Pedernales Electric Cooperative, Inc. v. Samuel S. White, Janette Barlow, Gregory Colon, and Stephanie Colon

• Court: Court of Appeals of Texas
• Decided: February 4, 2021
• Docket: 03-21-00034-CV
• Status: Published

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-21-00034-CV

Pedernales Electric Cooperative, Inc., Appellant

v.

Samuel S. White, Janette Barlow, Gregory Colon, and Stephanie Colon, Appellees

FROM THE COUNTY COURT AT LAW NO. 2 OF HAYS COUNTY, NO. 19-1250-C, THE HONORABLE ROBERT UPDEGROVE, JUDGE PRESIDING

ORDER AND MEMORANDUM OPINION

PER CURIAM

Appellant Pedernales Electric Cooperative, Inc. (PEC) has filed an “Emergency

Motion to Permit Appellant to Supersede Temporary Injunction and Set a Supersedeas Bond, or

Alternatively, to Stay Temporary Injunction Pending Appeal.” PEC requests that we allow it to

supersede the trial court’s January 11, 2021 order granting appellees’ application for a temporary

injunction by posting a nominal $1,000 bond, pursuant to Texas Rule of Appellate Procedure

24.2(a)(3), or alternatively, that we stay the temporary injunction under Texas Rule of Appellate

Procedure 29.3, pending our disposition of the interlocutory appeal. Appellees (the

“Landowners”) opposed PEC’s motion filed in the trial court for a supersedeas bond and initially

opposed the relief requested by PEC in the emergency motion filed with this Court. The

Landowners subsequently submitted a response indicating that they are not opposed to this Court allowing PEC to post a supersedeas bond in the nominal amount of $1,000 to suspend

enforcement of the temporary injunction. We grant PEC’s motion in part and abate the appeal

for the reasons explained below.

BACKGROUND

The Landowners brought the underlying suit against PEC, a member-owned

electric cooperative, in September 2019, alleging that PEC exceeded the scope of an existing

easement when it upgraded the capacity of an electric-power transmission line that crosses over

the Landowners’ properties and extends from the Highway 32 substation to the Wimberley

substation. According to the Texas Public Utility Commission’s March 2018 order approving

the capacity-upgrade project, the transmission line is the primary source of electricity for the

Wimberley area and also provides a backup source of power for adjacent substations, including

the Dripping Springs, Rutherford, Highway 32, and Fischer substations. PEC completed all

work on the capacity-upgrade project that required entry on the Landowner’s properties in

November 2019, and the transmission line was energized in December 2019. The temporary

injunction issued by the trial court prohibits PEC from (1) continuing work on the capacity-

upgrade project on the Landowners’ properties in Hays County (the trial court found that work

was ongoing at the time of the temporary-injunction hearing), (2) operating the transmission line

at its upgraded capacity, and (3) accessing the Landowners’ properties for maintenance or

operations in connection with the capacity-upgrade project. Even though PEC had requested that

the trial court set a supersedeas-bond amount at the hearing on the form of the temporary-

injunction order, the trial court did not include a bond amount in the temporary injunction—

implicitly denying PEC’s request for supersedeas relief. To date, the trial court has not ruled on

PEC’s subsequent motions to set a bond amount and to rule on its pending motions. Instead, the

2 trial court stayed its temporary injunction for a period of forty-five days to allow PEC to seek

relief from this Court.

The trial court initially conducted a temporary-injunction hearing on November

25, 2019, and then conducted a hearing on the form of the order on September 28, 2020, before

entering the January 11, 2021 temporary injunction. At the initial hearing, PEC offered

testimony from a PEC employee who explained the impact both operationally and financially on

its provision of electric power to Wimberley if it is required to undo the work done to upgrade

the line’s capacity and restore the transmission line back to providing the lower voltage that it

provided before the upgrade project. The impact on PEC’s members would include the

possibility of rolling blackouts that would affect not only its residential members, but also its

commercial members, schools, and emergency-response facilities, and the cost of restoring the

line to its prior capacity would be approximately $4 million. Instead of requiring PEC to undo

the work it had already completed, the proposed order submitted by the Landowners and

addressed at the September 2020 hearing requested the lesser relief of requiring PEC to stop

using or operating the upgraded transmission line. In response, at the hearing, PEC offered to

present an employee witness whose testimony would explain what would be involved

operationally for PEC to comply with an order requiring it to cease use of the transmission line

and the effects of such an order on the electricity sources to the Wimberley community. The trial

court indicated that the additional testimony would not be necessary because if PEC posted an

appeal bond, there would not be any disruption of services. PEC’s counsel suggested that a

nominal bond of $1,000 for PEC would be appropriate, and the Landowners’ counsel stated, “we

have no problem with a nominal [supersedeas] bond for PEC provided PEC has no problem with

a nominal [injunction] bond for us.” However, while the trial court’s temporary injunction

3 required the Landowners to pay a $1,000 cash bond to the trial-court clerk, as required by Texas

Rule of Civil Procedure 684, the order is silent on the matter of a supersedeas bond.

