebriar to prove the “monetary or material losses” it might suffer
because of this appeal, Haedge v. Cent. Tex. Cattlemen’s Ass’n, 603 S.W.3d
824, 828 (Tex. 2020) (per curiam), not simply the perceived value of
Insight’s performance of the un-superseded judgment, cf., e.g., Tex. R.
App. P. 24.2(a)(1). Yet Stonebriar asked the trial court to set the bond at
$5,903,679.08 — the “amount” Stonebriar claimed (without proof) was
“necessary to place [Stonebriar] in its awarded position”1 if Insight
performed under the judgment and “repurchase[d]” the lease from
Stonebriar.2 In signing Stonebriar’s proposed order without awaiting a
response, the trial court ignored Rule 24.2(a)(3)’s clear instructions and
abused its discretion.
1 See Resp., at 15.
2 Exhibit C, Motion to Set Supersedeas Amount.
2 Argument
A. Rule 24.2(a)(3) required that Stonebriar prove the potential “loss or damage” an appeal might cause, not the value of an un-superseded judgment.
To justify the trial court’s conversion of Rule 24.2(a)(3)’s “loss or
damage” standard into a “money value of the judgment” test, Stonebriar
cites two cases: Waterford Lago Vista and EIS Development II. Both cases
actually illustrate Rule 24.2(a)(3)’s proper application and underscore the
trial court’s error.
Stonebriar describes Waterford Lago Vista as a case affirming an
$820,000 bond to supersede a “judgment ordering the judgment debtor to
specifically perform by reducing the price of a contract by $817,000.”3 But
that only tells half the story. The judgment ordered a landowner to
specifically perform a $5.6 million real estate sale, reducing the buyer’s
purchase price by $817,000 for “increased costs due to the delay in
closing.” Waterford Lago Vista, LLC v. Waterford Dev. Partners, L.P., No.
03-24-00027-CV, 2024 WL 3207528, at *1 (Tex. App.—Austin [3rd Dist.]
June 28, 2024, mem. op. & order). So a bond, in Stonebriar’s words,
3 Resp., at 14.
3 “plac[ing] the judgment creditor in its awarded position”4 would have
been millions of dollars. The bond that the court of appeals affirmed
instead aligned with the delay-in-closing costs the buyer already proved
— potential damages attributable to the delay of appeal rather than the
cash value of the judgment.
Nor did EIS Development approve a bond equivalent to the
judgment creditor’s “awarded position.”5 That judgment enjoined a
developer from building houses on 73 residential lots as planned. EIS
Dev. II, LLC v. Buena Vista Area Assoc., 668 S.W.3d 696, 698 (Tex. App.—
El Paso 2022, published order). The trial court allowed the developer to
supersede the judgment with a $250,000 bond after hearing extensive
evidence about “the cost to restore” the land to its undeveloped state if
the developer began construction pending appeal. Id. at 699. Rightly so,
as the trial court correctly considered “cost of restoration” as the
“measure of damages” when damaged land “can be substantially
restored . . . at a reasonable cost[.]” Id. at 703; see also El Caballero
Ranch, Inc. v. Grace River Ranch, L.L.C., No. 04-16-00298-CV, 2016 WL
4 Resp., at 15.
5 See Resp., at 15.
4 4444400, at *6 (Tex. App.—San Antonio Aug. 24, 2016, mem. order)
(holding similarly). Like in Waterford Lago Vista, the bond secured the
judgment creditor against damage that the appellate process itself might
cause rather than the total value of the judgment itself.
Ryan, which Stonebriar ignores, shows that Waterford Lago Vista
and EIS Development are not unique in applying Rule 24.2(a)(3)
according to it terms. There, the judgment awarded the plaintiff
ownership of a “ten-foot strip of property” and ordered the defendant to
remove a carport and driveway encroaching on that property. Ryan v.
Fender, No. 12-21-00242-CV, 2022 WL 2062475, at *1 (Tex. App.—Tyler
June 8, 2022, mem. op.) The trial court did not set the $60,000
supersedeas bond based on the cost of fully removing the carport and
driveway. See id. at *2–3. Instead, it followed 24.2(a)(3)’s command and
focused on the damage that the appeal itself might cause: “because of the
pending appeal, [the plaintiff] cannot exercise her right to do with her
property as desired or take advantage of opportunities and make normal
life decisions, or sell the property.” Id. at *4. Again, securing potential
damages attributable to the appellate process itself.
