Moyer v. Moyer

• Citation: 183 S.W.3d 48
• Decision Date: 17 August 2005
• Docket Number: No. 03-04-00444-CV.,03-04-00444-CV.
• Parties: Gary L. MOYER, Appellant, v. Marsha Ann MOYER, Appellee.
• Court: Court of Appeals of Texas

Page 48

183 S.W.3d 48

Gary L. MOYER, Appellant, v. Marsha Ann MOYER, Appellee.

No. 03-04-00444-CV.

Court of Appeals of Texas, Austin.

August 17, 2005.

COPYRIGHT MATERIAL OMITTED

Keith M. Remels, Pollicoff, Smith & Remels, L.L.P., Houston, for appellant.

Laurie Nowlin, Akins & Nowlin, LLP, Round Rock, Timothy M. Sulak, Morris, Craven & Sulak, LLP, Pamela Stanton Baron, Austin, for appellee.

Before Chief Justice LAW, Justices B.A. SMITH and PEMBERTON.

OPINION

BOB PEMBERTON, Justice.

This is an appeal from an order granting turnover relief and appointing a receiver and master in chancery who had participated in the underlying action as a testifying expert. In the underlying action, appellee Marsha Ann Moyer was awarded a divorce from appellant Gary Moyer, actual damages for intentional infliction of emotional distress, and punitive damages.¹ Gary did not supersede the judgment. It is undisputed that, following the verdict, Gary assigned property of his wholly-owned corporation to a pair of newly-created foreign limited partnerships in which he had controlling interests; he also assigned certain real property from the corporation to himself individually and proceeded to claim it as his homestead. Based on evidence of these transactions, Marsha obtained the order on appeal in this proceeding.

In eight issues, Gary argues that the district court abused its discretion because (1) the turnover relief ordered by the district is insufficiently specific regarding the property to be turned over and extends to exempt property; (2) the appointed receiver had an interest in the underlying litigation and the district court improperly awarded him fees without a showing of reasonableness or completed work; and (3) there was no showing of good cause to appoint a master in chancery, the appointee had an interest in the litigation, and was not a licensed attorney. We will reverse and remand the order as it pertains to the turnover, the receiver appointed, and the receiver's fee. We are without jurisdiction to consider the issues related to the appointment of a master in chancery.

BACKGROUND

In this cause, Marsha sought a range of remedies to aid in enforcing her judgment against Gary in the underlying action. The district court heard evidence that, around the time the court rendered judgment on the jury's verdict, Gary undertook a series of transactions that had the effect of:

• transferring the business assets of his wholly-owned Texas corporation, Paper Resources International, Inc. — including office equipment, intellectual property, tax credits, and accounts receivable — to a newly-created Alaska limited partnership, Paper Resources International L.P., which Moyer subsequently designated as the successor to his Texas corporation;

• transferring certain land and assets "pertinent to the land" — including livestock, horses, a sprayer, a truck, trailers, heavy equipment, and a welder — from the Texas corporation to a newly-created Alaska limited partnership, Florence Investments L.P.;

• transferring the Texas corporation's 100 acres of remaining land to Gary individually, who proceeded to claim the property as his homestead; and • placing control of both limited partnerships in Gary, who had 98% limited partnership interests in both,² as well as 100% membership in each limited partnership's general partners, a pair of newly-created West Indies limited liability corporations. The general partner of Paper Resources International L.P. was Paper Resources Management, L.L.C.; the general partner of Florence Investments L.P. was Florence Investments Management, L.L.C.

The principal place of both limited partnerships was the same Florence, Texas, address as the original Texas corporation.³

Although admitting to an earlier utterance that he had wanted to "preserve something for myself," Gary insisted that there was nothing "illegal or immoral" about these transactions. He emphasized that, in the underlying action, the issue of whether Paper Resources International, Inc. was his alter ego had been submitted to the jury, which had found in the negative. Gary concluded that because only he, and not Paper Resources International, Inc., was a judgment debtor, nothing prevented the company from restructuring and transferring its assets so as to avoid entanglement with Gary's personal legal problems. As he put it, "Paper Resources is and was a separate entity from me, and I had a responsibility to do the best I could by those companies to keep them from being subject to anything that would go wrong with me."

