Black v. Shor

• Decision Date: 18 April 2013
• Docket Number: Nos. 13–11–00570–CV,13–11–00715–CV.,s. 13–11–00570–CV
• Citation: 443 S.W.3d 170
• Parties: Paul BLACK, et al., Appellants, v. Toby SHOR and Seashore Investments Management Trust, Appellees.
• Court: Texas Court of Appeals

443 S.W.3d 170

Paul BLACK, et al., Appellants

v.Toby SHOR and Seashore Investments Management Trust, Appellees.

Nos. 13–11–00570–CV

13–11–00715–CV.

Court of Appeals of Texas, Corpus Christi–Edinburg.

April 18, 2013.

Kevin W. Grillo, Pena & Grillo, PLLC, Corpus Christi, Alan B. Daughtry, Doyle Raizner LLP, Houston, Ben C. Broocks, Austin, for Appellants.

Jean C. Frizzell, John S. Black, Billy Berryhill, Reynolds, Frizzell, Black, Houston, Richard D. Daly, Houston, for Appellees.

Before Justices GARZA, BENAVIDES and PERKES.

OPINION

Opinion by Justice BENAVIDES.

Appellants, Paul Black, PBF Investments, Ltd., BNP Holdings, Ltd., BNP Commercial Properties, Ltd., BNP Management LLC, and TSE Equities I LLC, challenge three post-judgment turnover orders issued in favor of appellees, Toby Shor and Seashore Investments Management Trust (“Seashore”). We vacate in part and reverse and remand, in part, for further proceedings consistent with this opinion.

I. Background

Appellees were the prevailing parties in an arbitration proceeding and received an arbitration award in excess of $30 million in their favor. On April 6, 2011, the trial court confirmed the arbitration award and entered a judgment against appellants. Appellants appealed this judgment in our cause number 13–11–00413–CV.¹ Following the entry of judgment, the trial court entered a series of three turnover orders on August 11, 2011, October 12, 2011, and November 4, 2011. These three turnover orders are at issue in these consolidated appeals.² Appellants seek to set aside the turnover orders by eight issues as discussed herein.³

II. Applicable Law and Standard of Review

A “turnover” order is a statutory procedural device through which judgment creditors may reach assets of a judgment debtor that are otherwise difficult to attach or levy by ordinary legal process. See Tex. Civ. Prac. & Rem.Code Ann. § 31.002 (West 2008) ; Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 224 (Tex.1991) ; Moyer v. Moyer, 183 S.W.3d 48, 52 (Tex.App.-Austin 2005, no pet.). Under the statute, a judgment creditor can apply to a court for an injunction or other means to satisfy a judgment through a judgment debtor's property, including present or future property rights. See Tex. Civ. Prac. & Rem.Code Ann. § 31.002(a). The turnover statute is purely procedural; its purpose is to ascertain whether an asset is either in the judgment debtor's possession or subject to its control. Republic Ins. Co. v. Millard, 825 S.W.2d 780, 783 (Tex.App.-Houston [14th Dist.] 1992, orig. proceeding).

To obtain relief under the turnover statute, a judgment creditor must prove: (1) the judgment debtor owns property, including present or future rights to property; (2) the property is not exempt from attachment, execution, or seizure; and (3) the property “cannot readily be attached or levied on or by ordinary legal process.” Tex. Civ. Prac. & Rem.Code Ann. § 31.002 ; see Europa Int'l, Ltd. v. Direct Access Trader Corp., 315 S.W.3d 654, 656 (Tex.App.-Dallas 2010, no pet.). A turnover order is proper if the conditions of the statute are met.See Tex. Civ. Prac. & Rem.Code Ann. § 31.002 ; Tanner v. McCarthy, 274 S.W.3d 311, 322 (Tex.App.-Houston [1st Dist.] 2008, no pet.). Upon finding that the elements of section 31.002(a) are satisfied, a trial court has discretion to issue a range of remedies, including ordering the judgment debtor to turn over nonexempt property that is in the debtor's possession, or is subject to the debtor's control, to a designated sheriff or constable for execution, and “appointing a receiver with the authority to take possession of the nonexempt property, sell it, and pay the proceeds to the judgment creditor to the extent required to satisfy the judgment.” Tex. Civ. Prac. & Rem.Code Ann. § 31.002(b). The turnover order itself need not specify the property subject to turnover. Id. § 31.002(h) ; Tanner, 274 S.W.3d at 322.

We review orders under the turnover statute, section 31.002 of the civil practice and remedies code, for an abuse of discretion and will reverse the trial court only if we determine that it acted in an unreasonable or arbitrary manner or without reference to any guiding rules and principles. See Tex. Civ. Prac. & Rem.Code Ann. § 31.002 ; Beaumont Bank, N.A., 806 S.W.2d at 226 (Tex.1991) ; Europa Int'l, Ltd., 315 S.W.3d at 656 ; Tanner, 274 S.W.3d at 320 ; Moyer, 183 S.W.3d at 51–52. A trial court's issuance of a turnover order, even if predicated on an erroneous conclusion of law, will not be reversed for an abuse of discretion if the judgment is sustainable for any reason. Beaumont Bank, N.A., 806 S.W.2d at 226. A trial court does not abuse its discretion if there is some evidence of a substantive and probative character to support the decision. Tanner, 274 S.W.3d at 321–22.

