in Re Miguel Zaragoza Fuentes and in Re Elsa Esther Carrillo Anchondo and Eagle Ridge Properties, LLC, Relators , 530 S.W.3d 244 ( 2017 )

Opinion issued July 27, 2017
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-16-00952-CV
———————————
IN RE MIGUEL ZARAGOZA FUENTES, Relator
and
IN RE ELSA ESTHER CARRILLO ANCHONDO AND EAGLE RIDGE
PROPERTIES, LLC, Relators
Original Proceedings on Petitions for Writ of Mandamus
OPINION
In this original proceeding, the relators seek relief from the trial court’s denial
of their requests to enforce a supersedeas bond, which was filed to stay execution of
a divorce decree while that decree is on appeal.1
The trial court’s divorce decree between Miguel Fuentes and Evangelina
Lopez Guzman Zaragoza awarded Evangelina three residential properties in El Paso,
Texas, in addition to other property and money. Miguel and several third parties
have appealed the decree, and their appeal is pending in our court. See Miguel
Zaragoza Fuentes, et. al. v. Evangelina Lopez Guzman Zaragoza, Case No. 01-16-
00251-CV (Tex. App.—Houston [1st Dist.]). Miguel posted a bond to supersede the
judgment. Before the divorce decree was final and before Miguel posted the bond,
Evangelina filed a copy of the decree in the El Paso County real property records
and took possession of the three properties awarded to her. Her possession of these
properties became the source of the present ancillary dispute.
Miguel moved the trial court to enforce the supersedeas bond, claiming that
Evangelina’s continued possession of the properties violates the bond. When the trial
court denied that relief, Miguel filed a motion seeking enforcement of the bond and
a petition for a writ of mandamus with this court. Third party appellants Elsa Esther
Carrillo Anchondo and her wholly owned company, Eagle Ridge Properties, LLC,
filed similar requests for relief.
1
The underlying case is In the Matter of the Marriage of Evangelina Lopez
Guzman Zaragoza and Miguel Zaragoza Fuentes, et al., cause number 2014–
30215, pending in the 245th District Court of Harris County, the Honorable
Roy L. Moore presiding.
2
Miguel and the Carillo relators request that this court enforce the supersedeas
bond and order that Evangelina (1) withdraw her El Paso County filings and (2)
surrender physical possession of the properties pending appeal. We deny the motions
filed in the appeal as moot and consider the requests as petitions for writ of
mandamus. We conditionally grant the petitions.
Background
Evangelina petitioned for divorce against Miguel in Harris County, Texas in
May 2014. On December 21, 2015, the trial court signed its final decree of divorce.
2
Although titled in Eagle Ridge’s name, the trial court’s findings of fact and
conclusions of law in the divorce proceeding attribute ownership of three residential
properties in El Paso County to Miguel. In the decree, the trial court determined that
the El Paso properties were part of Miguel and Evangelina’s marital estate, and it
awarded the properties to Evangelina. The decree states that it may “serve as a
muniment of title to transfer ownership of all property awarded to any party in this
Final Decree of Divorce.”
2
Evangelina asserts that a final judgment was rendered when the trial court
orally pronounced judgment at the close of trial on November 5, 2015. As
explained in our March 14, 2017 order denying Evangelina’s motion to
dismiss the appeals brought by the Carillo relators and others as intervenors,
the judgment was not final until the written decree was issued on December
23, 2015. See Fuentes v. Zaragoza, No. 01-16-00251-CV, 2017 WL 976079,
at *2 (Tex. App.—Houston [1st Dist.] Mar. 14, 2017, order). We denied
Evangelina’s subsequent motion for rehearing.
3
Ownership of the El Paso properties before the decree
Before the trial court signed the final decree, the Carillo relators and other
third parties petitioned to intervene in the case, claiming that Evangelina was
improperly seeking to have property they owned considered as marital assets to
distribute as marital property in the divorce. See Fuentes v. Zaragoza, 2017 WL
976079, at *1. In particular, they claimed that the El Paso properties are owned by
Eagle Ridge, a company that, in turn, is owned solely by Carillo, and not by Miguel.
They assert that, before the divorce decree was signed, Eagle Ridge was the owner
of record in the El Paso real property records and the properties were occupied by
Carillo and her family.
