Rancho La Valencia, Inc. and Charles R. Randy Turner v. Aquaplex, Inc. and James Edward Jones, Jr. ( 2006 )

NO. 07-06-0157-CV

IN THE COURT OF APPEALS

FOR THE SEVENTH DISTRICT OF TEXAS

AT AMARILLO

PANEL B

JULY 31, 2006 ______________________________

RANCHO LA VALENCIA, INC. AND CHARLES R. "RANDY" TURNER, APPELLANTS

V.

AQUAPLEX, INC. AND JAMES EDWARD JONES, JR., APPELLEES _________________________________

FROM THE 201^ST DISTRICT COURT OF TRAVIS COUNTY;

NO. 03-004287; HONORABLE SUZANNE COVINGTON, JUDGE _______________________________

Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.

OPINION

On December 5, 2005, a $2,294,807 judgment was entered against Rancho La Valencia, Inc., and Charles R. Turner (collectively, "appellants"). Appellants filed an application to set amount of supersedeas bond on March 30, 2006. Aquaplex, Inc., and James Edward Jones, Jr., (collectively, "appellees") filed a motion for entry of appeal bond and motion to strike the affidavit of Turner on April 4, 2006. Following hearings and discovery related to the bond issue, the trial court set Turner's supersedeas bond at $283,000 and Rancho La Valencia's bond at $2,294,807. Further, the trial court enjoined appellants from dissipating or transferring any non-exempt assets, except in the normal course of business, enjoined appellants from transferring property to any trust in which Turner was the beneficiary or trustee, absent application to and approval by the trial court, and required the appellants to notify appellees in writing of any transfers of non-exempt assets in the normal course of business within ten days of such transfer. On June 7, 2006, this court granted the request of appellants to stay enforcement proceedings pending appellees' response to the motion for temporary relief and to review the previously ordered supersedeas bonds. We requested a response from appellees.

Factual background

Originally, this was a suit between joint ventures in a real estate venture. Appellants filed suit against appellees for fraudulent inducement to join the joint venture. Appellees filed a countersuit alleging that it was appellants who fraudulently induced appellees to join the joint venture. During the pendency of the law suit, Turner transferred property and assets, that he controlled, to a pre-existing family trust for which Turner was the sole beneficiary and trustee. The history of the litigation demonstrates that appellants went to extraordinary lengths to delay discovery and trial of the case. Finally, the parties executed a Rule 11 agreement purporting to settle the matters in controversy. See Tex. R. Civ. P. 11. However, appellants never funded the settlement and the matter was scheduled for trial. Prior to the trial setting, appellants filed for bankruptcy relief. Eventually, the bankruptcy court dismissed appellants' bankruptcy, finding that it was a bad faith filing and remanded the case back to the State court. Subsequently, the case was tried to a jury that returned a verdict for appellees, which underlies the supersedeas bonds now before this court.

By three issues, appellants contend that the trial court's injunction is impermissibly broad and not premised upon a stay of enforcement; that the evidence supports a negative net worth for Turner and, therefore, the trial court erred in setting the amount of his supersedeas bond; and the trial court erred in setting Rancho La Valencia's supersedeas bond in an amount equal to the full amount of the judgment. We deny appellants' motion to dissolve the post-trial injunction and affirm the trial court's determination of supersedeas bond.

Post-trial injunction

Appellants contend that the trial court committed error in issuing its post-trial injunction for the following reasons:

1) the court lacked jurisdiction to issue the injunction because the judgment had not been superseded;

2) the injunction attempted to reach Turner's exempt assets by ordering no transfers to trusts of which Turner was the beneficiary or trustee; and

3) the injunction improperly interfered with appellants' right to make transfers of assets in the normal course of business.

We review the issuance of a post-judgment injunction under an abuse of discretion standard, the same as we would review the granting or denial of a temporary injunction. See Emeritus Corp. v. Ofczarzak, No. 04-05-00530-CV, slip op. at 3, 2006 WL 467976, at *3 (Tex.App.-San Antonio, March 1 2006), rev'd by agr., 2006 WL 923534 (Tex.App.-San Antonio April 5, 2006) (settlement of underlying appeal). An abuse of discretion arises when the trial court acts without reference to applicable guiding principles, acts arbitrarily or unreasonably, misinterprets or misapplies the law, or renders a decision without sufficient evidentiary basis. Friona Indep. Sch. Dist. v. King, 15 S.W.3d 653, 657 (Tex.App.-Amarillo 2000, no pet.).

