The Fifth Court of Appeals this week granted an emergency motion to stay a trial court’s order that would have required Sun Holdings and affiliated companies to post a more than $150 million supersedeas bond before appealing a $30.7 million jury verdict against it.
The basis for Dallas County Court-at-Law Judge Dianne K. Jones’ ruling — the Fifth Court of Appeals April 2024 holding in Greystar Development & Construction v. Williams — is currently on appeal and fully briefed before the Texas Supreme Court. The court has not decided whether to accept the case but that could change as soon as Friday, when the court will issue its usual set of orders, opinions, grants and denials.
Both the Greystar appeal and the Sun Holdings appeal ask Texas appellate courts for clarity on the requirements for posting supersedeas bonds under both Texas Rule of Appellate Procedure 24.2(a)(1) and Texas Civil Practice and Remedies Code 52.006(a)(2).
Below are details of each trial and the subsequent appeals.
Sun Holdings Trial, Appeal
In February 2024, a jury of six Dallas County residents heard eight days of testimony and deliberated for two hours before deciding Jerry “Scott” Stockton wasn’t lying when he told them his former employer, Guillermo Perales, and his company, Sun Holdings, had promised to pay him 5 percent of the annual operating profits of the restaurants he helped oversee. The jury awarded Stockton about $15.6 million in compensatory damages and $15.1 million in punitive damages.
Perales owns about 150 Popeyes restaurants across Texas, Oklahoma and Florida. The case hinged on the existence of an alleged oral promise for compensation and Stockton, who filed suit in 2019, alleged that he served as the “key operator” for Perales’ Popeyes restaurants, which is essentially someone who ensures the franchisees comply with corporate requirements and is dispatched to address issues at specific restaurants when they arise.
He alleged that he was encouraged to delay collecting his share of the operating profits until he retired, but in 2018 when he did retire, Perales denied the request for compensation.
The defendants are Perales, Sun Holdings and seven entities that either had franchise agreements for Popeyes restaurants or operated franchised restaurants. In April 2024, two months after the verdict was rendered and after final judgment was entered, the defendants posted a joint bond of $16.9 million.
Stockton objected to the bond, citing the Greystar case, and after a hearing the trial court entered an order requiring that each defendant appellant post a separate bond of $16.9 million.
On appeal to the Fifth Court of Appeals, Perales and Sun Holdings told the court in a March 3 emergency motion that they had satisfied Rule 24.2 by posting the joint bond and that Stockton’s reliance on Greystar is misplaced.
“Nothing in that case requires that absurd amount of over-security,” Perales and Sun Holdings told the court.
And Greystar, where the jury awarded $360 million in compensatory damages, is distinguishable from this case, they argued. In that case, each defendant invoked the $25 million cap on supersedeas bonds outlined in Rule 24.
“Because of the $25 million cap, and because the compensatory damages were so large, the Greystar plaintiff would never be over-secured,” Perales and Sun Holdings argued. “The dispute was about how much the plaintiff would be under-secured. Whether the plaintiff would have $25 million or $75 million in security during the appeal, that bond would still be a small percentage of the $360 million compensatory-damage award — either 7.5% or 20%.”
Conversely, in this case, the $15.6 million in compensatory damages are fully secured by the current bonds, they argued.
“Plaintiffs’ position means that any judgment creditor is entitled to an additional multiple of the judgment in over-security for every defendant in a case. As plaintiffs’ counsel is arguing right now to the Texas Supreme Court in Greystar, that bizarre result creates an obvious incentive to sue as many parties as possible,” Perales and Sun Holdings argued, pointing out that Anne Johnson of Tillotson Johnson & Patton is listed as appellate counsel for Stockton here and is also representing Greystar in its appeal.
“Nothing about that makes sense in the context of over-secured compensatory damages. Nothing about multi-defendant cases requires multiples of over-security, and nothing good can result from systematically encouraging the joinder of as many parties as possible to litigation.”
In response, Stockton told the court Perales’ and Sun Holdings’ real problem is that they don’t like the court’s holding in Greystar.
“But it is the law,” Stockton argued. “And the trial court followed the law.”
Under Greystar, Stockton told the court the bond requirement “applies per judgment debtor and not per judgment.”
“Movants’ effective position is that trial courts (and this Court) should ignore Greystar because it might be overturned. That is bad policy,” Stockton argued. “And it disrespects this Court. An appellant should not be immunized from controlling law while an appeal is taken on an issue in another case. Acquiescing to movants’ tactic would mean every trial court judgment could be ignored by any appellant if the defendant or particular trial court can find a case pending before the Texas Supreme Court which arguably might affect their case. That is not the law, has never been the law, and should not become the law by this Court’s grant of relief to movants here.”
In an order issued March 4 — by Justices Dennise Garcia, Tina Clinton and Gino Rossini — the court agreed to stay the trial court’s Feb. 5 supersedeas bond order.
“This stay shall remain in effect until this Court’s disposition of appellants’ March 3, 2025, motion to review supersedeas order or until further order of this Court,” the panel wrote in the short order.