Transfer pursuant to the decree
After the trial court signed the decree, Evangelina filed it with the El Paso
county clerk two days later, on December 23, 2015, claiming it as a muniment of
title for the El Paso properties. Five days later, on December 28, 2015, Evangelina
took physical possession of the properties from Carillo. Evangelina did not obtain a
writ of execution or a writ of forcible entry and detainer before seizing the properties.
Evangelina’s actions were immediately challenged. On December 30, 2015,
the Carillo relators filed a pleading in the trial court seeking a temporary restraining
order and a temporary injunction for wrongful execution. The Carillo relators
claimed that Evangelina had violated Texas Rule of Civil Procedure 627 by filing
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the decree in the property records and taking possession of those properties less than
30 days after issuance of the decree. See TEX. R. CIV. P. 627 (providing that
execution on judgment may not issue until “after the expiration of thirty days from
the time a final judgment is signed”).
The next day, the trial court issued a temporary restraining order, reciting that
“execution has begun to occur within 30 days of the signing of the Final Judgment
without application under TRCP 628.” The following week, the court held a hearing
on the Carillo relators’ wrongful execution claim. It denied their request for a
temporary injunction, explaining that it believed it lacked authority to grant the relief
requested:
I thought I had made a finding or a statement on the record that whether
you call it an execution or a [muniment] of title, I do not believe that
was proper, but I do not believe sitting here in Harris County that I have
any authority to order people in El Paso County to do anything . . . .
The Carillo relators did not appeal the trial court’s interlocutory order. See TEX. CIV.
PRAC. & REM. CODE § 51.014(a)(4) (authorizing appeal of interlocutory order that
“grants or refuses a temporary injunction”).
The Carillos relators, however, obtained a temporary restraining order from
the El Paso District Court the next day. That temporary restraining order took the El
Paso properties from Evangelina’s possession. The parties ultimately agreed to place
the properties in the possession of a court-appointed receiver while the case
proceeded in the El Paso court.
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Meanwhile, the trial court set the supersedeas bond at $278.3 million, and
Miguel appealed that order. Our court reversed the order and ordered that the bond
be set at $25 million. See Fuentes v. Zaragoza, No. 01-16-00251-CV, 2016 WL
3023811, at *1 (Tex. App.—Houston [1st Dist.] May 26, 2016, order). Miguel
posted a $25 million supersedeas bond with the Harris County District Clerk. A few
months later, the Carillo relators moved to nonsuit their claims in the El Paso District
Court.
On October 14, 2016, the El Paso court issued an order dismissing the case,
dissolving the receivership, and ordering the receiver to return the keys to the El
Paso Properties to Evangelina. On the same day, the Carillo relators filed a notice of
lis pendens on the El Paso properties.
Course of proceedings
The Carillo relators then moved in the trial court for a writ of supersedeas and
accompanying orders that would suspend Evangelina’s enforcement of the divorce
decree while it was pending on appeal. The Carillo relators alleged that Evangelina
violated Rule 627 by filing the decree in the El Paso County real property records
and taking possession of the property before the divorce decree became final. See
TEX. R. CIV. P. 627 (allowing for clerk of court to issue writs of execution “after the
expiration of thirty days from the time a final judgment is signed”). The Carillo
relators further alleged that, even after the supersedeas bond had been issued,
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“Evangelina was permitted by the 41st District Court of El Paso County to take
possession of Eagle Ridge’s El Paso real properties in reliance on this Court’s Final
Decree.” The Carillo relators argued that, because a supersedeas bond had been filed,
the trial court should “issue a writ of supersedeas to halt Evangelina’s unlawful
execution on the basis of her impermissibly filed muniment of title.”
Miguel filed a similar motion in the trial court. In it, Miguel expressly
disclaimed ownership of the El Paso properties but explained that he had filed his
motion in case the Carillo relators were found to lack standing to enforce the
supersedeas bond themselves. Miguel’s motion asked the trial court to enforce the
supersedeas bond; issue a writ of supersedeas directing those executing on the
judgment to halt their ongoing execution against the properties; order Evangelina to
withdraw the “muniment of title” from the El Paso County’s real property record;
and order her to cease execution efforts as to the El Paso properties.
The trial court heard the motions and subsequently issued an order restraining
Evangelina from selling the El Paso Properties “during the pendency of Intervenors’
appeal,” but it denied the motions in all other respects.