Appellants initially contend that the trial court lacked jurisdiction to issue any injunction because the judgment had not been superseded. Appellants urge that neither Texas Rule of Appellate Procedure 24 nor Texas Civil Practice and Remedies Code Chapter 52 permit a trial court to issue an injunction until after the judgment at issue has been superseded. See Tex. R. App. P. 24 ⁽¹⁾; Tex. Civ. Prac. & Rem. Code Ann. Ch. 52 (Vernon 1997). ⁽²⁾ However both Rule 24 and Chapter 52 provide that the trial court may issue an injunction enjoining "the judgment debtor from dissipating or transferring assets to avoid satisfaction of the judgment. . . ." Rule 24.2(d); § 52.006(e). Additionally, the legislative history of House Bill 4 discloses that the legislature expressly authorized post-judgment injunctions to enjoin a judgment debtor from wasting or disposing of assets. See Emeritus Corp., 2006 WL 467976, at *3. Thus the trial court had jurisdiction to grant injunctive relief. Further, when the record of appellants' financial conduct throughout the litigation is considered, we cannot say that the trial court abused its discretion in granting the injunction.

Appellants next contend that the portion of the injunction purporting to enjoin the transfer of assets into any trust for which Turner was a beneficiary or trustee is invalid as an attempt to encumber exempt assets. However, the language of the injunction is not as broad as appellants contend. Specifically, the trial court enjoined appellants from transferring "property or assets into any trust in which Charles R. Turner is a beneficiary or trustee absent application to and approval from this Court. . . ." Initially, we observe that the quoted portion of the trial court's order does not prohibit transfers to the trusts, but rather affords the court some modicum of control over the transfers. See Rule 24.2(d). The record reveals that Turner has a history of transferring property to family trusts. It is unclear from the record whether this property was exempt property under the laws of Texas. Additionally, Turner has admitted filing at least two financial statements that contained false information. Finally, we must consider that the bankruptcy judge dismissed appellants' bankruptcy as a bad faith filing. In light of the record, we find that the trial court did not abuse its discretion in requiring appellants to apply to the court for permission before transferring any property to the trusts.

Finally, appellants contend that the trial court's order interferes with their ability to make transfers of property in the normal course of business. Considering the appellants' actions prior to the judgment, it cannot be said that the need for the trial court's order was not firmly established. As previously discussed, appellants are attempting to put the broadest possible construction on the court's order. The order simply requires the appellants to notify the judgment creditors of the nature and amounts of transfers within 10 days. This order does not enjoin appellants from making transfers in the normal course of business. In light of the facts of this case, the trial court's order simply provides a mechanism for the court to monitor the security requirements to continue to supersede the judgment. Rule 24.3(a); Miller v. Kennedy & Minshew, P.C., 80 S.W.3d 161, 164 (Tex.App.-Fort Worth 2002, no pet.). In view of the record, we cannot say that the trial court's effort to monitor appellants' financial transactions is an abuse of discretion.

Supersedeas bond

Appellants contend that the trial court erred in setting the amount of bond required to supersede the judgment. We review the trial court's determination of the amount of security necessary to supersede a judgment under an abuse of discretion standard. In re Kajima Int'l., Inc., 139 S.W.3d 107, 112 (Tex.App.-Corpus Christi 2004, pet. denied). The amount of the bond required may not exceed 50 percent of the judgment debtor's net worth, see Rule 24.2(a)(1)(A), but the judgment debtor has the burden to prove its net worth. Rule 24.2(c)(3); Ramco Oil & Gas, Ltd. v. Anglo Dutch (Tenge), L.L.C., 171 S.W.3d 905, 910 (Tex.App.-Houston [14^th Dist] 2005, no pet.). The trial court is the exclusive judge of the credibility of the witnesses and the weight to be given to their testimony. Henry S. Miller Residential Serv. Corp. v. Arthur, 671 S.W.2d 670, 671 (Tex.App.-Dallas 1984, no writ).

Appellants contend that the trial court erred as a matter of law in setting Turner's bond because the court failed to apply proper accounting principles to the evidence produced regarding Turner's net worth. ⁽³⁾ Appellants' contention is misplaced because it was not an error in the application of accounting principles that resulted in the trial court's determination of Turner's net worth. Rather, it appears that the court simply found Turner not credible. Appellees point out that, as late as the motion for new trial hearing, in an effort to demonstrate that appellants had every intention of completing the Rule 11 settlement, Turner was claiming to have a substantial net worth. Appellants have not contested this allegation. Accordingly, we can and, based upon the totality of the record, do accept the statement as true. Rule 38.1(f); Double Ace, Inc. v. Pope, 130 S.W.3d 18, 29 n.8 (Tex.App.-Amarillo 2005, no pet.). Having heard all of the testimony during numerous discovery hearings, at trial, at the hearing on the motion for new trial, and during the hearing on the issue of the bonds, the trial court was in the best position to evaluate the truthfulness of Turner's evidence regarding his net worth. Henry S. Miller Residential Serv. Corp., 671 S.W.2d at 671. The record reflects sufficient contradictory evidence regarding Turner's net worth that we cannot say that the decision of the trial court in setting the bond was an abuse of discretion.

