Jack M. Sanders Family Ltd. v. Roger T. Fridholm Revocable, Living Trust, Ipg Servs. Corp.

• Decision Date: 22 April 2014
• Docket Number: No. 01–13–00576–CV.,01–13–00576–CV.
• Citation: 434 S.W.3d 236
• Parties: The JACK M. SANDERS FAMILY LIMITED PARTNERSHIP, Appellant v. ROGER T. FRIDHOLM REVOCABLE, LIVING TRUST, IPG Services Corp., Elizabeth Sanders Moore, and Jess R. Moore, Appellees.
• Court: Texas Court of Appeals

434 S.W.3d 236

The JACK M. SANDERS FAMILY LIMITED PARTNERSHIP, Appellant

v.ROGER T. FRIDHOLM REVOCABLE, LIVING TRUST, IPG Services Corp., Elizabeth Sanders Moore, and Jess R. Moore, Appellees.

No. 01–13–00576–CV.

Court of Appeals of Texas, Houston (1st Dist.).

April 22, 2014.

Jack M. Sanders, Jr., Marshall, TX, for Appellant.

H. Miles Cohn, Crain, Caton & James, P.C., Houston, TX, for Appellees.

Panel consists of Chief Justice RADACK and Justices MASSENGALE and HUDDLE.

OPINION

MICHAEL MASSENGALE, Justice.

The Jack M. Sanders Family Limited Partnership appeals from the trial court's order denying its motion to discharge and release a charging order entered in favor of appellees Roger T. Fridholm Revocable, Living Trust and IPG Services Corporation. SeeTex. Bus. Orgs.Code Ann. § 153.256 (West 2012). We hold that the order denying the motion was neither a final judgment nor an appealable interlocutory order. We therefore dismiss the appeal for lack of jurisdiction.

Background

In 2005 and 2006, Elizabeth Sanders Moore and Jess Moore guaranteed a pair of notes, one of which was held by the Roger T. Fridholm Revocable, Living Trust and one of which was held by IPG Services Corporation. The Moores defaulted on both notes, and the Fridholm Trust and IPG sued them in 2010 on the respective balances, which totaled more than $600,000. The Moores were served with process, but they failed to appear. Consequently, in October 2010, the trial court entered a default judgment in favor of the Fridholm Trust and IPG for the unpaid principal of the notes, plus pre-judgment and post-judgment interest.

Meanwhile, the Internal Revenue Service filed three notices of federal tax liens in the Harris County property records, seeking to recover more than $600,000 in unpaid federal taxes from Elizabeth.

By late 2011, the Fridholm Trust and IPG had been unable to recover on their default judgment. Elizabeth, however, held an interest in the Jack M. Sanders Family Limited Partnership (“FLP”). The Fridholm Trust and IPG therefore sought a charging order from the trial court, compelling FLP to pay them any amounts that the partnership otherwise would have paid to Elizabeth. The trial court ultimately entered an agreed charging order signed by counsel for all parties and by counsel for FLP, which was not then a party, in November 2011. The order states:

The Partnership shall not distribute to [Elizabeth] Moore any partnership distributions, profits, cash, assets, or other monies due or that shall become due to Moore, by virtue of Moore's interest in the Partnership, but instead shall pay to the [Fridholm] Trust and IPG all funds and assets whatsoever which, by virtue of Moore's interest in the Partnership would have been distributed to Moore, until the Judgments, ... have been fully paid.

In September 2012, in separate litigation among FLP, the Fridholm Trust, and IPG, the county court at law of Harrison County, Texas, issued a final declaratory judgment in which it determined that Elizabeth's interest in FLP at that time was 2.07 percent and that the total value of FLP was $1,272,190.

In November 2012, the IRS issued an Amended Conditional Commitment setting the value of Elizabeth's 2.07 percent interest in FLP at $18,434. In December 2012, the Jones Lancaster Irrevocable Living Trust (“Jones Trust”) issued a cashier's check to the IRS in the amount of $18,434, in exchange for Elizabeth's 2.07 percent interest in FLP. The IRS then issued a Certificate of Discharge in which it acknowledged the payment of $18,434 by the Jones Trust and released FLP from the tax liens on Elizabeth's assets. Elizabeth, in turn, issued an Assignment and Bill of Sale to the Jones Trust in which she assigned her entire interest in FLP in consideration for the Jones Trust's payment to the IRS.

In May 2013, FLP filed a motion seeking discharge and release of the agreed charging order. The Fridholm Trust and IPG responded by filing an application for a turnover order and appointment of a receiver to facilitate their attempts to collect on the default judgment. At that point, FLP intervened in the lawsuit, asking the trial court to reject the application for turnover order and receiver or, if the application were granted, to limit the powers of the receiver and prevent the receiver, the Fridholm Trust, and IPG from directing any post-judgment discovery or subpoenas to FLP or otherwise “interfering with FLP's business.”