5 Haedge does not recognize some exception “when the benefit to the
judgment debtor of superseding the judgment” — non-performance — “is
distinct from the harm to judgment creditor” — non-performance.6 Like
Rule 24.2(a)(3) itself, Haedge speaks plainly: “[t]his rule requires
calculating the loss or damage that the judgment creditor . . . faces
during the appeal, not the avoided losses or other benefit that might
accrue to the judgment debtor if the judgment is superseded.” Haedge,
603 S.W.3d at 827 (cleaned up).
It certainly does not create “patently absurd results” to take the
Texas Supreme Court at its word.7 Suppose a judgment requires that the
defendant specifically perform a contract to buy a $100,000 parcel from
the plaintiff. While the defendant appeals, the plaintiff might have to pay
property taxes, insurance, and similar expenses that, except for the
appeal, it would not incur. The trial court can consider those “actual costs
of protecting against loss and maintaining the property as it existed at
the time the trial court issued its judgment” in setting the bond amount
under Rule 24.2(a)(3). See, e.g., Devine v. Devine, No. 07-15-00126, 2015
6 Contra Resp., at 17.
7 Contra Resp., at 17 n.7.
6 WL 5228254, at *4 (Tex. App.—Amarillo Sept. 2, 2015, order) (explaining
same in receivership dispute). That those potential costs might not exist
if the contract to be performed were for the purchase of, say, a lease
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ACCEPTED 15-24-00133-CV FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS 1/30/2025 4:16 PM No. 15-24-00133-CV CHRISTOPHER A. PRINE CLERK FILED IN IN THE FIFTEENTH COURT OF APPEALS 15th COURT OF APPEALS AUSTIN, TEXAS AUSTIN, TEXAS 1/30/2025 4:16:01 PM CHRISTOPHER A. PRINE Clerk Insight Investments, LLC, Appellant, v.
Stonebriar Commercial Finance, LLC, Appellee.
On Appeal from the 380th District Court, Colin County, Texas Trial Court Cause No. 380-06242-2022 Honorable Benjamin N. Smith, presiding
APPELLANT’S REPLY IN SUPPORT OF MOTION TO REVIEW SUPERSEDEAS ORDER
Thomas C. Wright Mark W. Stout State Bar No. 22059400 State Bar No. 24008096 Rachel H. Stinson Owen C. Babcock State Bar No. 24037347 State Bar No. 24104585 Kyle C. Steingreaber PADFIELD & STOUT, L.L.P. State Bar No. 24110406 100 Throckmorton St, Ste 700 WRIGHT CLOSE & BARGER, LLP Fort Worth, Texas 76102 One Riverway, Suite 2200 817-338-1616 —Telephone Houston, Texas 77056 817-338-1610 —Facsimile (713) 572-4321 (Phone) mstout@padfieldstout.com (713) 572-4320 (Facsimile) obabcock@padfieldstout.com wright@wrightclosebarger.com stinson@wrightclosebarger.com steingreaber@wrightclosebarger.com
Attorneys for Appellant Insight Investments, LLC TO THE HONORABLE FIFTEENTH COURT OF APPEALS:
Rule 24.2(a)(3) leaves little to the imagination: the type and extent
of security necessary to supersede a judgment for equitable relief depends
on the “loss or damage that the appeal might cause” the judgment
creditor. Tex. R. App. P. 24.2(a)(3). It was thus incumbent upon
Stonebriar to prove the “monetary or material losses” it might suffer
because of this appeal, Haedge v. Cent. Tex. Cattlemen’s Ass’n, 603 S.W.3d
824, 828 (Tex. 2020) (per curiam), not simply the perceived value of
Insight’s performance of the un-superseded judgment, cf., e.g., Tex. R.
App. P. 24.2(a)(1). Yet Stonebriar asked the trial court to set the bond at
$5,903,679.08 — the “amount” Stonebriar claimed (without proof) was
“necessary to place [Stonebriar] in its awarded position”1 if Insight
performed under the judgment and “repurchase[d]” the lease from
Stonebriar.2 In signing Stonebriar’s proposed order without awaiting a
response, the trial court ignored Rule 24.2(a)(3)’s clear instructions and
abused its discretion.
