Tedde R. Blunck v. Cathy A. Blunck

Opinion

ACCEPTED 03-15-00128-CV 6708004 THIRD COURT OF APPEALS AUSTIN, TEXAS 8/28/2015 3:58:50 PM JEFFREY D. KYLE CLERK NO. 03-15-00128-CV

FILED IN 3rd COURT OF APPEALS IN THE COURT OF APPEALS AUSTIN, TEXAS 8/28/2015 3:58:50 PM FOR THE JEFFREY D. KYLE Clerk

THIRD COURT OF APPEALS DISTRICT

AT AUSTIN, TEXAS

Tedde R. Blunck Appellant

V.

Cathy A. Blunck Appellee

From the 22nd Judicial District Court of Hays County, Texas

APPELLEE'S BRIEF

LAW OFFICE OF KARL E. HAYS, PLLC 2101 South IH35, Suite 210 Austin, Texas 78741 512-476-1911 512-476-1904 facsimile service@haysfamilylaw.com

Karl E. Hays State Bar Number 09307050

Pursuant to fl-X. R. APR. P. 39.7, Appellee waives oral argument. IDENTITY OF PARTIES AND COUNSEL

In compliance with Rule 38.2(a)(1)(A) of the Texas Rules of Appellate

Procedure which provides that the list of all parties to the trial court's judgment and

the names and addresses of all counsel is not required to be included in an appellee's

briefunless such information is necessary to supplement or correct the appellant's list,

Appellee advises the Court that Appellant has correctly identified the parties and their

counsel in this matter. TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL i

TABLE OF CONTENTS ii

INDEX OF AUTHORITIES iii

REFERENCE TO THE RECORD ON APPEAL v

STATEMENT OF THE CASE vi

WAIVER OF ORAL ARGUMENT vii

APPELLEE'S RESPONSE TO ISSUES PRESENTED viii

SYNOPSIS OF THE ARGUMENT 2

STATEMENT OF FACTS 5

STANDARD OF REVIEW 7

ARGUMENT AND AUTHORITIES 8

PRAYER 16

CERTIFICATE OF COMPLIANCE 17

CERTIFICATE OF SERVICE 18

APPENDIX 19

11 INDEX OF AUTHORITIES

CASES

Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991) 7, 10

Burns v. Miller, Hiersche, Martens & Hayward, P.C. 948 S.W.2d 317, 324 (Tex. App. -Dallas 1997, writ denied) 7

Clayton v. Wisener, 169 S.W.3d 682, 683-84 (Tex. App. -Tyler 2005, no pet.) 10

Guerinot v. Wetherell, 2013 WL 2456741, at *4 (Tex. App. June 6, 2013) .... 9

Jones V. Am. Airlines, Inc., 131 S.W.3d 261, 266 (Tex. App. -Fort Worth 2004, no pet.) 7

Schultz V. Fifth Judicial Dist. Court ofAppeals at Dallas 810S.W.2d 738, 740 (Tcx. 1991) 9

Tanner v. McCarthy, 274S.W.3d311,322 (Tex. App. -Houston [1 st Dist.] 2008, no pet.) 7, 9, 15

Williams Farms Produce Sales, Inc. v. R iSc G Produce Co. 443 S.W.3d 250, 259 (Tex. App. -Corpus Christi 2014, no pet 12, 13

RULES

Texas Rules of Appellate Procedure 38.1(g) 5 Texas Rules of Appellate Procedure 38.2 1 Texas Rules of Fvidence 902 12

111 STATUTES

Section 31.002 of the Texas Civil Practice and Remedies Code 4, 8, 9 Section 31.002(a) of the Texas Civil Practice and Remedies Code 8, 10 Section 31.002(b) of the Texas Civil Practice and Remedies Code 8 Section 31.002(h) of the Texas Civil Practice and Remedies Code 3, 14

SECONDARY SOURCES

David Hittner, Texas Post-Judgment Turnover & Receivership Statutes^ 45 Tex. Bar J. 417,417-18 (1982) 10

Second Amended Order Regarding Mandatory Reports of Judicial Appointments and Fees, S. Ct. Misc. Docket No. 07-9188 (Oct. 30, 2007) 16

IV REFERENCE TO THE RECORD ON APPEAL

Citations to the clerk's record are designated herein by "CR" followed by the

applicable page nLimber(s) thereof.