Eight days after FLP filed its plea in intervention in this proceeding, the trial court denied its motion for discharge and release from the agreed charging order. The order did not explain the court's reasoning and made no mention of the plea in intervention, nor did it mention any requests for affirmative relief or defenses raised by any party. The order did not contain any language indicating that it disposed of all claims and parties in the suit. FLP filed a notice of appeal from this order.

On appeal, FLP argues, first, that the order denying its request to discharge the agreed charging order is a final judgment and therefore appealable, and, second, that the trial court abused its discretion in entering that order because Elizabeth no longer owns any interest in FLP. The Fridholm Trust and IPG agree that the order denying FLP's motion was a final judgment, but they argue that the trial court did not abuse its discretion and that FLP lacks standing to seek discharge of the charging order.

Analysis

Appellate courts generally have jurisdiction only over final judgments, although specific types of interlocutory appeals are authorized by statute. CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex.2011); see, e.g.,Tex. Civ. Prac. & Rem.Code Ann. § 51.014 (West Supp.2013) (authorizing appeals from certain interlocutory orders). There can be only one final judgment in a case, except in certain special proceedings. See, e.g., Huston v. F.D.I.C., 800 S.W.2d 845, 847 (Tex.1990) (state bank receiverships); Kelley v. Barnhill, 144 Tex. 14, 188 S.W.2d 385, 386 (1945) (probate proceedings); Christensen v. Harkins, 740 S.W.2d 69, 72 (Tex.App.-Fort Worth 1987, no writ) (severed cases). Even in such cases, the order must conclusively adjudicate some right or interest between the parties involved in that portion of the proceeding governed by the order in question. E.g., Huston, 800 S.W.2d at 847; Kelley, 188 S.W.2d at 386; Christensen, 740 S.W.2d at 72–73. In cases in which only one final judgment is possible, “when there has not been a conventional trial on the merits, an order or judgment is not final for purposes of appeal unless it actually disposes of every pending claim and party or unless it clearly and unequivocally states that it finally disposes of all claims and all parties.” Lehmann v. Har–Con Corp., 39 S.W.3d 191, 205 (Tex.2001). Finality requires that “there must be some ... clear indication that the trial court intended the order to completely dispose of the entire case.” Id. “To determine whether an order disposes of all pending claims and parties, it may of course be necessary for the appellate court to look to the record in the case.” Id. at 205–06. “For anything other than what could properly be characterized as a final judgment, mandamus is the proper form to obtain review of a trial court's post-judgment orders.” Transam. Life Ins. Co. v. Rapid Settlements, Inc., No. 01–11–00240–CV, 2011 WL 5428974, at *2 (Tex.App.-Houston [1st Dist.] Nov. 10, 2011, no pet.) (mem. op.).

A final judgment or other appealable interlocutory order is a prerequisite of this court's jurisdiction, and the question whether appellate jurisdiction exists cannot be waived or settled by agreement of the parties. See, e.g., Stine v. State, 908 S.W.2d 429, 431 (Tex.Crim.App.1995) (“It is ... fundamental that the parties of a suit can neither confer nor waive jurisdiction by agreement or consent.”); Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445–46 (Tex.1993) (subject-matter jurisdiction cannot be conferred by agreement or waived). “Appellate jurisdiction is never presumed. Unless the record affirmatively shows the propriety of appellate jurisdiction, we must dismiss.” Brashear v. Victoria Gardens of McKinney, L.L.C., 302 S.W.3d 542, 546 (Tex.App.-Dallas 2009, no pet.). Thus, we have the obligation to determine our jurisdiction when either the parties or circumstances of the appeal call it into question. Glass v. Sponsel, 916 S.W.2d 25, 26 (Tex.App.-Houston [1st Dist.] 1995, no writ).

Because jurisdiction is a threshold issue, we must address it first. Douglas v. Delp, 987 S.W.2d 879, 883 (Tex.1999). When faced with multiple jurisdictional questions, this court need not address them in a particular order. Cf. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 575, 119 S.Ct. 1563, 1565, 143 L.Ed.2d 760 (1999). We therefore consider whether the trial court's order was a final judgment first, and we can only reach the remaining issues in this case if we hold that it was.

A charging order is a creation of statute in Texas, and its sole purpose is to facilitate collection of a judgment from a judgment debtor who owns an interest in a business entity. SeeTex. Bus. Orgs.Code Ann. § 153.256. The charging order statute applicable to limited partnerships provides, in relevant part,

(a) On application by a judgment creditor of a partner or of any other owner of a partnership interest, a court having jurisdiction may charge the partnership interest of the judgment debtor to satisfy the judgment.

(b) To the extent that the partnership interest is charged in the manner provided by Subsection (a), the judgment creditor has only the right to receive any distribution to which the judgment debtor would otherwise be entitled in respect of the partnership interest.

(c) A charging order constitutes a lien on the judgment debtor's partnership interest. The charging order lien may not be foreclosed on under this code or any other law.

(d) The entry of a charging order is the...