Discussion
Miguel and the Carillo relators seek mandamus relief from the trial court’s
order denying their request for enforcement of the supersedeas bond.
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I. Standard of review
To be entitled to mandamus relief, a relator must demonstrate that (1) the trial
court clearly abused its discretion and (2) the relator has no adequate at law, such as
an appeal. See In re Dana Corp., 138 S.W.3d 298, 301 (Tex. 2014) (orig.
proceeding). A relator bears the burden of proving both requirements. See Walker v.
Packer, 827 S.W.2d 833, 840 (Tex. 1992). A trial court abuses its discretion if it
reaches a decision that amounts to a clear and prejudicial error of law or if it clearly
fails to analyze the law correctly or apply the law correctly to the facts. In re
Cerberus Capital Mgmt. L.P., 164 S.W.3d 379, 382 (Tex. 2005).
II. Analysis
The petitions in these cases request similar relief arising from Miguel’s
posting of a supersedeas bond: that we direct the trial court to issue an order
“suspending all of Ms. Zaragoza’s enforcement efforts—including her muniment of
title and ongoing possession of the El Paso Properties—and . . . restor[ing] the
properties to Eagle Ridge and Ms. Carrillo for the duration of the appeal.”3 Miguel
3
Miguel also requests a temporary order precluding Evangelina “from
attempting to sell, transfer, or otherwise dispose of the El Paso Properties
pending the Court’s resolution on this matter.” This request is moot because
the trial court ordered that the El Paso properties not be sold during the
pendency of the Carillo relators’ appeals. Although Miguel notes that
Evangelina moved to dismiss the Carillo relators’ appeals and could seek to
sell the properties if the appeals are dismissed, our court denied the motion to
dismiss as well as Evangelina’s subsequent motion for rehearing. See Fuentes
v. Zaragoza, 2017 WL 976079, at *3.
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further requests that we direct the trial court to “halt Evangelina’s unlawful
execution on the basis of her impermissibly-filed muniments of title to the El Paso
properties.” Evangelina responds that (1) res judicata bars the relief sought in the
petitions; and (2) Miguel’s posting of a supersedeas bond has no effect on the El
Paso properties because she had completed her execution on these properties before
Miguel posted the bond.
We first address Evangelina’s res judicata claim. Concluding that res judicata
does not apply, we then turn to whether the subsequent posting of the supersedeas
bond applies to suspend Evangelina’s execution upon the properties that occurred
before Miguel posted the bond.
A. Res judicata does not bar enforcement of the bond.
As an initial matter, Evangelina contends that res judicata bars Miguel and the
Carillo relators’ requests because they rest upon claims of wrongful execution that
the trial court rejected when it denied the Carillo relators’ request for a temporary
injunction staying execution of the decree.
For res judicata to apply, there must be: (1) an earlier final judgment on the
merits by a court of competent jurisdiction; (2) identity of the parties; and (3) a
second action based on the same claims that were raised or could have been raised
in the first action. See Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex.
1996). This case lacks the first element. Specifically, the trial court did not address
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the merits of the Carillo relators’ wrongful execution claims; rather, the court denied
an interlocutory request for a temporary injunction because it believed it lacked
jurisdiction to grant relief:
THE COURT: I thought I had made a finding or a statement on the
record that whether you call it an execution or a muniment of title, I do
not believe that was proper, but I do not believe sitting here in Harris
County that I have any authority to order people in El Paso County to
do anything . . . .
Because the trial court did not resolve the merits of the Carillo relators’ claim for
wrongful execution, res judicata does not apply. See Li v. Univ. of Tex. Health Sci.
Ctr. at Houston, 01-00-01135-CV, 2002 WL 992400, at *3 (Tex. App.—Houston
[1st Dist.] May 16, 2002, pet. denied) (“Because a dismissal for lack of jurisdiction
is not a ruling on the merits, it cannot constitute a res judicata bar.”). Moreover, the
trial court’s order denying relief was not a final judgment. See Amstadt, 919 S.W.2d
at 652. “Texas law is clear that, generally, a trial court’s ruling on a temporary
injunction (or other interlocutory judgment) does not support the defense of res
judicata.” Glattly v. Air Starter Components, Inc., 332 S.W.3d 620, 637 (Tex.
