Ex parte Buller

• Citation: 834 S.W.2d 622
• Decision Date: 30 July 1992
• Docket Number: No. 09-92-097,09-92-097
• Parties: Ex parte Patricia H. BULLER, Relator. CV.
• Court: Court of Appeals of Texas

Page 622

834 S.W.2d 622

Ex parte Patricia H. BULLER, Relator.

No. 09-92-097 CV.

Court of Appeals of Texas Beaumont.

July 30, 1992.

Joseph C. Hawthorn, Beaumont, for appellant.

William B. Allison, Sewell & Riggs, Mark S. Kloster, Sewell & Riggs, Ramon G. Viada, III, Sewell & Riggs, Houston, for real party in interest, FDIC.

Before BROOKSHIRE, BURGESS and WHITHAM ¹, JJ.

OPINION

BROOKSHIRE, Justice.

Patricia H. Buller's husband was Paul Buller ("Decedent"). Paul Buller died on October 25, 1985. He left a Will that was probated. The Will appointed Patricia Buller as Independent Executrix of his Estate. At the time of the Decedent's death, he owned a $100,000 Certificate of Deposit which was on deposit at the First State Bank of Lumberton. The arrangement was that this Certificate was in a bank account held jointly by the Decedent and Patricia. In addition, the Decedent was at that material time also a guarantor on certain promissory notes. These promissory notes totalled $199,553.09. These large notes were held by Beaumont Bank.

Shortly after the Decedent's death, the Beaumont Bank requested that the Decedent's estate pledge the $100,000 Certificate of Deposit as additional collateral against the promissory notes (being much larger in amount), said notes having been guaranteed by the Decedent. At some time thereafter, Patricia Buller's attorney, C. Marshall Rea, revealed and admitted to Beaumont Bank that the Certificate of Deposit had been transferred to his trust account. In January of 1986, the several promissory notes owed to Beaumont Bank, which had been guaranteed by the Decedent, went into default. In the next month of February 1986, Beaumont Bank filed a suit seeking recovery on the said notes in default. Beaumont Bank recovered a judgment in excess of $270,000 on July 21, 1986. That judgment became final and fully enforceable.

The Beaumont Bank filed an Application for Turnover Relief pursuant to TEX.CIV.PRAC. & REM.CODE ANN. § 31.002 (Vernon 1986 & Supp.1992). The Application for Turnover Relief was filed on November 23, 1987. The 58th District Court of Jefferson County heard the Bank's Application for Turnover Relief in the early part of February 1988. Patricia Buller testified at the hearing. The trial court found that the Decedent's estate was and is the owner of property described as $97,661.24, being in cash, and that this cash property was then in the possession of C. Marshall Rea, an attorney at law, and Patricia Buller, Individually, and Patricia Buller, Legal Representative of the Estate of Paul Buller.

The trial court found that the $97,661.24, being property and being in cash, was property that was owned by Patricia, Legal Representative of the Estate of Paul Buller, and that this property cannot and could not be readily attached or levied upon by ordinary legal process. Further, the trial court found that the cash property is not exempt from attachment, execution or seizure for the satisfaction of liabilities.

The Bank's Application for Turnover Relief named C. Marshall Rea as a holder of the property. The trial court took note that C. Marshall Rea may or might have filed for relief under Chapter 7 of the United States Bankruptcy Code in the Southern District of Texas prior to the commencement of the turnover proceedings before the court. The trial court also ordered Mr. Rea to keep the 58th District Court fully advised as to the date of his bankruptcy proceeding and as to the present status and continuing status thereof. Also, the district court specifically ordered Mr. Rea to not only advise the court fully as to Rea's bankruptcy proceeding but he was to advise the court as to why he had not disclosed to the court that he had filed such a bankruptcy proceeding in view of his unquestioned status as an officer of the court.

In a separate decretal paragraph, the trial court ordered Patricia H. Buller, Legal Representative of the Estate of Paul Buller, and Patricia H. Buller, Individually, to turn over $97,661.24 cash for levy to the Jefferson County Sheriff at the Jefferson County Courthouse, 1149 Pearl Street, Beaumont, Texas, on or before 4:00 p.m. on March 28, 1988. The Order for Turnover Relief was signed and entered on March 14th, 1988.

Patricia Buller, in her several capacities, appealed the turnover order. The Ninth Court of Appeals reversed. Buller v. Beaumont Bank, N.A., 777 S.W.2d 763 (Tex.App.--Beaumont 1989). One justice dissented. Then on April 3, 1991, the Texas Supreme Court reversed the Court of Appeals and affirmed the turnover order of the 58th District Court. See Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223 (Tex.1991). Beaumont Bank then timely and properly demanded Buller to deliver the money to the Sheriff in compliance with the turnover order. Buller adamantly refused. The Bank then moved to hold Patricia Buller in contempt.

