Spates v. Office of Attorney General

485 S.W.3d 546, 2016 Tex. App. LEXIS 881, 2016 WL 354417
CourtCourt of Appeals of Texas
DecidedJanuary 28, 2016
DocketNO. 14-14-00741-CV
StatusPublished
Cited by13 cases

This text of 485 S.W.3d 546 (Spates v. Office of Attorney General) 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
Spates v. Office of Attorney General, 485 S.W.3d 546, 2016 Tex. App. LEXIS 881, 2016 WL 354417 (Tex. Ct. App. 2016).

Opinion

OPINION

Ken Wise, Justice

The Office of the Attorney General, Child Support Division (“the OAG”), intervened in a lawsuit between Prodigy Services, LLC and Eni U.S. Operating Company, seeking to collect on three child support liens against Christopher Spates. Spates, a member and the owner of Prodigy, was not a party to the lawsuit. The trial court granted a charging order in favor of the OAG against Spates’s membership interest in - Prodigy, requiring Prodigy to pay the amounts of unsatisfied child support judgments against Spates out of any distribution to which Spates would otherwise be entitled by virtue of his membership interest in Prodigy. On appeal, Spates and Prodigy contend that the trial court lacked personal jurisdiction over. Spates and..subject matter jurisdiction to issue the charging order because the trial court was not one of the three courts in which the child support judgments were issued1 against Spates. Spates and Prodigy also contend that the trial court abused its discretion in granting the OAG’s motion for a charging order against Spates because the OAG failed to follow the procedures for obtaining a charging order. We dismiss Spates’s appeal and affirm the trial court’s judgment.

Factual and PROCEDURAL BackgRound

Christopher Spates is the owner and sole member of Prodigy, a limited liability company organized under Texas law with its place- of business in Harris County.1 In June 2012, Prodigy sued Eni for breach of contract and tortious interference with contract in the 234th District- Court in [549]*549Harris County. Attached to Prodigy’s petition was the contract between Prodigy and Eni, which Spates signed as Prodigy’s owner.

In September 2013, Spates was deposed in the lawsuit. Immediately after that, the OAG made an appearance, filing three child support liens against Spates’s interest in the proceeds -in Prodigy’s suit against Eni.2 See In re Prodigy Servs., LLC, No. 14-14-00248-CV, 2014 WL 2936928, at *1 (Tex.App.-Houston [14th Dist.] June 26, 2014, orig. proceeding) (mem.op.).

The three liens were based on three child support judgments naming Spates as the obligor. Each lien provided that, it “attaches to all nonexempt real and/or personal property of the above-named obligor which Is located or existing within this State/coünty of filing, including any property specifically described bélow.” The property described was “Any and All proceeds in the following: Prodigy' Services LLC [v.] Eni Operating Co, Inc.; Cause No. 201235849[.]”

The following month, Prodigy and Eni entered into a mediated settlement agreement in which Prodigy was to receive $257,600 from Eni. See id. On Eni’s motion, the trial court ordered the settlement funds deposited into the registry of the court. Id.

The OAG then filed a request for a charging order, attaching three notices of child support liens based on judgments naming Spates as the obligor. The OAG requested an order charging Spates’s membership interest in Prodigy in the amount of $82,730.64, representing the total of the amounts owed on the three judgments. The OAG also requested an order requiring Prodigy to distribute all cash and assets due Spates directly to the registry of the court until the unsatisfied child support liens- had been satisfied, and an order requiring the court clerk to disburse funds directly from the court registry to satisfy the child support liens.

In response, Prodigy requested that the trial court deny the OAG’s requests and disburse the settlement funds directly from the registry of the court .to Prodigy. On December 16, 2013, the trial court issued an order denying-Prodigy’s motion to disburse the funds. Prodigy filed a motion for clarification of the trial court’s order and set the motion for hearing. At the hearing, the trial court stated that it would not “take any action” on the motion because “[tjhere’s nothing for me to do.”

On March 28, 2014, Prodigy filed a petition for writ of mandamus, Among other things, Prodigy requested this Court to order the trial court to disburse the settlement funds to Prodigy. See id. at *1. On June 26, 2014,' this Court granted that portion of Prodigy’s petition for writ of mandamus, holding that the trial court abused its discretion by not granting Prodigy’s motion to disburse the settlement funds to Prodigy. Id.- at *7. On July 21, 2014, the trial court signed an order setting aside its December-16 order and an order disbursing the settlement funds to Prodigy.

On July 22, 2014, the' OAG filed an application for entry of the previously requested charging Order. The trial court signed a charging order against Prodigy on July 28, 2014, attaching the three final judgments representing the unsatisfied child support arrearages that were the subject of the earlier liens, now totaling $94,376.54. The order recites that the trial couri-

[550]*5501. GRANTS the ORDER charging the membership interest of CHRISTOPHER SPATES in PRODIGY SERVICES, LLC, in the amount of $94,376.54 for payment .of child support judgment/liens attached as Exhibit A, Exhibit B, and Exhibit C,
2. ORDERS PRODIGY SERVICES, LLC upon distribution of funds due CHRISTOPHER SPATES [to pay such funds] to the TEXAS STATE DISBURSEMENT UNIT until the unsatisfied child support judgments attached as Exhibit A, Exhibit B, and Exhibit C, have been fully paid and satisfied.

The order also provided the address to which the funds were to be sent and identified the amounts to be issued to each of the three mothers to whom Spates owed unpaid child support.3 This appeal followed.4

Analysis op Spates’s and Prodigy’s Issues

In their first issue, Spates and Prodigy challenge the trial court’s personal jurisdiction over Spates and its subject matter jurisdiction to enter the charging order. In their second issue, Spates and Prodigy contend that the OAG failed to follow the procedure for obtaining a charging order because the OAG did not serve Spates or give him notice of its request for a charging order. As an initial matter, however, we must determine whether we have jurisdiction over Spates’s and Prodigy’s appeal.

I. Appellate Jurisdiction over Spates’s and Prodigy’s Appeal

An appellate court must independently determine whether it has jurisdiction over an appeal, even if no party contests jurisdiction. M.O. Dental Lab. v. Rape, 139 S.W.3d 671, 673 (Tex.2004) (per curiam). We conduct this inquiry sua sponte because jurisdiction is fundamental in nature and may not be ignored. Royal Indep. Sch. Dist. v. Ragsdale, 273 S.W.3d 759, 763 (Tex.App.-Houston [14th Dist.] 2008, no pet.). If the present case is an appeal over which we have no jurisdiction, the appeal must be dismissed. Id.

A. This Court’s Jurisdiction over Spates

Spates was not a party to the case below, nor did he attempt to intervene in the case to challenge the OAG’s action. Standing is a component of subject matter jurisdiction, and appellate standing is generally afforded only to parties of record. State v. Naylor,

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Bluebook (online)
485 S.W.3d 546, 2016 Tex. App. LEXIS 881, 2016 WL 354417, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spates-v-office-of-attorney-general-texapp-2016.