LEGAL FRAMEWORK

Unless the law or the Texas Rules of Appellate Procedure provide otherwise, a

judgment debtor is entitled to supersede a judgment and thus defer its enforcement while

pursuing an appeal. See Tex. R. App. P. 24.1; see also Miga v. Jensen, 299 S.W.3d 98, 100

(Tex. 2009). The purpose of supersedeas is 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. See, e.g.,

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

We review a trial court’s ruling on supersedeas for an abuse of discretion. See

Tex. R. App. P. 29.2 (establishing standard of review for trial court’s refusal to permit appellant

to supersede interlocutory order); see also id. R. 24.4(a). A trial court abuses its discretion when

it renders an arbitrary and unreasonable decision lacking support in the facts or circumstances of

the case, or when it acts in an arbitrary or unreasonable manner without reference to guiding

rules or principles. Samlowski v. Wooten, 332 S.W.3d 404, 410 (Tex. 2011). On a party’s

motion, we may review: (1) the sufficiency or excessiveness of the amount of security, (2) the

sureties on a bond, (3) the type of security, (4) the determination whether to permit suspension of

enforcement, and (5) the trial court’s exercise of discretion when ruling on the amount and type

of security and the sufficiency of sureties. See Tex. R. App. P. 24.4(a). We may require that the

amount of a bond be increased or decreased and that another bond be provided and approved by

the trial-court clerk. See id. R. 24.4(d). We may also require other changes in the trial court’s

4 order and remand to the trial court for entry of findings of fact or for the taking of evidence. See

id.

Rule 24.2(a)(3) governs the supersedeas issue in this appeal because the

temporary injunction is a judgment “for something other than money or an interest in property.”

Although the underlying issue in the lawsuit is the scope of PEC’s easement, the temporary

injunction itself requires PEC to refrain from (1) further work on the transmission line, (2) using

or operating the transmission line at the upgraded capacity, and (3) accessing the Landowners’

properties to maintain or operate the transmission line. The temporary injunction does not

resolve the issue of the scope of PEC’s easement, and thus it is not a judgment “for the recovery

of an interest in real or personal property,” which would be governed by Rule 24.2(a)(2).

Under Rule 24.2(a)(3), “the trial court must set the amount and type of security

that the judgment debtor [here, PEC] must post. The security must adequately protect the

judgment creditor [here, the Landowners] against loss or damage that the appeal might cause.”

(Emphasis added.) However, “the trial court may decline to permit the judgment to be

superseded if [the Landowners] post[] security ordered by the trial court in an amount and type

that will secure [PEC] against any loss or damage caused by the relief granted [i.e., the

temporary injunction] to [the Landowners] if an appellate court determines, on final disposition,

that the relief was improper.” Id. R. 24.2(a)(3). When the trial court declines to permit a

judgment to be superseded because the judgment creditor posts a bond, the judgment creditor’s

bond is referred to as a “counter-supersedeas bond.” See, e.g., WC 1st & Trinity, LP v. Roy F. &

JoAnn Cole Mitte Found., No. 03-19-00905-CV, 2020 WL 544748, at *2 (Tex. App.—Austin

Feb. 3, 2020, no pet.) (order and mem. op.).

5 ANALYSIS

Under Rule 24.2(a)(3), the trial court abused its discretion by refusing to permit

PEC to supersede the judgment. Absent the posting of a counter-supersedeas bond by the

Landowners, the trial court “must set the amount and type of security” that PEC must post to

supersede the judgment. See Tex. R. App. P. 24.2(a)(3); see also id. R. 24.1. The record before

the trial court reflects that the Landowners did not request that they be allowed to file a counter-

supersedeas bond either at the September 2020 hearing or in their response opposing PEC’s trial-

court motions for supersedeas bond. We agree that under the circumstances of this case, and in

particular given the non-quantifiable public interest involved in the continued provision of

electric-power transmission to PEC’s Wimberley members, it would be an abuse of discretion for

the trial court to allow the Landowners to counter-supersede the temporary injunction. See id. R.

24.4(1)(4) (establishing that appellate court may review trial court’s determination whether to

permit suspension of enforcement of judgment).

Under Rule 29.3, an “appellate court must not suspend the trial court’s

[interlocutory] order if the appellant’s rights would be adequately protected by supersedeas or

another order made under Rule 24.” We note that in response to PEC’s request that it be allowed

to supersede the temporary injunction, the Landowners presented no evidence to quantify “the

loss or damage that the appeal might cause.”1 Id. R. 24.2(a)(3) (emphasis added). In fact, they

acknowledged at the trial-court hearing and in their response to PEC’s emergency motion that

allowing PEC to post a nominal bond of $1,000 would be appropriate. On this record, we

1 We further note that the transmission line has been operating at its upgraded capacity since December 2019, and the Landowners presented no evidence at the September 2020 hearing to quantify any damage suffered since the upgrade was completed.

6 conclude that PEC’s right to supersede the judgment would be adequately protected if the trial

court allows it to post a nominal bond in the amount of $1,000.

Accordingly, we abate this appeal and remand the case to the trial court for the

entry of an order requiring PEC to post a supersedeas bond in the amount of $1,000. See id. R.

24.4(d) (establishing that appellate court may require changes in trial court’s order on

supersedeas). The trial court’s January 11, 2021 order granting appellees’ application for a

temporary injunction is stayed in part, pending further order of this Court. See id. R. 24.4(c)

(“The appellate court may issue any temporary orders necessary to preserve the parties’ rights”

in connection with its review of the trial court’s ruling on supersedeas.). We stay all provisions

of the temporary injunction, except for the provision setting the matter for trial and hearing on

the permanent injunction on March 3, 2021, at 9:30 a.m. See Tex. Civ. Prac. & Rem. Code

§ 51.014(a)(4) (allowing interlocutory appeal from grant of temporary injunction), (b) (providing

for automatic stay of commencement of trial in trial court pending resolution of interlocutory

appeal, “other than an appeal under Subsection (a)(4)” (emphasis added)).

The parties are ordered to file a joint status report with this Court concerning the

status of the trial-court proceedings or a motion to reinstate the appeal on or before March 22,

2021.

It is so ordered on February 4, 2021.

Before Justices Goodwin, Triana, and Kelly

Abated and Remanded

Filed: February 4, 2021