Citations to the reporter's record are designated herein by "RR" followed by the

applicable volume, page and line number(s) thereof. Citations to exhibits included

in the reporter's record are designated herein by "RR" followed by the applicable

exhibit number.

Citations to the Appendix are designated herein by "AFP EX" followed by the

applicable exhibit number assigned within the text of this brief. STATEMENT OF THE CASE

Rule 38.2(a)(1)(B) of the Texas Rules of Appellate Procedure expressly

provides that an appellee's brief need not include a statement of the case "unless the

appellee is dissatisfied with that portion of the appellant's brief." Accordingly,

Appellee advises this Court that she is satisfied with Appellant's description of the

nature of the case, the course of the proceedings, and the trial court's disposition of

the case.

VI WAIVER OF ORAL ARGUMENT

Pursuant to Tex. R. App. P. 39.7, Appellee, Cathy A. Blunck, advises the

C0U1I: that she waives her right to argue this case to the Court.

vn APPELLEE'S RESPONSE TO ISSUES PRESENTED

The trial court did not abuse its discretion by entering an order for turnover relief, because there was sufficient evidence to support th^ District Court's order.

(In reply to Appellant's Issue No. I).

The trial court did not abuse its discretion by entering an order that did not identify the specific property that was subject to turnover.

(In reply to Appellant's Issue No. II).

The trial court did not abuse its discretion by establishing the rate at which the Receiver would be paid and by including a finding that the established rate was the customary and usual fee for a receiver.

(In reply to Appellant's Issue No. III).

vin NO. 03-15-00128-CV

IN THE COURT OF APPEALS

FOR THE

Pursuant to Rule 38.2 of the Texas Rules of Appellate Procedure, Cathy A.

Blunck, the Appellee in these proceedings, responds to the arguments presented to

this Court by Appellant, Tedde R. Blunck. For the reasons set forth below, Cathy A.

Blunck requests that this Court affirm the order of the trial court in all respects. SYNOPSIS OF ARGUMENT

The trial court did not abuse its discretion by granting Appellee's request for

turnover relief. As a judgment creditor, Appellant was entitled to receive aid from

the trial court in the form of a turnover order if Appellant established that Appellee

owns property that cannot readily be attached or levied on by ordinary legal process

and that is not exempt from attachment, execution or seizure for the satisfaction of

liabilities. At the hearing on Appellant's request for turnover relief, the trial court

took judicial notice of the Final Decree ofDivorce in this case, which reflects on its

face that Appellant was awarded assets in his divorce that cannot readily be attached

or levied on by ordinary legal process and which are not exempt from attachment,

execution or seizure. Even without any additional evidence, the trial court had

sufficient cause to grant the request for turnover relief.

Appellee also offered additional evidence in support of her request, which

clearly supports her entitlement to relief. In addition to the information contained

within the parties' Final Decree ofDivorce, Appellee presented the trial court with

a certified copy of "The Tedde R. Blunck Living Trust" which reflected that

Appellant was in possession ofcertain contract rights with respect to property that he

had transferred into the Trust. Appellee also presented copies of the official

schedules that Appellant submitted to the Bankruptcy Court in connection with his bankruptcy. Those schedules reflect Appellant's interest in certain accounts

receivable, bank accounts and other assets that had been awarded to him in his

divorce, as well as his interest in his law practice. The bankruptcy schedules, which

were signed by Appellant under penalty of perjury were self-authenticating and

established that Appellant was in possession assets such as the revenue from his law

practice and two accounts receivable valued at $59,500.00 that cannot readily be

attached or levied on by ordinary legal process. Consequently, the trial court had a

sufficient evidentiary basis upon which to grant the requested turnover relief.

The trial court also did not abuse its discretion by failing to identify in the

turnover order the specific property that was subject to the order. Appellant's

argument in that regard is based upon case law that has specifically been superseded

by statute. Section 31.002(h) ofthe Texas Civil Practice and Remedies Code, which

was adopted in 2008, specifically provides that a turnover order does not have to

identify the specific property that is subject to turnover.