After notice in the latter part of October 1991, a show cause hearing was held. Patricia Buller appeared with her counsel. She testified. The trial court conducted a full hearing and had considered among other things the pleadings and the official records on file, the testimony offered and the evidence and argument of counsel. The court made cogent findings, finding specifically that Patricia Buller, as Respondent, was guilty of violation of an order of court of March 14, 1988, in that she had not turned over any portion of the above described property as ordered. The presiding judge found that Patricia Buller was guilty of violating the court's turnover order because she had clearly failed to deliver the estate assets that the same district court had earlier found to be in her possession. The court then adjudicated Buller in contempt.

After the hearing, a Judgment of Contempt and Order of Commitment were entered on November 7, 1991 by the judge presiding in the 58th District Court of Jefferson County. The court recited in its Judgment and Order that it had heard the Respondent Patricia Buller's testimony; and although she had been given ample notice of the hearing and the proceeding, Patricia Buller provided no documentary evidence at all in support of her testimony. The court made an unequivocal finding that Patricia Buller's testimony "is not credible". The trial court further specifically found that the Respondent's refusal to comply with the court's previous Order was without substantial justification. The court decreed that Patricia H. Buller, as Legal Representative of the Estate of Paul Buller, was and is in contempt of court for violation of its previous Order.

Patricia was ordered to be placed in the County Jail of Jefferson County on November 27, 1991, and remain thereafter until she purged herself of contempt by turning over the $97,661.24 for levy to the Jefferson County Sheriff at the Jefferson County Courthouse.

Patricia Buller admitted that she had the funds in the Cayman Islands; nevertheless, she refused to abide by the turnover order and she refused to turn over the funds or any part thereof to the Sheriff or the FDIC, the successor in interest to Beaumont Bank. In middle December 1991, Patricia Buller applied to the Supreme Court of Texas for a Writ of Habeas Corpus alleging generally that she was illegally restrained of her liberty by the Jefferson County Sheriff. The Supreme Court of Texas ordered Buller to be released on bail. Then, in the latter part of April 1992, the Supreme Court of Texas denied Buller's application without prejudice, however, to refile in the Supreme Court of Texas after Buller had applied for relief in the Court of Appeals.

The Ninth Court of Appeals sitting at Beaumont, granted leave to file the petition or application for habeas corpus. The proceeding was set for oral argument and submission affording to all parties and to their counsel the full right to be heard by way of oral argument and submission. All parties signed a waiver in writing of the right to argument.

This case we perceive to be one of first impression in our State. An important issue we are to decide is the constitutionality of the turnover statute as it relates to incarceration or jailing of a respondent who contemptuously had failed to turn over money in compliance with a turnover order.

The Relator now before us, Patricia H. Buller, affirmatively admits in her pleadings that this Court of Appeals has jurisdiction pursuant to TEX. CONST. art. V, § 6; TEX.GOV'T CODE ANN. § 22.221(d) (Vernon Supp.1992); and TEX.R.APP.P. 120(c). Relator, Patricia Buller, pleads and presents to us that: the Texas Supreme Court has previously held the turnover order to be valid as against Relator as the legal representative of the estate of her late husband. Beaumont Bank, N.A. v. Buller, supra.

TEX.CIV.PRAC. & REM.CODE ANN. § 31.002 commonly known and referred to as the "Turnover" Statute, is set out in a footnote in the opinion of the Supreme Court, Beaumont Bank, N.A. v. Buller, 806 at 224, n. 1. In general, the Texas "Turnover" Statute has been described as a procedural device by which judgment creditors may reach assets of a debtor which said assets are otherwise difficult to attach or levy upon by ordinary legal process.

The opinion of the Supreme Court of Texas narrates a clear account of the actions of Patricia Buller and C. Marshall Rea. Various transfers of monies are set out. Interestingly, the $100,000 C.D. formerly in the Lumberton Bank was transferred into Mr. Rea's trust fund. According to Patricia Buller that $100,000 C.D. belonged to Paul Buller's estate. Patricia Buller acknowledged her fiduciary duties as the Independent Executrix, including an Executrix's duties to ascertain the liabilities of the estate. Patricia Buller admitted that she had transferred approximately $250,000 into an account in the Cayman Islands sometime during the summer of 1986. But Patricia stated that she could not even remember the name of the city in which the Cayman Islands account was situated. Portions of the interesting and...