Gerjets v. Davila
| Decision Date | 04 September 2003 |
| Docket Number | No. 13-01-752-CV.,13-01-752-CV. |
| Citation | 116 S.W.3d 864 |
| Parties | George M. GERJETS, Appellant, v. Jessica DAVILA, Appellee. |
| Court | Texas Court of Appeals |
Robert J. Banks, Harlingen, for appellant.
Carlos Hermenegildo Cisneros, Brownsville, for appellee.
Before Justices HINOJOSA, CASTILLO and CHAVEZ.1
In this appeal, we are asked to consider whether: (1) a district court can order a non-judgment debtor not properly before the court to turn over funds at issue in another lawsuit and in which the non-judgment debtor claims an interest; and (2) whether a party so ordered can appeal from that order. We hold that: (1) without proper notice, a court cannot order a non-judgment debtor to turn over funds at issue in another lawsuit in which the nonjudgment debtor claims an interest; and (2) a non-judgment debtor who is not properly before the court, but is nonetheless aggrieved by a turnover order, may appeal such an order. We, therefore, reverse and remand.
Jessica Davila, appellee, obtained a judgment in excess of $100,000 against Valley Nissan, Inc. ("Valley Nissan") in 1997 in the 107th District Court of Cameron County. Valley Nissan appealed the judgment, but never filed a supersedeas bond.2 At the time the judgment was pending, appellant, George Gerjets, was the president, sole shareholder, and chief executive officer of Valley Nissan. On October 1, 1999, Valley Nissan was sold to B & T Nissan, Inc. In a post-judgment deposition, Gerjets testified that several used cars, obsolete tools, and equipment were not included in the sale.3 He further testified that after the sale, the remaining assets were distributed to Valley Nissan's creditors. He was one of those creditors and received the cars and other equipment. After the distribution of the assets, Valley Nissan, according to Gerjets, was dissolved.
On September 8, 1999, Gerjets d/b/a Valley Nissan entered into an auction agreement with James Dunn for the auction of the used cars, tools, and equipment. The auction was held on October 23. Thereafter, a dispute arose between Gerjets and Dunn over the amount of money collected. When the dispute was not resolved, Gerjets filed suit in the 103rd District Court for an accounting and other causes of action.4 On or about October 5, 2001, Davila intervened in that lawsuit.
On September 21, 2001, Davila obtained an ex-parte turnover order and temporary restraining order from the 107th District Court, and a modified ex-parte turnover order and temporary restraining order on October 2, 2001. The modified order ordered James C. Dunn, his attorney, William Hubbard, "Valley Nissan Inc., by and through George Gerjets and George Gerjets" to turn over the monies in dispute in the Gerjets/Dunn lawsuit in the 103rd District Court to Juan Magallanes, who was appointed as a receiver to take control of the funds. The order also set a hearing on the permanent injunction for October 5, 2001 and directed the clerk of the court to issue notice to Dunn, Gerjets, and Hubbard to appear for the hearing.
Dunn, through his attorney, Hubbard, filed an objection to the disbursement of the funds on October 4. On October 5, Hubbard appeared before the court and announced that he had entered into an agreement whereby he would deliver the funds to the receiver, who, in turn, would turn the funds over to Davila's attorney for safekeeping in the attorney's trust account. Robert Banks, who represented Valley Nissan in Davila's underlying lawsuit and represented Gerjets in the Gerjets/Dunn lawsuit, also appeared at the hearing. Banks informed the court that he was appearing because he had been served, but that neither the judgment creditor, Valley Nissan, nor Gerjets had been served with the (restraining) order.
No witnesses were called at the hearing. Without objection, Davila introduced the auction agreement between Gerjets and Dunn and the pleadings from the Gerjets/Dunn lawsuit in the 103rd District Court. After arguments of counsel, the court issued an order ordering that the disputed monies be turned over to Davila's attorneys and granting a permanent injunction in Davila's favor. The order found that Valley Nissan and Gerjets had failed to show: (1) that the court's final judgment against Valley Nissan was other than final and enforceable; (2) that the cars and equipment auctioned by Dunn were not inventory belonging to Valley Nissan at the time of trial; (3) that the monies obtained from the auction should not be applied to the judgment; (4) that a supersedeas bond was posted; (5) that the monies from the auction were exempt property; and (6) that there was no danger of dissipating said monies. The court then ordered that the monies be deposited in the trust account of Cisneros & Mattingly, P.C., Davila's attorneys, pending resolution of the appeal of her underlying lawsuit. The order also ordered Gerjets to pay interim attorney fees and expenses.