1 See Resp., at 15.
2 Exhibit C, Motion to Set Supersedeas Amount.
2 Argument
A. Rule 24.2(a)(3) required that Stonebriar prove the potential “loss or damage” an appeal might cause, not the value of an un-superseded judgment.
To justify the trial court’s conversion of Rule 24.2(a)(3)’s “loss or
damage” standard into a “money value of the judgment” test, Stonebriar
cites two cases: Waterford Lago Vista and EIS Development II. Both cases
actually illustrate Rule 24.2(a)(3)’s proper application and underscore the
trial court’s error.
Stonebriar describes Waterford Lago Vista as a case affirming an
$820,000 bond to supersede a “judgment ordering the judgment debtor to
specifically perform by reducing the price of a contract by $817,000.”3 But
that only tells half the story. The judgment ordered a landowner to
specifically perform a $5.6 million real estate sale, reducing the buyer’s
purchase price by $817,000 for “increased costs due to the delay in
closing.” Waterford Lago Vista, LLC v. Waterford Dev. Partners, L.P., No.
03-24-00027-CV, 2024 WL 3207528, at *1 (Tex. App.—Austin [3rd Dist.]
June 28, 2024, mem. op. & order). So a bond, in Stonebriar’s words,
3 Resp., at 14.
3 “plac[ing] the judgment creditor in its awarded position”4 would have
been millions of dollars. The bond that the court of appeals affirmed
instead aligned with the delay-in-closing costs the buyer already proved
— potential damages attributable to the delay of appeal rather than the
cash value of the judgment.
Nor did EIS Development approve a bond equivalent to the
judgment creditor’s “awarded position.”5 That judgment enjoined a
developer from building houses on 73 residential lots as planned. EIS
Dev. II, LLC v. Buena Vista Area Assoc., 668 S.W.3d 696, 698 (Tex. App.—
El Paso 2022, published order). The trial court allowed the developer to
supersede the judgment with a $250,000 bond after hearing extensive
evidence about “the cost to restore” the land to its undeveloped state if
the developer began construction pending appeal. Id. at 699. Rightly so,
as the trial court correctly considered “cost of restoration” as the
“measure of damages” when damaged land “can be substantially
restored . . . at a reasonable cost[.]” Id. at 703; see also El Caballero
Ranch, Inc. v. Grace River Ranch, L.L.C., No. 04-16-00298-CV, 2016 WL
4 Resp., at 15.
5 See Resp., at 15.
4 4444400, at *6 (Tex. App.—San Antonio Aug. 24, 2016, mem. order)
(holding similarly). Like in Waterford Lago Vista, the bond secured the
judgment creditor against damage that the appellate process itself might
cause rather than the total value of the judgment itself.
Ryan, which Stonebriar ignores, shows that Waterford Lago Vista
and EIS Development are not unique in applying Rule 24.2(a)(3)
according to it terms. There, the judgment awarded the plaintiff
ownership of a “ten-foot strip of property” and ordered the defendant to
remove a carport and driveway encroaching on that property. Ryan v.
Fender, No. 12-21-00242-CV, 2022 WL 2062475, at *1 (Tex. App.—Tyler
June 8, 2022, mem. op.) The trial court did not set the $60,000
supersedeas bond based on the cost of fully removing the carport and
driveway. See id. at *2–3. Instead, it followed 24.2(a)(3)’s command and
focused on the damage that the appeal itself might cause: “because of the
pending appeal, [the plaintiff] cannot exercise her right to do with her
property as desired or take advantage of opportunities and make normal
life decisions, or sell the property.” Id. at *4. Again, securing potential
damages attributable to the appellate process itself.