App.—Houston [1st Dist.] 2010, pet. denied).
Accordingly, res judicata does not bar the claims in these proceedings.
B. The supersedeas bond requires that possession and title remain as
they were before the decree.
When Evangelina filed the decree in the El Paso real property records and
took possession of the three disputed properties in December 2015, the divorce
10
decree was not final and had not been superseded. Evangelina contends, however,
that she “completed” execution on the properties before Miguel posted his
supersedeas bond in June 2016, and thus Miguel’s subsequent posting of the bond
“ha[d] absolutely no effect on the El Paso properties . . . .” Miguel and the Carillo
relators reply that Evangelina did not lawfully execute on the decree. They further
reply that accepting Evangelina’s contention that her execution was “completed”
and unaffected by the posted bond would encourage judgment creditors to
immediately execute on judgments that had not become final in a race to execute
before the filing of a supersedeas bond.
Contrary to Evangelina’s contention, she did not complete execution on the
disputed properties. She never as much as obtained a writ of execution in connection
with seizing possession of them. Rather, she filed the decree with the real property
records before it became final and took possession of the properties without aid of a
writ of execution. Because Evangelina did not complete a lawful execution on any
of the three properties before the bond was posted, Evagelina’s premise that the
supersedeas bond does not affect her imposition of a muniment of title and
possession of the properties lacks merit. Her continuing attempts to enforce the
judgment became subject to Miguel’s supersedeas bond. See Alpert v. Riley, 274
S.W.3d 277, 297–98 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) (“[A
supersedeas bond] preserves ‘the status quo of the matters in litigation as they
11
existed before the issuance of the order or judgment from which an appeal is
taken.’”) (quoting In re Tarrant Cnty., 16 S.W.3d 914, 918 (Tex. App.—Fort Worth
2000, orig. proceeding)); In re City of Cresson, 245 S.W.3d 72, 74 (Tex. App.—Fort
Worth 2008, orig. proceeding) (“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.”).
We are unpersuaded by Evangelina’s reliance on Texas Employers’ Insurance
Association v. Engelke, 790 S.W.2d 93 (Tex. App.—Houston [1st Dist.] 1990, no
writ). Engelke involved “fixed rights” established by a valid writ of execution issued
by the trial court and executed upon by the sheriff before the bond was filed—two
conditions not present in this case. See id. at 95. Contrary to Miguel and the Carillo
relators’ position in this case, the relator in Engelke “d[id] not challenge the validity
of either the judgment execution or the levy thereunder.” Id. Evangelina attempted
execution on the decree by filing it as a muniment of title before it had become a
final judgment and obtained possession of the properties before enforcement was
permitted. See TEX. R. CIV. P. 627.
Evangelina also contends that Texas Rule of Civil Procedure 634 supports her
position that her efforts at execution on the El Paso properties are not subject to the
supersedeas bond, relying on the following language:
The clerk or justice of the peace shall immediately issue a writ
of supersedeas suspending all further proceedings under any
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execution previously issued when a supersedeas bond is
afterward filed and approved within the time prescribed by law
or these rules.
TEX. R. CIV. P. 634 (emphasis added). Focusing on Rule 634’s use of the words
“further proceedings,” Evangelina asserts that “the filing of a supersedeas bond
prevents the further taking of any step under the judgment, and does not work
backward[].”
Evangelina’s interpretation ignores Texas Rule of Appellate Procedure
24.1(f), which provides that enforcement efforts begun before the judgment was
superseded must stop when a judgment has been superseded:
Effect of Supersedeas. Enforcement of a judgment must be
suspended if the judgment is superseded. Enforcement begun
before the judgment is superseded must cease when the judgment
is superseded. If execution has been issued, the clerk will
promptly issue a writ of supersedeas.
TEX. R. APP. P. 24.1(f). The purpose of restoring the status quo that existed prior to
the superseded judgment would be defeated if judgment creditors were allowed to
persist with execution on judgments begun before the bond was filed. Accordingly,
we hold that the supersedeas bond requires Evangelina to desist enforcement efforts
with respect to the El Paso properties.
C. The bond requires removal of the muniment of title and return of
possession.