Finally, the trial court did not abuse its discretion by establishing the rate at

which the Receiver will be compensated. Appellant is correct in his assertion that the

trial court cannot "pre-approve" the Receiver's right to compensation. Establishing

the rate to be charged by the Receiver, however, is not the same as awarding the

Receiver his fees. The Receiver will still need to submit a report to the Court and obtain the trial court's approval of any request for fees. At that time, Appellant will

be able to challenge the Receiver's request and assert any relevant arguments in

opposition to the Receiver's request.

The order signed by the trial court on 9 February 2015, is supported by

sufficient evidence, is in compliance with the express provisions of Section 31.002

of the Texas Civil Practice and Remedies Code, and is proper in all respects.

Accordingly, the order should be affirmed by this Court. STATEMENT OF FACTS

Rule 38.1 (g) of the Texas Rules of Appellate Procedure states,

The brief must state concisely and without argument the facts pertinent to the issues or points presented. In a civil case, the court will accept as true the facts stated unless another party contradicts them. The statement must be supported by record references.

Despite the plain language ofRule 38.1(g), Appellant chooses to interject both

argument and opinion in his recitation of the pertinent facts regarding this case.

Accordingly, Appellee respectfully urges this Court to disregard the extraneous and

irrelevant nature of the majority of Appellant's statement of facts and focus instead

only on those facts that are relevant to the disposition of this appeal.

Mindful of the fact that Rule 38.1 (g) provides that the Court will accept as true

the facts stated in an appellant's statement of facts unless those facts are controverted.

Appellee advises this Court that she generally denies Appellant's version ofthe facts.

Additionally, Appellee incorporates herein by reference her Statement of Facts

presented below, and any reference to the facts in her argument presented herein and

offers both in contravention of the relevant facts asserted by Appellant.

Appellee obtained a judgment against Appellant on 24 October 2012, which

Appellant has refused to pay. (CR 36-70)(The Final Decree of Divorce is not a

formal part of the record in this case, but is attached as an exhibit to Appellee's request for turnover relief). On 30 January 2015, Appellee filed a Motionfor Post-

Judgment Receivership Pursuant to Section 31.002, Civil Practice and Remedies

Code, seeking judicial assistance in collecting the outstanding judgment. (CR 33 -

35). On 9 February 2015, the trial court considered Appellee's request for turnover

relief. Although he had been provided with notice of the hearing, Appellant did not

attend. At the conclusion ofthe hearing the trial court granted Appellee's request for

turnover relief and appointed a receiver with the authority to take possession of

Appellant's non-exempt property. (CR 72 - 78). STANDARD OF REVIEW

Turnover orders are reviewed under an abuse of discretion standard.

Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991). Under the abuse

of discretion standard, legal and factual insufficiency challenges do not constitute

independent grounds for error, but are factors that the appellate court examines in

assessing whether the trial court abused its discretion. See Tanner v. McCarthy, 21A

S. W.3d 311,322 (Tex. App.-Houston [1stDist.] 2008, no pet.); Jonesv. Am. Airlines,

Inc., 131 S.W.3d261,266(Tex.App.-Fort Worth 2004, nopet.). Atrial court abuses

its discretion when it acts in an unreasonable or arbitrary manner, without reference

to any guiding rules and principles. Beaumont Bank, 806 S.W.2d at 226. An

appellate court should not reverse for an abuse of discretion ifthere is some evidence

of a substantive and probative character to support the trial court's decision. Tanner,

274S.W.3d at 321;Burnsv. Miller, Hiersche, Martens &Hayward, P.€., 948S.W.2d

317, 324 (Tex. App.-Dallas 1997, writ denied). Therefore, lack of evidence to

support a turnover order is a relevant consideration in determining whether a trial

court abused its discretion in granting the order. BeaumontBank, 806 S.W.2dat 226. ARGUMENT AND AUTHORITIES

The District Court did not abuse its discretion by entering an order for turnover relief, because there was sufficient evidence to support the District Court's order.