Appellants next contend that the trial court abused its discretion by setting the supersedeas bond for Rancho La Valencia at the full amount of the judgment. A review of the record reveals that the only evidence offered to prove Rancho La Valencia's net worth was a statement in Turner's affidavit and another statement in a financial statement offered by Turner. To avoid the bond being set equal to the amount of the judgment, it was Rancho La Valencia's burden to establish its net worth. Rule 24.2(c)(3); Ramco Oil & Gas. Ltd., 171 S.W.3d at 910. As the only evidence of Rancho La Valencia's net worth was offered through Turner and as the trial court found Turner not credible, we cannot say that the trial court abused its discretion in setting the supersedeas bond for Rancho La Valencia. Accordingly, appellants' issues relating to the amount of the bonds required are overruled.

Conclusion

Having overruled appellants' issues, we deny appellants' motion to dissolve the post-trial injunction and affirm the trial court's determination of supersedeas bond.

Per Curiam

1. Further reference to Texas Rules of Appellate Procedure will be by reference to "Rule __."

2. Further reference to Texas Civil Practice & Remedies Code provisions will be by reference to "§ ___."

3. Appellants contend that the trial court failed to apply generally accepted accounting principles, specifically the Financial Accounting Standards Board's Statement of Accounting Concepts No. 6. However, the record reveals that appellants failed to provide this authority to the trial court or request the court to consider these standards.

Issue One - Factual Insufficiency

          Appellant contends the evidence is “factually insufficient” to support his conviction but cites no authority to explain or support his entitlement to a factual sufficiency review where, as here, he has pled guilty to a trial court and waived his right to a jury trial.

           Where a defendant knowingly, intelligently and voluntarily pleads guilty or nolo contendere to a felony, the appellate standards of review for legal and factual sufficiency do not apply. Ex parte Martin, 747 S.W.2d 789, 791 (Tex.Crim.App. 1988); Ex parte Williams, 703 S.W.2d 674, 678 (Tex.Crim.App. 1986); O’Brien v. State, 154 S.W.3d 908, 910 (Tex.App.–Dallas 2005, no pet.); Keller v. State, 125 S.W.3d 600, 604-05 (Tex.App.–Houston [1^st Dist.] 2003, pet. dism’d), cert. denied, 544 U.S. 906, 125 S. Ct. 1603, 161 L. Ed. 2d 280 (2005).

           We find Appellant’s pleas constitute voluntary judicial confessions of guilt. See Dinnery, 592 S.W.2d at 352-53; Harp v. State, 148 Tex. Crim. 354, 187 S.W.2d 570, 571 (1945) (op. on reh’g); Lord, 63 S.W.3d at 92; Stewart, 12 S.W.3d at 148. And, having considered the record, we conclude there was sufficient evidence to support the judgments under article 1.15 of the Code of Criminal Procedure. Appellant’s issues are overruled.

          Issue Two - Cruel and Unusual Punishment

          Appellant also contends the sentences imposed on him were disproportionate and constituted cruel and unusual punishment under the Texas and United States Constitutions. To preserve error for appeal, a party must make a timely, specific objection or motion to the trial court that states the grounds for the ruling sought with sufficient specificity and complies with the rules of evidence and procedure. See Tex. R. App. P. 33.1(a). An argument that the punishment assessed is cruel and unusual is waived if presented for the first time on appeal. Id; Jacoby v. State, 227 S.W.3d 128, 130 (Tex.App.–Houston [1^st Dist.] 2006, pet. ref’d). Because Appellant made no objection to the trial court raising the issue of cruel and unusual punishment, he has waived this issue on appeal. See Rhoades v. State, 934 S.W.2d 113, 120 (Tex.Crim.App. 1996); Curry v. State, 910 S.W.2d 490, 497 (Tex.Crim.App. 1995).  

            However, even absent waiver, after comparing the temporal numerosity and seriousness of the felony offenses for which he was convicted in light of his prior convictions for similar offenses with the sentences assessed thereon, we conclude that Appellant’s sentences were not unconstitutionally disproportionate and, thus, did not constitute cruel and unusual punishment. See, e.g., Winchester v. State, 246 S.W.3d 386, 390-91 (Tex.App.–Amarillo 2008, no pet.). These issues are also overruled.

Conclusion  

          The trial court’s judgments are affirmed.

                                                                                      Patrick A. Pirtle

                                                                                             Justice

Do not publish.