Greystar Trial, Appeal
The Greystar case centers on a crane collapse in Dallas that killed Kiersten Smith. Her parents, Michele Williams and James Kirkwood, sued several entities, including Greystar Development & Construction, Greystar Development & Construction, LP–Gabriella Tower Contractor Series, and Gabriella Tower. A jury returned an $860 million verdict in favor of the family in April 2023.
The Greystar entities, which are jointly and severally liable for damages of $360 million and prejudgment interest of about $45 million, filed notice of appeal in November 2023.
In February 2024 the Greystar parties filed an emergency motion for temporary relief, asking for a stay that would prevent immediate collection of the judgment while the appellate court reviewed the supersedeas bond order issued in the case.
On April 10, 2024, the Fifth Court of Appeals determined that three Greystar entities that wanted to appeal the judgment must each post a $25 million bond, rejecting the companies’ arguments that their joint posting of a $25 million supersedeas bond was sufficient.
The appellate court ruling — issued by Justices Ken Molberg, Cory Carlyle and Maricela Moore Breedlove — affirmed the ruling of Dallas County Court at Law No. 2 Judge Melissa Jean Bellan.
“At the heart of judgment debtors’ motion is their contention that the $25 million cap in § 52.006 of the Texas Civil Practice and Remedies Code applies per judgment,” the panel wrote. “Because we conclude that the statutory cap applies per judgment debtor, not per judgment, and for the other reasons set forth below, we deny the motion and affirm the trial court’s bond ruling.”
Greystar then filed a petition for writ of mandamus with the Texas Supreme Court on April 15, 2024.
“The trial court’s bond order invalidating a $25 million supersedeas bond as to two of three Greystar entities and requiring them to ‘immediately’ file two additional bonds to prevent instantaneous enforcement of the $406 million judgment contravenes the text, structure, and purpose of Chapter 52 of the Civil Practice and Remedies Code.”
Greystar told the Texas Supreme Court that Chapter 52 and Rule 24 each “permit judgment debtors to suspend a judgment by posting a bond with the court clerk and cap the amount of the bond at $25 million per ‘judgment.’”
“Three Greystar entities, who plaintiffs claim and jurors found to be a single ‘joint enterprise,’ availed themselves of this right by posting a joint $25 million bond and appealing the trial court’s $406 million judgment, 99.6% of which represent noneconomic damages based on unsubstantiated anchors in closing argument to fighter jets, famous paintings, or the cost of constructing an apartment building.”
Greystar explained that the court initially approved its posting of a joint $25 million bond in August 2023 and “remained unchallenged for nearly six months.”
“Then, after the trial court’s plenary jurisdiction expired, plaintiffs filed a belated challenge to the bond, arguing that Chapter 52 requires $25 million per judgment debtor, not per judgment,” Greystar told the court. “The trial court agreed, ruling that the bond was insufficient and the judgment not suspended as to two of the Greystar entities, and ordered them to ‘immediately’ post additional security to suspend enforcement of the final judgment.”
Williams and Kirkwood argued in response that what Greystar is asking the court to do is “adopt two remarkable theories of supersedeas practice: A limitless number of defendants can supersede a judgment with a single $25 million bond, and trial courts lack authority to declare bonds that are invalid under Chapter 52 of the Civil Practice and Remedies Code to in fact be invalid.”
“But as the Dallas Court of Appeals rightly held, neither theory finds any support in the text, structure, or purpose of Chapter 52; or in Texas Rule of Appellate Procedure 24,” the family argued.
The Texas Civil Justice League filed the lone amicus brief in the case, in support of Greystar, on Feb. 10. TCJL explained that it has long advocated for supersedeas bond reform, starting in 1989 after the landmark $10.5 billion verdict in Pennzoil v. Texaco.
“In our view, the plain language of the reformed Chapter 52 caps the amount of security at $25 million, period,” TCJL told the court. “For what it’s worth (and as a matter of statutory construction our opinion and $8 will buy you a cup of coffee), no one involved in drafting and eventual enactment of § 52.006 ever thought that the $25 million cap was to be applied on a per judgment debtor basis. As one of the two statewide civil justice reform organizations that was directly involved in that process, we can emphatically assert that had we thought that the statute should be applied that way, the Legislature would have said so.”
In the Sun Holdings case, Stockton is represented by Daniel H. Charest, E. Lawrence Vincent and Chase Hilton of Burns Charest.
Sun Holdings is represented by Byron K. Henry and Kelly E. Kleist of Scheef & Stone. Perales is represented by Michael K. Hurst, David S. Coale, Mary Goodrich Nix and Campbell Sode of Lynn Pinker Hurst & Schwegmann.
In the Greystar case, Williams is represented by Jason A. Itkin, Andrew R. Gould, Cory D. Itkin and Parker J. Cragg of Arnold & Itkin, Jeffrey Levinger of Levinger PC and Michael P. Lyons, Christopher J. Simmons and P. Wes Black of Lyons & Simmons.
Greystar is represented by Wallace B. Jefferson, William J. Boyce and Rachel A. Ekery of Alexander Dubose & Jefferson, Anne M. Johnson of Tillotson Johnson & Patton and Ben L. Mesches and Ryan Paulsen of Haynes Boone.
The case number for Sun Holdings is 05-24-00503-CV and the case number in Greystar is 24-0293.