In his first issue, Appellant argues that there was no evidence to support the

trial court's order. A trial court's entry ofa turnover order is governed by Texas Civil

Practice and Remedies Code section 31.002. See, Tex. Civ. Prac. and Rem. Code

Ann. § 31.002(a) (Vernon 2015). Under that section, a judgment creditor is entitled

to receive aid from a court in order to reach property to obtain satisfaction on a

judgment "ifthe judgment debtor owns property... that: (1) cannot readily be attached

or levied on by ordinary legal process; and (2) is not exempt from attachment,

execution, or seizure for the satisfaction of liabilities." Id. Ifthe foregoing conditions

are met, the trial court may order the judgment debtor to turn over nonexempt

property to a designated sheriff or constable for execution, may otherwise apply the

property to the satisfaction of the judgment, or, as was the case in this instance, the

trial court may appoint a receiver with the authority to take possession of the

nonexempt property, to sell it, and to pay the proceeds to the judgment creditor as

required to satisfy the judgment. Id. § 31.002(b) (Vernon 2015). As specifically noted by the Court of Appeals in Tanner v. McCarthy, 274

5.W.3d 311, 322 (Tex. App. -Houston [1st Dist.] 2008, no pet).

Section 31.002 does not specify, or restrict, the manner in which evidence may be received in order for a t r i a l court to determine whether the conditions of section 31.002(a) exist, nor does it require that such evidence be in any particular form, that it be at any particular level of specificity, or that i t reach any particular quantum before the court may grant aid under section 31.002.

In fact. Section 31.002 does not even require that the trial court conduct an

evidentiary hearing prior to granting relief under the statute. Tanner, 274 S.W.3 at

322,fn.21.

Even though Section 31.002 does not specify the manner in which evidence

may be received by the trial court, or state the fonn, level of specificity or quantum

of evidence required to justify the issuance of a turnover order, a trial court is

required to have some evidence before it that establishes the existence of the

necessary conditions before the trial court can properly enter an order granting relief

under that section. Guerinot v. Wetherell, 2013 WL 2456741, at *4 (Tex. App. June

6, 2013), citing. Tanner, 274 S.W.3d at 322; Schultz v. Fifth Judicial Dist. Court of

Appeals at Dallas, 810 S.W.2d 738, 740 (Tex.l991)(holding that turnover statute

requires factual showing that judgment debtor has nonexempt property that is not readily subject to ordinary execution); Clayton v. Wisener, 169 S.W.3d 682, 683-84

(Tex. App.-Tyler 2005, no pet.) (holding that trial court abused its discretion in

entering turnover order without any evidence of facts required by Section 31.002(a)

and based only on motion and argument of judgment creditor's counsel); accord

Beaumont Bank, 806 S.W.2d at 226 (holding that lack ofevidence to support turnover

order is relevant consideration in determining whether trial court abused its discretion

in entering order).

The basis of Appellant's first argument is the assertion that Appellee failed to

present competent evidence to support her request for turnover relief. That assertion

is simply incorrect.

The stated purpose of the turnover statute is to permit a judgment creditor to

reach intangible assets such as contract rights, accounts receivable, negotiable

instruments and corporate stocks, in addition to other assets that cannot readily be

attached or levied on by ordinary legal process. David Hittner, Texas Post-Judgment

Turnover & Receivership Statutes, 45 Tex. Bar J. 417, 417-18 (1982)(citing House

and Senate committee reports). At the hearing on Appellee's request for relief, the

trial court took judicial notice of the file and, specifically of the Final Decree of

Divorce signed by the trial court on 24 October 2012. (RR Vol. II11. 14-17). The

Final Decree ofDivorce reflects that Appellant was awarded, among other property,

10 an interest in two timeshares, seven separate bank accounts, life insurance policies

insuring Appellant's life as well as a life insurance policy insuring the life of a third

party, travel and hotel award benefits, timber and mineral interests, loan proceeds

from various loans, and a note receivable. (CR 41-45)(Applicable pages attached as

EX. 1 in the Appendix). All ofthese items constitute property that cannot readily be

attached or levied on by ordinary legal process.

Appellant does not join issue with the fact that the trial court had sufficient

evidence to support a request for turnover relief by virtue of having taken judicial

notice of the file. Instead, Appellant's argument in support of his first issue centers

around a challenge to the authenticity ofthe additional evidence that Appellee offered

to the Court in support of her request. Contrary to Appellant's assertion, the trust

document that Appellee offered into evidence at the hearing on her request for

turnover relief (Movant's Ex. 1) was a certified copy of"The Tedde R. Blunck Living

Trust" and therefore was self-authenticating under Rule 902( 1)(A) ofthe Texas Rules

of Evidence. The fact that the document was a certified copy is clearly evident from

the record. For the Court's benefit, a copy ofthe last page ofthe document, reflecting

the certification ofthe Camp County Clerk is included as APP EX. 2 in the Appendix

to this Brief.