5 Haedge does not recognize some exception “when the benefit to the
judgment debtor of superseding the judgment” — non-performance — “is
distinct from the harm to judgment creditor” — non-performance.6 Like
Rule 24.2(a)(3) itself, Haedge speaks plainly: “[t]his rule requires
calculating the loss or damage that the judgment creditor . . . faces
during the appeal, not the avoided losses or other benefit that might
accrue to the judgment debtor if the judgment is superseded.” Haedge,
603 S.W.3d at 827 (cleaned up).
It certainly does not create “patently absurd results” to take the
Texas Supreme Court at its word.7 Suppose a judgment requires that the
defendant specifically perform a contract to buy a $100,000 parcel from
the plaintiff. While the defendant appeals, the plaintiff might have to pay
property taxes, insurance, and similar expenses that, except for the
appeal, it would not incur. The trial court can consider those “actual costs
of protecting against loss and maintaining the property as it existed at
the time the trial court issued its judgment” in setting the bond amount
under Rule 24.2(a)(3). See, e.g., Devine v. Devine, No. 07-15-00126, 2015
6 Contra Resp., at 17.
7 Contra Resp., at 17 n.7.
6 WL 5228254, at *4 (Tex. App.—Amarillo Sept. 2, 2015, order) (explaining
same in receivership dispute). That those potential costs might not exist
if the contract to be performed were for the purchase of, say, a lease
contract does not shock the conscience — it shows that the judgment
creditor cannot prove the potential harm or loss Rule 24.2(a)(3) requires
for anything but a nominal bond.
Indeed, context confirms that the rules drafters know how to say it
when they intend to tie supersedeas to a judgment’s money value. Of
course, when a rule “uses a word or phrase” in some places but not others,
“the term should not be implied where it has been excluded.” See Cadena
Comercial USA Corp. v. TABC, 518 S.W.3d 318, 329 (Tex. 2017); accord
Mendell v. Scott, No. 01-20-00578-CV, 2022 WL 2951666, at *6 (Tex.
App.—Houston [1st Dist.] July 26, 2022, order) (applying same principle
to Rule 24.2). Rule 24.2(a) explicitly contemplates two situations where
the bond must align with the judgment’s value — bonding a money
judgment under Rule 24.2(a)(1) generally requires an amount equal to
“the sum of compensatory damages awarded[,]” interest, and costs, while
Rule 24.2(a)(2) requires security “at least” equal to “the value of the
property interest” when a judgment awards an interest in personal
7 property. Tex. R. App. P. 24.2(a)(1)–(2). By tying relief here to “loss or
damage that the appeal might cause” the judgment creditor, id.
24.2(a)(3), Rule 24(a)(3) contemplates something different.
Also consider why supersedeas exists in the first place: to “preserve
the status quo of the matters in litigation as they existed before the
issuance of the judgment from which an appeal is taken.” Devine, 2015
WL 5228254, at *3. At bottom, the pre-judgment status quo in a specific-
performance case is an unperformed contract. So while a bond under Rule
24.2(a)(3) might properly protect against ancillary costs and expenses
flowing from the delayed performance an appeal might “cause[,]” see Tex.
R. App. P. 24.2(a)(3), it cannot act as a conduit for putting the plaintiff in
its “awarded position[.]”8 The latter is by definition a change in the pre-
judgment status quo.
In the end, caselaw, context, and purpose support Rule 24.2(a)(3)’s
plain language: the security necessary to supersede a non-money
judgment that does not award title to property turns on the “loss or
8 Contra, e.g., Resp., at 15.
8 damage that the appeal might cause” the judgment creditor, Tex. R. App.
P. 24.2(a)(3), not the value of the un-superseded judgment.
B. A nearly $6-million bond to secure the repurchase of a non- existent contract violates Rule 24.2(a)(3).
Considered against the proper legal framework, the trial court both
acted “without reference to guiding rules or principles” and made a
decision “lacking support in the facts or circumstances of the case,” see
Samlowski v. Wooten, 332 S.W.3d 404, 410 (Tex. 2011), in setting the
bond at $5,903,679.08 — the “amount[,]” according to Stonebriar,
“required to repurchase the Equipment Lease Agreement[.]” The trial
court abused its discretion.
Begin by defining the pre-judgment status quo. Cf. Devine, 2015 WL
5228254, at *3–4.9 The “Equipment Lease Agreement” ceased to exist
before the judgment was signed. A bidder in Legacy’s bankruptcy bought
all of the leased equipment and the “Equipment Lease Agreement” —
with the bankruptcy court’s approval — was extinguished.10 Thus,
9 True enough, these issues overlap with the merits of Insight’s appeal to some degree.
See Resp., at 8–11. But they matter here nonetheless because they inform the pre- judgment status quo, which in turn guides the propriety of a Rule 24.2(a)(3) supersedeas bond. 10 See Mot., at 21–22.
