Schultz v. Fifth Judicial Dist. Court of Appeals at Dallas

Decision Date12 June 1991
Docket NumberNo. D-0547,D-0547
Citation810 S.W.2d 738
PartiesF. Michael SCHULTZ, Relator, v. The FIFTH JUDICIAL DISTRICT COURT OF APPEALS AT DALLAS and the Honorable Martin Richter, Judge, County Court at Law Number Two, Dallas County, Texas, Respondents
CourtTexas Supreme Court
OPINION

GAMMAGE, Justice.

The issue in this original mandamus proceeding is whether a court of appeals abuses its discretion when it declines to entertain a contempt motion based on a turnover order that is the subject of the appeal then pending in the court of appeals. We hold that a post-judgment turnover order is an appealable final judgment and, consequently, subject to the rule that jurisdiction to hear contempt motions for violation of the order being appealed lies in the appellate court where the appeal is pending. We therefore conditionally grant the writ of mandamus because the court of appeals has declined to exercise its exclusive jurisdiction and misled the trial court into assuming jurisdiction when it has none.

The underlying dispute began as a collection suit in Dallas County Court at Law Number Two. Sunbelt National Bank sued Michael Schultz and another person on their respective guaranties of a note. Schultz failed to answer and the trial court rendered an interlocutory default judgment for $43,725.08 against him. Bank regulators declared Sunbelt National Bank insolvent and placed it in receivership. The federal regulatory authorities sold the note and rights in the pending suit to The Cadle Company, an Ohio corporation, which was substituted as plaintiff. The other defendant was nonsuited in 1989 and the default judgment against Schultz became final. There was no appeal of this underlying default judgment.

Schultz is a physician. He receives regular income from a professional association (Central Texas Women's Clinic). The Cadle Company instituted a number of collection proceedings against Schultz, including seeking a "turnover order" 1 in May 1990 to reach his income from the clinic. On October 5, 1990, the trial judge signed a turnover order appointing a receiver and directing that as he received them Schultz should turn over his paychecks from the Central Texas Women's Clinic to the receiver. The order further directs the receiver to disburse fifty percent of the proceeds of each check to The Cadle Company, deduct the receiver's fees and expenses from the other half and then remit the remainder to Schultz. Schultz duly perfected an appeal of the turnover order to the Fifth Court of Appeals. 2

Schultz filed a supersedeas bond to the turnover order. 3 The first date specified in the order for Schultz to turn over his clinic paycheck to the receiver was three days after filing the supersedeas bond. When Schultz failed to give the check to the receiver, The Cadle Company filed a motion for leave to file a contempt motion in the court of appeals. The court of appeals denied leave to file with an order reciting:

The trial court retains jurisdiction to enforce by contempt its judgments and orders in aid of execution, notwithstanding the perfection of an appeal. See Sullivan v. Sullivan, 719 S.W.2d 239 (Tex.App.--Dallas 1986, no writ). Therefore, the October 23, 1990 motion of relator The Cadle Company for leave to file motion for contempt is DENIED.

The order's practical effect was that the court of appeals directed the trial court to entertain jurisdiction of the contempt motion the appellate court had refused to hear. The Cadle Company then filed its motion for contempt in the trial court. Schultz filed his objection to the jurisdiction of the trial court, which that court overruled by pronouncement and notation on a docket entry, which was subsequently reduced to writing on December 10, 1990. Schultz sought mandamus relief in the court of appeals to the trial court's assumption of jurisdiction over the contempt motion, but the appellate court denied leave to file the petition for writ of mandamus. Schultz then sought mandamus relief in this court. In the meantime, the trial court heard the contempt motion, and, by order also dated December 10, 1990, found Schultz in contempt for violating the turnover order and directed that he be committed to jail. 4 On December 11, 1990, we granted Schultz leave to file his petition for writ of mandamus and issued a stay order preventing further action on the turnover order by the lower courts. 5

At the outset we are confronted with the issue of whether the turnover order was a final, appealable "judgment." 6 It is true that the usual writs and orders to aid in execution to collect a final money judgment are not, in general, appealable orders. Pierson v. Hammond, 22 Tex. 585 (1858). But the turnover statute authorizes more than just a writ of execution or an order incident to such a writ. The statute requires a factual showing that the judgment debtor has non-exempt property that is not readily subject to ordinary execution. It may be against one or more parties other than the judgment debtor. Upon proof of the necessary facts, it authorizes the trial court to order affirmative action by the judgment debtor and others to assist the judgment creditor in subjecting such non-exempt property to satisfaction of the underlying judgment. Such an order acts as a mandatory injunction against the judgment debtor and, if there are such parties, against the receiver and any third parties interested in the property rights being adjudicated. If a turnover order that acts as a mandatory injunction is not appealable, third parties potentially aggrieved by the order have no right of appellate review to protect their affected property interests.

It is well established that a post-judgment order against the judgment debtor for asset discovery under the bill of discovery rule 7 is an appealable final judgment. Texas Wheat Growers' Ass'n v. Gough, 70 S.W.2d 818 (Tex.Civ.App.--Amarillo 1934, writ ref'd); Chapman v. Leaverton, 263 S.W. 1083 (Tex.Civ.App.--Fort Worth 1924, writ ref'd). Similarly, orders directing discovery against third parties against whom suits are not contemplated that are ends in themselves, resolving all discovery issues between the bill of discovery plaintiff and the discovery defendant, are final and appealable because they act as mandatory injunctions against the discovery defendant. Dallas Joint Stock Land Bank v. State, 135 Tex. 25, 137 S.W.2d 993 (1940); Dallas Joint Stock Land Bank v. Rawlins, 129 S.W.2d 485 (Tex.Civ.App.--Dallas 1939, orig. proceeding); see also Whatley v. King, 151 Tex. 220, 249 S.W.2d 57 (1952). The turnover order at issue in this case resolved the property rights issues and acted as a mandatory injunction as to the judgment debtor Schultz and the receiver. We therefore hold that the turnover order was in the nature of a mandatory injunction 8 and was appealable.

For appealable orders in the nature of an injunction, 9 in which the validity of the order alleged to...

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