11 The import of the trust agreement is that it reflects on its face that Appellant

has certain valuable contract rights regarding property that Appellant had transferred

into his living trust. Those contract rights constitute assets that cannot readily be

With respect to the second exhibit that Appellee offered in support of her

request for turnover relief, that document also was self-authenticating under Rule 902

ofthe Texas Rules ofEvidence. Movant's Ex. 2 was copies ofthe required schedules

that Appellant had filed in connection with his bankruptcy, and which reflected,

among other things, Appellant's interest in certain accounts receivable, bank

accounts, and his law practice - all ofwhich are assets that cannot readily be attached

or levied on by ordinary legal process. Aside from the fact that the bankruptcy

schedules rellect that they were signed by Appellant under penalty of perjury, (which

should call into question the sincerity of his challenge as to the authenticity of the

exhibit), each page of Movant's Ex. 2 bears the electronic file stamp from the

Bankruptcy Court. In addressing a similar challenge to a docket sheet printed from

the uscourts.org website, the Corpus Christi Court of Appeals in Williams Farms

Produce Sales, Inc. v. R&G Produce Co., 443 S.W.Sd 250,259 (Tex. App. - Corpus

Christi 2014, no pet.) concluded.

12 Relying on federal case law and the plain language of the statute, we hold that documents printed from government websites are self-authenticating under Texas Rule of Evidence 902(5) .

The Court further explained,

In addition, under Texas law, evidence may be authenticated by its [a] ppearance, contents, substance, internal patterns, or other distinctive characteristics, taken in conjunction with circumstances" that support a finding that a document is what its proponent claims. Tex.R. Evid. 901(b) (4) . While we hold that the documents printed from government websites are self-authenticating under Rule 902(5), we also acknowledge that, because they indicate they originated from government websites, they could also have been internally authenticated under Rule 901(b)(4). See id.; Tienda v. State, 358 S.W.3d 633, 647 (Tex. Crim. App.2012) (holding that printouts from MySpace webpages were admissible because there was sufficient evidence on them indicating that they ''were what they purported to be - MySpace pages the contents of which the appellant was responsible for"); see also U.S. E.E.O.C. v. E.I. DuPont de Nemours & Co.^ CIV. A. 03-1605, 2004 WL 2347559, at *2 (E.D.La. Oct. 18, 2004) (finding that, in addition to being admissible under Federa]. Rule of F,vidence 902 (5) , an exhibit printed from a government website was also admissible under the Rule 901 because i t contained the i n t e r n e t domain address from the website and the date on which i t was printed).

443 S.W.Sd at 259, fn. 7.

13 In light of the foregoing, it is clear that the trial court did not abuse its

discretion by granting Appellee's request for turnover relief. The trial court clearly

had sufficient evidence upon which to base an order granting turnover relief

The District Court did not abuse its discretion by entering an order that did not identify the specific property that was subject to turnover.

In his second issue, Appellant makes the argument that the trial court's order

is invalid because it "fails to state specifically what non-exempt property in the

possession of Judgment Debtor is to be turned overor when it is to be turned over."

(Appellant's Briefat p. 20). Insupport of hisargument. Appellant citesthree separate

appellate opinions,' each of which predate the adoption of §31.002(h) of the Texas

Civil Practice and Remedies Code. Section 31.002(h) specifically provides,

(h) A court may enter or enforce an order under this section that requires the turnover of non- exempt property without identifying in the order the specific property subject to turnover.

' Schultz V. Fifth Judicial Dist. Ct. ofApp. at Dallas, 810 S.W.2d 738, 740 (Tex. 1991); Mayer v. Mayer, 183 S.W.3cl 48,54 (Tex. App. -Austin 2005); Bergman v. Bergman, 828 S.W.2d 555. 557( Tex. App. -HI Paso. 1992. nowrit). The fourth case cited byAppellant isan order From an United States Magistrate Judge whieh, aside from having noprecedential value, is simply wrong. A review of the order, which is included in the Appendix as APP EX. 3, reflects that it is based upon case law that predates the 2008 addition of § 31.002(h) to the Civil Practice and Remedies Code.