9 Insight did not and could not pay money to Stonebriar to buy back the
“Equipment Lease Agreement.”
Then consider the evidence offered to justify the bond amount.
Stonebriar’s evidence comes down to a single sentence in a declaration:
“the amount required to repurchase the Equipment Lease Agreement
equals $5,903,679.08[.]” But the claimed value to Stonebriar of the as-
awarded judgment simply is not a potential “harm or loss” that Rule
24.2(a)(3) recognizes, and the company offered no evidence of — or even
tried to argue —a potential injury that the rule does recognize.11
Against that backdrop, a nominal bond is mandatory, a point Qatar
Foundation illustrates. In that case, the trial court had to set a nominal
bond under Rule 24(a)(3) in the absence of “evidence of any harm” the
other party “would suffer from a stay during the pendency of the appeal.”
Qatar Found. for Educ., Science & Cmty. Dev. v. Paxton, No. 03-20-00129-
11 See Resp., at 17–18. Under the circumstances, Insight preserved error in the trial
court’s consideration of Wilkinson’s flawed declaration. The trial court granted Stonebriar’s motion without notice or a hearing, robbing Insight of its ability to object prior to the trial court’s ruling. No party expected that sua sponte ruling either — the parties only learned about it while discussing hearing dates with the court. Insight complied with Rule 33.1(a) by filing its objection as soon as it learned of the adverse ruling, which again, was made without notice or opportunity to be heard. It would violate fundamental principles of due process to apply Rule 33.1(a) otherwise in this case.
10 CV, 2020 WL 6269267, at *3 (Tex. App.—Austin Oct. 22, 2020, order). As
in our case.
Conclusion
The Court should set aside the flawed supersedeas order entirely
and order that Insight need post no more security beyond its original
$500 bond. Alternatively, the Court should either carry this motion with
the appeal or remand the supersedeas issue to the trial court to hold an
evidentiary hearing on the motion to set the bond amount. Insight also
asks for all other relief to which it may be entitled at law and in equity.
***
11 Respectfully submitted,
/s/ Rachel H. Stinson Thomas C. Wright State Bar No. 22059400 Rachel H. Stinson State Bar No. 24037347 Kyle C. Steingreaber State Bar No. 2410406 WRIGHT CLOSE & BARGER, LLP One Riverway, Suite 2200 Houston, Texas 77056 (713) 572-4321 - Telephone (713) 572-4320 - Facsimile wright@wrightclosebarger.com stinson@wrightclosebarger.com steingreaber@wrightclosebarger.com
Counsel for Appellant Insight Investments, LLC
CERTIFICATE OF SERVICE
On January 30, 2025, true and correct copies of this reply were forwarded to all counsel of record, via e-service, by transmitting to the undersigned’s electronic service provider.
/s/Kyle C. Steingreaber Kyle C. Steingreaber
12 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.
Tracy Stubblefield on behalf of Rachel Hope Stinson Bar No. 24037347 stubblefield@wrightclose.com Envelope ID: 96811770 Filing Code Description: Other Document Filing Description: 250130 Appellant's Reply in Support of Motion for Review of Supersedeas Bond Status as of 1/30/2025 4:23 PM CST
Associated Case Party: Stonebriar Commercial Finance, LLC
Name BarNumber Email TimestampSubmitted Status
Rachel H.Stinson stinson@wrightclosebarger.com 1/30/2025 4:16:01 PM SENT
Thomas C.Wright wright@wrightclosebarger.com 1/30/2025 4:16:01 PM SENT
Kyle Steingreaber steingreaber@wrightclosebarger.com 1/30/2025 4:16:01 PM SENT
Associated Case Party: Insight Investments, LLC
Name BarNumber Email TimestampSubmitted Status
LeElle Slifer 24074549 lslifer@winston.com 1/30/2025 4:16:01 PM SENT
Dylan French dfrench@winston.com 1/30/2025 4:16:01 PM SENT
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Houston Docketing ecf_houston@winston.com 1/30/2025 4:16:01 PM SENT
Newman Nahas NNahas@winston.com 1/30/2025 4:16:01 PM SENT