Mitchell v. Turbine Resources Unlimited, Inc.

523 S.W.3d 189, 2017 WL 1181228
CourtCourt of Appeals of Texas
DecidedMarch 30, 2017
DocketNO. 14-15-00417-CV, NO. 14-16-00102-CV
StatusPublished
Cited by24 cases

This text of 523 S.W.3d 189 (Mitchell v. Turbine Resources Unlimited, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mitchell v. Turbine Resources Unlimited, Inc., 523 S.W.3d 189, 2017 WL 1181228 (Tex. Ct. App. 2017).

Opinion

OPINION

J. Brett Busby, Justice

■ In this consolidated appeal and petition for writ of mandamus, Jennifer Mitchell and Turbine Component Super Market, LLC (TCSM) challenge four trial court orders signed in a post-judgment receivership proceeding. The underlying judgment was rendered in favor of- Turbine Resources Unlimited (Turbine) against Tom George and International A., Inc. Appellants Mitchell and TCSM were not parties to the original judgment, but intervened post-judgment to protect their interest in property included in the court’s turnover order and receivership. The first challenged order, signed on September 24, 2014, authorized the receiver to sell assets that appellants contend belonged to TCSM and two vehicles that Mitchell claimed she owned. Following an evidentiary hearing, in which Mitchell testified, the trial court signed two additional orders: the April 14, 2015 order denying Mitchell’s fourth- motion to modify-the court orders authorizing sale, and the June 2, 2015 order approving the sale of property that appellants contend belonged to TCSM, Appellants, later filed a motion to set aside the. master’s reports as void, which the trial court denied.

Mitchell and TCSM ask this Court to vacate these orders as well, as the January 2, 2014 order adopting- the first master’s report and the September 5, 2014 order adopting the second master’s report, upon which the orders of sale are based. We conclude that: this Court lacks jurisdiction over appellant^’ challenge i to the trial court’s September 24, 2014 order of sale; the trial court did not err in denying the motion to modify court orders and signing the June 2, 2015 order of sale; and thg trial court did not clearly abuse its discretion in denying the motion to set aside the master’s reports. We therefore overrule appellants’ issues, affirm the. April 14 and June 2, 2015 orders, and deny the petition for writ of mandamus, -

Background

A, Initial judgment and appointment of master and receiver

This dispute arose from a suit Turbine filed in 2004 against -International A, Inc. and Tom George for breach of contract and failure to make payment on a sale of equipment. The trial court granted summary judgment in Turbine’s- favor in 2006, and Turbine served a writ of execution on George and International A. On December 8, 2006, the trial court signed a turnover order, appointing a receiver. That same day, George filed for chapter 13 bankruptcy protection. George listed his employer as TCSM and his salary as $2,000 .per month. The bankruptcy petition was later dismissed because George did not appear for the creditors’, meeting.

In October 2007, the trial court signed a supplemental turnover order, appointing a receiver and master in chancery to collect the unpaid final judgment of $188,246.94 [192]*192plus $10,000 in attorney’s fees. The supplemental order placed Tom George and International A under the receivership and appointed Riecke Baumann as master and receiver.1 See Tex. R. Civ. P. 171; Tex. Civ. Prac. & Rem. Code Ann. § 31.002 (West 2015). The court gave the receiver “full power and authority to take possession of all non-exempt property of every defendant that is in any defendant’s actual or constructive possession or control.” The order also authorized the receiver to order “from all defendants and third parties” the production and turnover of assets, evidence, and documents upon all matters he believed pertain to compliance with the order.

The trial court found George in contempt for knowingly and intentionally violating multiple turnover orders,2 a compulsion order, and a Rule 11 agreement in which George had promised to make payments to the receiver. The court also found Geoi-ge in contempt for interfering with the receiver’s performance of his duties, thwarting the sale of certain property, failing to notify the receiver of the existence of other property, failing to turn over property, and delivering property to other individuals in an effort to hide the property from the receiver.

B. Master’s Reports

The receivership has had a convoluted procedural history, which we explain in some detail to provide context for the parties’ arguments. The receiver, acting in his capacity as master, filed multiple master’s reports containing his findings. In November 2013, the receiver filed the first master’s report, which the trial court adopted and signed on January 2, 2014. The report made the following findings:

• George is the sole owner of the defendant company, International A, Inc., and another company, TCSM. International A, Inc., is defunct (if it ever existed) and TCSM has a forfeited corporate status. According to the records from the Texas Secretary of State, TCSM was formed on January 26, 2005. The franchise was involuntarily ended, but was reformed on November 16, 2007, eleven months after George’s nonexempt assets were placed into receivership, including the assets that were used to create TCSM. George’s transfer of assets to TCSM was, therefore, void. The corporation was formed for the purpose of hiding assets from the receivership. George has refused to provide proof that anyone else owns TCSM. As there is no proof that TCSM is a corporation, George is its sole proprietor.
• George has used TCSM to fund personal expenses, has co-mingled personal and company funds, and has made TCSM a device by which he has hidden assets from receiver’s collection.
• TCSM is George’s alter ego. International A, Inc. and TCSM have never existed as corporations and George has always operated them as sole proprietorships to hide assets and pay his personal expenses.
• George is a convicted felon, having pled guilty to fraud in January 2009 in the United States District Court for the Southern District of Texas. To satisfy the plea deal he made with [193]*193the United States, George paid $250,000 to the United States during the receivership, without advising Receiver.
• George has never accounted for the source of the $250,000, except to claim that $100,000 was lent to him by TCSM and the remainder were loans from family members. No proof or documentation has been provided to prove these loans; the undocumented $100,000 loan from the business is further proof that TCSM is George’s alter ego and sole proprietorship.
• On January 6, 2012, the trial court found George to be in contempt of court for not advising the receiver of the sources of the $250,000 George paid the Government to satisfy the plea deal. The contempt order found George knowingly and intentionally violated every order issued by the trial court, including the turnover orders.
• George represented to the court that he lived with his wife, Dorothy George, at 12445 Memorial Drive, Houston, Texas 77024. However, on September 15, 2009, George began leasing an apartment at One Park Place, 1400 McKinney Street, Unit 808, Houston, Texas 77010. The residents of the apartment are George and his girlfriend, Jennifer Mitchell.
• The lease for the apartment is in the name of TCSM, LLC. Included in George’s lease application is his business card, which lists his title as President of TCSM, LLC. His application also states that he is self-employed, affirming that TCSM, LLC is his d/b/a and that TCSM is not an LLC.

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Bluebook (online)
523 S.W.3d 189, 2017 WL 1181228, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mitchell-v-turbine-resources-unlimited-inc-texapp-2017.