14 As stated by the Court of Appeals in Tanner v. McCarthy, 274 S.W.3d 311

(Tex. App. -Houston [1st Dist] 2008, no pet),

Indeed, section 31.002 does not require that a judgment creditor seeking a turnover order identify all, or even any, of the judgment debtor's assets that are to be the subject of the turnover order, nor does the statute require the trial court to identify the specific property subject to turnover in its turnover order. See id. §31.002(h).

Appellant's argument that the trial court's order had to identify the specific

property that was subject to turnover is based on a line of cases that has been

specifically superseded by statute and is simply wrong.

The District Court did not abuse its discretion by establishing the rate at which the Receiver would be paid and by including a finding that the established rate was the customary and usual fee for a receiver.

(In reply to Appellant's Issue No. 111).

In its order, the trial court specifically established the rate at which the

Receiver would be paid. Additionally, the trial court made a finding that the rate

established by the trial court is the customary and usual fee for a receiver. Appellant

misconstrues the trial court's order and argues, essentially, that the trial court has

prematurely ruled upon the validity of the Receiver's fees. That is simply not the

case. In order to be paid, the Receiver will need to submit a separate request for

15 payment and obtain approval from the trial court. See, Second Amended Order

Regarding Mandatory Reports of Judicial Appointments and Fees, S. Ct Misc.

Docket No. 07-9188 (Oct. .30, 2007). (APP EX. 4). The trial court's order makes no

attempt to usurp the requirements established by the Texas Supreme Court. Any

argument that Appellant may have regarding the reasonableness of charges can be

asserted by Appellant at the time the Receiver files a motion requesting payment and

would properly be addressed at that time. Appellant can cite this Court to no

authority which provides that it is improper for a trial court to establish the rate at

which a receiver is to be compensated and to include that rate in its turnover order.

The trial court's finding that the rate established by the trial court is the customary and

usual rate for a receiver is not a determination before the fact of the reasonableness

of the Receiver's fees. Accordingly, there was nothing improper about putting the

Receiver's rate in the turnover order or the trial court's finding in that regard.

PRAYER

For the reasons stated in this brief, Cathy A. Blunck respectfully asks this

Court to overrule the issues presented by Tedde R. Blunck and affirm the trial court's

order in all respects.

16 Respectfully submitted,

LAW OFFICE OF KARL E. HAYS, PLLC 2101 South IH-35, Suite 210 Austin, Texas 78741 512-476-1911 512-476-1904 facsimile service@.havsfamilylaw.com

By: /s/ Karl E. Hays Karl E. Hays State Bar Number 09307050

ATTORNEY FOR APPELLEE

CERTIFICATE OF COMPLIANCE

I Certify that this document was produced on a computer using WordPerfect and contains 4402 words, as determined by the computer software's word-count function, excluding the sections of the document listed in Texas Rules of Appellate Procedure 9.4(1)(1).

/s/ Karl E. Havs Karl E. Hays

17 CERTIFICATE OF SERVICE

In compliance with Rule 9.5(a), 9.5(d) and 9.5(e) of the Texas Rules of Appellate Procedure, the undersigned attorney certifies that a true and correct copy ofthe foregoing Appellee's Briefhas been served upon the below-named individual, in the manner noted below, as prescribed by Rule 9.5(b) of the Texas Rules of Appellate Procedure on this 28th day of August 2015.

/s/ Karl E. Hays Karl E. Hays

Via E-File Transmission Tedde R. Blunck 502 Quitman Street P.O. Box 1152 Pittsburg, Texas 75686 tblunck@yahoo.com

18 APPENDIX TO APPELLEE'S BRIEF

1. Pages 7-10 (Vol. 584, pg 0663 - 0666) from Final Decree ofDivorce, Cause No. \\-\l\l, In the Matter ofthe Marriage ofTedde R. Blunck and Cathy A, Blunck, in the 22nd District Court of Hays County, Texas.

2. Last page of certified copy of "The Tedde R. Blunck Living Trust" reflecting the certi fication of the Camp County Clerk.