III. Jurisdiction

We first address appellees' argument that we lack jurisdiction over these appeals. Appellees contend that appellants timely filed notices of appeal from the first two turnover orders, but these first two orders became nullities when the third turnover order was rendered and appellants did not properly perfect an appeal from the third turnover order. Appellants previously addressed this issue by filing an “Opposed Second Motion to Review Further Orders” seeking appellate review of the third turnover, which this Court granted by order previously issued in this cause. However, in granting the motion, we cautioned the parties that our ruling should not be construed as a final determination regarding whether the November 4, 2011 turnover order is subject to review on appeal, and we directed the parties to address this issue in their briefing. This issue is now properly before the Court.

Ordinarily, an amended final order supersedes any prior final order when the “order amounts to something more than marking through [an earlier date] and substituting another date on the final order.”

Old Republic Ins. Co. v. Scott, 846 S.W.2d 832, 833 n. 2 (Tex.1993) (holding date of final judgment for purpose of appellate filing deadlines was later date, not earlier). When the trial court signs an amended order, the original order becomes “a nullity.” Id. As the original judgment ceases to have legal effect, only the amended judgment can support an appeal. Bahar v. Lyon Fin. Servs., 330 S.W.3d 379, 386 (Tex.App.-Austin 2010, pet. denied).

The trial court's post-judgment power to enforce its judgment and to aid the judgment creditor in his efforts to collect on that judgment can last until the judgment is satisfied. See Tex.R. Civ. P. 308 ; Bahar, 330 S.W.3d at 386. The only limit on a trial court's authority to enforce its judgment is that enforcement orders must not be inconsistent with the original judgment and must not constitute a “material change in substantial adjudicated portions of the judgment.” Matz v. Bennion, 961 S.W.2d 445, 452 (Tex.App.-Houston [1st Dist.] 1997, writ. denied) (quoting Katz v. Bianchi, 848 S.W.2d 372, 374 (Tex.App.-Houston [14th Dist.] 1993, orig. proceeding [leave denied] )). Thus, the trial court may render a number of amended turnover orders, all of which could be final, appealable judgments if they act as mandatory injunctions. Bahar, 330 S.W.3d at 386 (discussing Schultz v. Fifth Judicial Dist. Court of Appeals, 810 S.W.2d 738, 740 (Tex.1991), abrogated on other grounds by In re Sheshtawy, 154 S.W.3d 114, 124–25 (Tex.2004) ).

In the instant case, the three turnover orders are distinct. The first turnover order rendered on August 11, 2011, and entitled “Order on Toby Shor's and Seashore Investments Management Trust's Application for Turnover Order,” provides that appellants “directly or indirectly” are the owners of shares, stock, stock certificates, or ownership interests in a list of 22 different entities, and “through entities in which they have an interest, directly or indirectly, real property known as 500 N. Water Street ... and personal property located therein.” The order recites that the property is not exempt from attachment, execution, or seizure, and it cannot “readily be attached or levied on by ordinary legal process.” The order directs the appellants to turn over the described property to the sheriff within 24 hours and declares that Shor, as trustee for Seashore, is the owner of the referenced properties whether or not appellants comply with the directive.

The second turnover order rendered on October 12, 2011 is entitled “Order on Toby Shor's and Seashore Investments Management Trust's Agreed Motion to Transfer Assets from Bankruptcy Trustee” and provides in pertinent part as follows:

On August 11, 2011 this Court signed a turnover order commanding Paul Black to turn over his ownership interests in various entities, real property, and personal property, to the Sheriff for levy. The order also declared that in the event that Paul Black ignored the order, Shor was the owner of those assets.⁴

While Shor's application for turnover relief was pending, Paul Black, pursuant to a proposed settlement, which was subject to Bankruptcy Court approval, conveyed these interests, to Michael B. Schmidt, Chapter 7 Bankruptcy Trustee (“Trustee”) in the BNP Petroleum and BNP Oil & Gas Bankruptcy Cases, which are pending in the Southern District of Texas. That proposed settlement with Paul Black and the Trustee was not approved by the Bankruptcy Court. Upon application by the Trustee, the Bankruptcy Court recently held that the Trustee was in possession of such interests, and that, since the settlement offered by Black was not approved by the Bankruptcy Court, it was appropriate for the Trustee to turn over these interests. Specifically, the bankruptcy court held:

The Court finds further that in the event that Nueces County Court at Law # 3 enters an Order that requires the Trustee to turn over the property to Toby Shor, Trustee, then this court will approve and authorize the Trustee to so turn over the interest. The Court also finds that, as an alternative, the Court should authorize

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