Miguel and the Carillo relators argue that the trial court erred in denying relief
because the supersedeas bond requires Evangelina to remove the muniment of title
13
and return possession of the El Paso properties to the Carillo relators. Evangelina
does not dispute that her claim to legal title to the El Paso properties stems solely
from her filing of the decree as a muniment of title in the El Paso County real
property records. Nor does she dispute that Eagle Ridge was the record owner of
these properties before she filed the decree. Thus, the status quo before the trial court
signed the decree was that Eagle Ridge owned and held possession of the properties.
See City of Cresson, 245 S.W.3d at 74 (“For injunctive purposes, the [s]tatus quo is
defined as ‘the last, actual, peaceable, noncontested status which preceded the
pending controversy.’”) (quoting Fox v. Tropical Warehouses, Inc., 121 S.W.3d
853, 857 (Tex. App.—Fort Worth 2003, no pet.). Because the posting of a
supersedeas bond preserves the status quo prior to the judgment, posting of the bond
requires removal of the muniment of title and return of possession of the El Paso
Properties to the Carillo relators. We therefore conditionally grant the petition
compelling the trial court to require Evangelina to remove the decree as a muniment
of title and return physical possession of the properties to the Carillo relators. We
leave undisturbed the trial court’s other orders enjoining the sale or encumbrance of
the properties pending appeal. See TEX. R. APP. P. 24.1(e) (“The trial court may make
any order necessary to adequately protect the judgment creditor against loss or
damage that the appeal might cause.”).
14
Miguel and the Carillo relators also request that we order the trial court to
issue a writ of supersedeas. The applicable rules, however, mandate issuance of a
writ of supersedeas when a writ of execution has issued. See TEX. R. APP. P. 24.1(f)
(“If execution has been issued, the clerk will promptly issue a writ of supersedeas.”);
TEX. R. CIV. P. 634 (“The clerk or justice of the peace shall immediately issue a writ
of supersedeas suspending all further proceedings under any execution previously
issued when a supersedeas bond is afterward filed and approved within the time
prescribed by law or these rules.”). In contrast to the rules’ mandatory language
requiring issuance of a writ of supersedeas by a clerk, section 24.011 of the Texas
Government Code gives the trial court discretion to issue a writ of supersedeas:
WRIT POWER. A judge of a district court may, either in term
time or vacation, grant writs of mandamus, injunction,
sequestration, attachment, garnishment, certiorari, and
supersedeas and all other writs necessary to the enforcement of
the court’s jurisdiction.
TEX. GOV’T. CODE § 24.011.
Although the trial court has discretion in issuing a writ of supersedeas when a
writ of execution has not issued, we need not determine whether refusing to issue
the writ was an abuse of discretion in this case because we have conditionally
granted relators’ request to compel orders requiring removal of the muniment of title
and return of possession. Absent a failure to comply with these orders, enforcement
15
of the supersedeas bond does not require compelling the additional issuance of a writ
of supersedeas.
D. Adequate Remedy by Appeal
Finally, to be entitled to mandamus relief, relators must demonstrate that they
lack an adequate remedy by appeal. The Carillo relators satisfy this requirement
because their underlying appeal cannot remedy being dispossessed of the El Paso
properties during the appeal. Although Miguel disavows ownership of the El Paso
properties, he also lacks an adequate remedy by appeal because his posted
supersedeas bond stays enforcement of the decree and a violation of the stay cannot
be remedied by appeal. See Isern v. Ninth Court of Appeals, 925 S.W.2d 604, 606
(Tex. 1996) (“The threat of execution on the judgment is a situation of manifest and
urgent necessity which renders any remedy by appeal inadequate.”) (citing Walker
v. Packer, 827 S.W.2d 833, 840-43 (Tex. 1992)).
16
Conclusion
For the forgoing reasons, we conditionally grant the petitions for writ of
mandamus and direct the trial court to issue orders compelling Evangelina to remove
the decree from the El Paso real property records as a muniment of title and return
possession of the El Paso properties to the Carillo relators. We are confident that the
trial court will promptly comply, and our writ will issue only if it does not.
Because we order the removal of the decree as a muniment of title and the
return of possession of the properties, we deny the further request for orders
requiring the trial court to issue a writ of supersedeas.
Jane Bland
Justice
Panel consists of Chief Justice Radack and Justices Higley and Bland.
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