in Re Lorie A. Pfeil and Pfeil Fitness, Inc.

• Court: Court of Appeals of Texas
• Decided: May 12, 2015
• Docket: 01-15-00433-CV
• Status: Published

Opinion

ACCEPTED 01-15-00433-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 5/12/2015 10:21:11 AM CHRISTOPHER PRINE CLERK

CASE NO. 01–15–00433–CV FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS IN THE FIRST COURT OF APPEALS, 5/12/2015 10:21:11 AM HOUSTON, TEXAS CHRISTOPHER A. PRINE _____________________________________________ Clerk

IN RE LORIE A. PFEIL AND PFEIL FITNESS, INC., Relators _____________________________________________

Original Proceeding from the County Court at Law Number Three, Harris County, Texas Trial Court Cause Number 791725 _____________________________________________

MOTION TO STAY POST–JUDGMENT DISCOVERY

LEYH, PAYNE & MALLIA, PLLC Sean M. Reagan Texas Bar No. 24046689 sreagan@lpmfirm.com 9545 Katy Freeway, Suite 200 Houston, Texas 77024 (713) 785-0881 (713) 784-0338 (Fax)

Counsel for Relators, Lorie A. Pfeil and Pfeil Fitness, Inc. TO THE HONORABLE FIRST COURT OF APPEALS:

Lorie A. Pfeil and Pfeil Fitness, Inc. move to stay any post–judgment

discovery that real–party–in–interest Carlyle/FR Houston Investors, L.P. is

attempting to conduct or will attempt to conduct in Cause No. 791725.

Carlyle/FR Houston Investors has propounded written post–judgment

discovery on both Pfeil and Pfeil Fitness which are due this month (May 13

and May 20), and obtained an order compelling Pfeil to appear for a

deposition by May 13. But Carlyle/FR Houston Investors has no right or

authority to conduct such post–judgment discovery because (1) it claims to

have assigned away all of its interest in the judgment at issue and (2) it hasn’t

existed as a legal entity for more than five years.

A. Background

Carlyle/FR Houston Investors obtained a judgment against Pfeil

Fitness and Lorie Pfeil in February 2006. (MR 2). On April 13, 2015,

Carlyle/FR Houston Investors propounded post–judgment discovery

requests on Pfeil and noticed her deposition, along with a subpoena duces

tecum. (MR 3, 4, 5). A week later, Carlyle/FR Houston Investors propounded

post–judgment discovery upon Pfeil Fitness. (MR 6). Pfeil timely quashed

the deposition. (MR 7). Carlyle/FR Houston Investors responded by filing a

motion to compel and a motion for sanctions. (MR 8). Pfeil replied by filing a

2 supplemental motion to quash and response to the motion to compel

asserting that Carlyle/FR Houston Investors had no right to conduct any

discovery because it had not existed since 2009. (MR 9).

The parties attended a hearing on the motions on April 29, 2015. At the

hearing, Carlyle/FR Houston Investors’ counsel did not dispute that his

client’s legal existence terminated in 2009. Rather, he produced a purported

assignment in which Carlyle/FR Houston Investors allegedly assigned “all of

its right, title, and interest” in its judgment against Pfeil to a third party. (MR

10). Carlyle/FR Houston Investors’ counsel curiously claimed that the

assignment—which assigned away any interest his client may have had in the

judgment at issue—gave his client the right to conduct post–judgment

discovery. (See MR 11). The trial court agreed with Carlyle/FR Houston

Investors and stated that it was entitled to hire someone to collect its

judgment even though it didn’t exist.

So, despite the undisputed facts that (1) Carlyle/FR Houston Investors

purportedly assigned all of its interest in judgment, and (2) Carlyle/FR

Houston Investors hadn’t existed as a legal entity since 2009, the trial court

granted Carlyle/FR Houston Investors’ motion to compel and ordered Pfeil to

appear for a deposition within 14 days of the court’s order. (MR 1).

3 B. Relators are entitled to a stay of all post–judgment proceedings so that the Court can decide the petition for writ of mandamus.

Texas Rule of Appellate Procedure 52.10 allows this Court to stay “any

underlying proceeding” pending this Court’s action on a mandamus

petition. Relators ask this Court to stay the arbitration proceedings while it

considers their mandamus petition.

Carlyle/FR Houston Investors claims that it “assign[ed] all of its right,

title, and interest” in the judgment at issue to a third party. (MR 10, 11).

Because Carlyle/FR Houston Investors claims to have assigned all of its

interest in the judgment at issue, it has no right to conduct post–judgment

discovery. Arthur v. Driver, 127 S.W. 891, 891 (Tex. Civ. App. 1910) (“the

owner of the judgment has exclusive control over its collection.”). Rather, the

purported assignee, as the current owner of the judgment, has the “exclusive

control” and “dominion” over the collection of the judgment at issue. Id.; see

also, River Consulting, Inc. v. Sullivan, 848 S.W.2d 165, 169 (Tex. App.—

Houston [1st Dist.] 1992, writ denied) (assignor who fully transferred all

rights and interests in causes of action had no right or interest in a suit that

sought to recover on the causes of action assigned); see also, Gulf Ins. Co. v.

Burns Motors, Inc., 22 S.W.3d 417, 420 (Tex. 2000) (an assignee stands in

the shoes of the assignor and may assert those rights that the assignor could

4 assert); Jackson v. Thweatt, 883 S.W.2d 171, 175 (Tex. 1994) (“[A]n assignee

receives the full rights of the assignor *** .”).

Additionally, Carlyle/FR Investors hasn’t existed as a legal entity since

2009. Thus, it has no authority to conduct post–judgment discovery. See TEX.

BUS. ORG. CODE § 11.356(a) (terminated entity continues to exist for three

years after termination so it can prosecute a claim).

Thus, rather than having Relators respond to post–judgment

discovery—including appearing for a deposition—from a defunct entity that

claims to have assigned all of its interest in the very judgment it now seeks to

enforce, the Court should issue a stay. A stay would prevent Relators from

incurring unnecessary fees and costs and from wasting valuable time and

resources in what amounts to an exercise in futility.

C. Prayer

FOR THESE REASONS, Relators requests that the Court grant their

motion to stay and stay all post–judgment discovery in the underlying

proceeding while the Court considers their mandamus petition.

{Signature on next page}

5 Respectfully submitted,

LEYH, PAYNE & MALLIA, PLLC

By: /s/ Sean M. Reagan Sean M. Reagan sreagan@lpmfirm.com Texas Bar No. 24046689 9545 Katy Freeway, Suite 200 Houston, Texas 77024 Telephone: 713-785-0881 Facsimile: 713-784-0884

ATTORNEY FOR RELATORS

Certificate of Service

I certify that a true and correct copy of this document has been served under the Texas Rules of Civil Procedure to all interested parties of record on this the 12th day of May 2015:

Richard T. Howell, Jr. Via Email and facsimile Buckley, Mathews, White & Howell, LLP 2401 Fountainview, Suite 1000 Houston, Texas 77057

Honorable Linda Storey Via U.S. Mail County Court at Law Number Three of Harris County, Texas 201 Caroline, 5th Floor Houston, Texas 77002

/s/ Sean M. Reagan Sean M. Reagan

6 Certificate of Conference

I conferred with counsel for Carlyle/FR Houston Investors, LP regarding whether his client is opposed to this motion to stay. Carlyle/FR Houston Investors is opposed.