Marsha characterizes the transactions as a "pattern of shifting funds and assets to avoid execution" on the unsuperseded judgment. At the close of the hearing, the district court granted the remedies Marsha had requested, including (1) a temporary injunction barring Gary from transferring assets related to his businesses; (2) a charging order against Gary's interests in the two limited partnerships, see Tex.Rev.Civ. Stat. Ann. art. 6132a-1 (West Supp.2004-05); (3) a turnover order; and (4) the appointment of Steve Pena, an accountant who had served as Marsha's damages expert in the underlying case, as both receiver and master in chancery, and awarding him fees. Gary largely did not contest either the injunction or the charging order, and neither are at issue on appeal,⁴ but contends that the district court abused its discretion with regard to other relief it ordered.

DISCUSSION

Gary brings eight issues in which he challenges the district court's order of turnover relief, its appointment of Pena as receiver, its fee award to Pena, and its appointment of Pena as master in chancery.

Standard of review

We review a turnover order, an appointment of a receiver, and an award of fees to the receiver for an abuse of discretion. See Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex.1991); Roebuck v. Horn, 74 S.W.3d 160, 163 (Tex.App.-Beaumont 2002, no pet.); Stanfield v. Stanfield, No. 09-99-00453-CV, 2000 WL 1475853, at *5, 2000 Tex.App. LEXIS 6743, at *14 (Tex.App.-Beaumont 2000, no pet.) (not designated for publication); Rusk v. Rusk, 5 S.W.3d 299, 306-07 (Tex.App.-Houston [14th Dist.] 1999, pet. denied); see also Fortenberry v. Cavanaugh, No. 03-04-00816-CV, 2005 WL 1412103, at *2-4, 2005 Tex.App. LEXIS 4665, at *5-6 (Tex.App.-Austin 2005, no pet. h.) (mem. op.); Schulze v. Cap Collection JV7, No. 03-03-00390-CV, 2004 WL 2108730, at *3, 2004 Tex.App. LEXIS 8454, at *8 (Tex. App.-Austin Sept. 23, 2004, pet. filed) (mem.op.). A trial court may be reversed for abusing its discretion if we find that it acted in an unreasonable or arbitrary manner, without reference to any guiding rules and principles. Beaumont Bank, N.A., 806 S.W.2d at 226.

Turnover relief

Gary asserts in his first issue that the district court's turnover order constitutes an abuse of discretion because it fails to identify specific non-exempt property to be turned over. In his second, somewhat overlapping issue, he contends that the turnover order impermissibly extends to exempt property. 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 Supp.2004-05); Beaumont Bank, N.A., 806 S.W.2d at 224. To obtain relief under the "turnover statute," section 31.002 of the civil practices and remedies code, 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(a). The district court made the following findings regarding these statutory elements:

1. Defendant owns property described as 100% membership interest in Paper Resources Management, L.L.C. and 100% membership interest in Florence Investments Management, L.L.C. Paper Resources Management, L.L.C. is purportedly the general manager of Paper Resources Limited Partnership, and Florence Investments Management, L.L.C. is purportedly the general manager of Florence Investments Limited Partnership. Paper Resources Limited Partnership is purportedly the successor of Paper Resources International, Inc., of which Defendant is the sole owner, officer, and director;

2. These properties are not exempt under any statute from attachment, execution or seizure for the satisfaction of liabilities.

3. These properties cannot readily be attached or levied upon by ordinary legal process.

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 "appoint[ing] 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." Id. § 31.002(b). Here, the district court appointed Steve Pena as receiver and vested him with the following powers:

all the power and authority to take possession of all nonexempt property of Gary Moyer that is in the actual or constructive possession or control of Gary Moyer, including but not limited to all property incidental to or associated with the daily operations of Paper Resources International, Inc., Paper Resources Management, L.L.C., and Florence Investments Management, L.L.C., including but not limited to all cash, accounts receivable, notes receivable, promissory notes, drafts and checks, monies on deposit in financial institutions, financial accounts (bank accounts), certificates of deposit, money market accounts, accounts held by any third party, stocks,...