In his first issue, Gerjets argues that the court lacked jurisdiction to issue the order because it was being enforced against nonjudgment debtors, himself and Dunn.5 Gerjets also contends he was not served with Davila's motion for ex parte turnover, the order setting hearing on October 5, or with the order granting permanent injunction in Davila's favor. Davila, on the other hand, cites Stroud v. Stroud, 733 S.W.2d 619, 620 (Tex.App.-Dallas 1987, no writ), in support of her argument that Gerjets has no standing to appeal the order because he is appealing as an individual and is a stranger to the order. Davila further cites Tex Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex.1993), in support of the proposition that standing requires the existence of a real controversy between the parties. Davila argues that Gerjets is not a party to her judgment against Valley Nissan, and thus has no standing to appeal the trial court's granting of the turnover order.
The turnover statute, found in section 31.002 of the civil practice and remedies code, is a procedural mechanism by which a judgment creditor can reach assets of a judgment debtor that are otherwise difficult to attach or levy on by ordinary legal process. See Tex. Civ. Prac. & Rem.Code Ann. § 31.002 (Vernon Supp. 2003); Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 224 (Tex.1991). The statute provides that:
(a) A judgment creditor is entitled to aid from a court of appropriate jurisdiction through injunction or other means in order to reach property to obtain satisfaction on the judgment if the judgment debtor owns property, including present or future rights to property, that:
(1) cannot readily be attached or levied on by ordinary legal process; and
(2) is not exempt from attachment, execution, or seizure for the satisfaction of liabilities.
(b) The court may:
(1) order the judgment debtor to turn over nonexempt property that is in the debtor's possession or subject to the debtor's control, ...
TEX. CIV. PRAC. & REM. CODE ANN. § 31.002 (Vernon Supp.2003).
We review the issuance of the turnover order and permanent injunction under an abuse of discretion standard. Buller, 806 S.W.2d at 226. A trial court abuses its discretion when it acts in an unreasonable or arbitrary manner or, stated differently, acts "without reference to any guiding rules and principles." Id. In the context of turnover orders, a trial court's issuance of a turnover order, even if predicated on an erroneous conclusion of law, will not be reversed for abuse of discretion if the judgment is sustainable for any reason. Id. (). We will now consider whether the trial court abused its discretion in including Gerjets in the order without giving him notice of the order and hearing.
We first note that no temporary injunction shall be issued without notice to the adverse party. Tex.R. Civ. P. 681; PILF Invs., Inc. v. Arlitt, 940 S.W.2d 255, 260 (Tex.App.-San Antonio 1997, no writ) (notice on a motion for injunctive relief is inadequate to the extent a non-movant party, who is ultimately enjoined, is not served...
To continue reading
Request your trial
-
In re Old Am. Cnty. Mut. Fire Ins. Co.
...448 F.3d 317, 324 (5th Cir. 2006); Maiz v. Virani, 311 F.3d 334, 336 (5th Cir. 2002); Resolution Trust Corp., 53 F.3d at 80; Gerjets v. Davila, 116 S.W.3d 864, 869 (Tex. App.—Corpus Christi 2003, no pet.); Bay City Plastics, Inc., 106 S.W.3d at 324-25; Cross, Kieschnick & Co., 892 S.W.2d at......
-
Allison Publications, LLC v. Doe
...restraining order to prevent the secreting of assets, or a writ of garnishment to impound Allison's nonexempt property? See Gerjets v. Davila , 116 S.W.3d 864, 867 (Tex. App.—Corpus Christi-Edinburg 2003, no pet.) (turnover order and TRO); Patriot Residential Mgmt. Servs., LLC v. Wells Farg......
-
Alexander Dubose Jefferson & Townsend LLP v. Chevron Phillips Chem. Co., L.P.
...a trial court could not order property turned over when a third party claimed an ownership interest in the property), Gerjets v. Davila , 116 S.W.3d 864, 868–70 (Tex. App.–Corpus Christi 2003, no pet.) (holding the trial court abused its discretion by ordering an executive to turn over asse......
-
Carmack v. Park Cities Healthcare, LLC
...on the reach of the turnover statute arise out of due process concerns. Bollore, 448 F.3d at 323-24; see also Gerjets v. Davila, 116 S.W.3d 864, 869 (Tex. App. 2003). Here, Tenants were neither parties to the original lawsuit or the final judgment. Plaintiffs failed to present evidence that......