3. Findings, Conclusions, and Recommendation ofthe United States Magistrate Judge, No. 3:13-cv-4311 -D, Shanze Enterprises, Inc., v. Amigo MGA, LLC, In the United States District Court, Northern District of Texas, Dallas Division

4. Second Amended Order Regarding Mandatory Reports of Judicial Appointments and Fees, S. Ct Misc. Docket No. 07-9188 (Oct. 30, 2007)

19 EXHIBIT 1 Oct. 24. 2012 9: 22AM Barrett &Coble No. 0865 P. 9

Declaration upon and subject to all of the terms, restrictions, covenantSi conditions, provision inthe Declaration andanyamendments thereto, i

b. A 2% undivided interest as tenant-in-common in and to Unit 057 (the "Unit"), Hill Countty Resort, Phase 3, a vacation resort in Comal County, Texas, according to the Second Amended and Restated Declaration of Restrictions, Covenants and conditions recorded under File No. 20000 6037046 and Si^plemental Declaration recorded under FileNo. N/A Real Property Records ofComal County, Texas, (collectively the '^Declaration"), and as shown and described in the Plat of)^1 Country Resort recorded in Volume 8, Page 345 of the Plat Records, Comal County, Texas, together vrith the exclusive right to occupy the Unit during Use Period No. 17, beginning APR1L26,2008, as said Use Period is definedin the Declaration upon and subject to all of the terms, restrictions, covenants, conditions, provision in theDeclaration and any amendments thereto.

4. The real property and improvements located at 502 Qultman Street, Pittsburg, Camp County, Texas, 75686 including but not limited tp any escrow timds, easements, homeowners association ri^ts, p^aid insurance, utility deposits, keys, house plans, home security access and code, keys and garage door opener, warranties and service contracts, and title and closing documents related to the property, which is .more particularly described as:

.52 acre Nancy Glass Survey, Abstract No. 073. A-43 (aka Lot 08, E Pt. City Block 48 perCCAD), City ofPittsburg, Camp County, Texas

Being a lot, tract, or parcel of land situated in the Nancy Glass Survey, Abstract No. 073, Camp County, Texas, and being all ofthat certain tract of cry land conveyed from Zeliah Heath etvir to Dr. Manuel Guerra, by Warranty «X) deed, as recorded in Volume 141, page 342, Deed Records, Camp County, ^ Texas, and being more particularly described by metes and boun^ as 2 a. follows: ; BEGINNING at a 60d nail set in asphalt at the Northeast comer of the ® remainder of a called 0.623 acre tract conveyed to Carolyn Rape, by —I C3 Warranty Deed, as recorded in Volume 041, page 106, Real Property Records, Camp County, Texas, said point being in the South line of State Highway No. 11 (aJc.a. Quitman Street), from said point, a Vz inch iron rod found, bears North 69 Degrees 03 Minutes 27 Seconds West, a distaime of IMMO'Blundt Find Decree ofD'tvorce Fagfil

0.00181 Page 42 of 207 34 000042 Oct. 24. 2012 9:22AM Barrett &Coble No. 0865 i P. 10

64.00 feet;

THENCE South 69 Degrees 03 Minutes 27 Seconds East, with the;South line of said State HighwayNo. 11, a distance of 60.38 feet to a 14 inch iron rod set with a yellow plastic cap stamped (CBG INC) at the NorAwest comer of a tract of land once conveyed to Mollie Thomison by Warranty Deed as recorded in Volume 051, page 165, Deed Records, Camp County, Texas, &om said point, a '/S inch iron pipe found, bears North 12Degrees 53 Minutes 11 SecondsWest, a distance of 0.98 feet;

THENCE South 12 Degrees 53 Mmutes 11 Seconds West, with the; West line of said Tbomison tract, and passing the Southwest comer of said Thomison tract, and a Northwest comer of the remainder of a called; 1-1/4 acre tract conveyed to Camp County-City of Pittsbuig, Texas, by Warranty Deed, as recorded in Volume 122, page 483, DeedRecords, Camp County, Texas, and continuing on for a total distance of283.36 feet to a 14 inch iron rod set with a yellow plastic stamped (CBG INC) at the Eastern most Northeast comer of a called 0.253 acre tract conveyed to the East Texas Medical Center Regional Healthcare System, by Warranty Dec^, as recorded in Volume 179, page 128, Officid Public Records, Camp County, Texas, from said point, a 14 inch iron rod found with a red plastic cap stamped (S&A), bears South 10 Degrees 49 Minutes 21 Seconds West, a distance of 73M feet;

THENCE North 71 Degrees 36 Mmutes 01 Seconds West, with a North line of said 0.253 acre tract, a distance of 100.00 feet to a 14 inch iron rod set with a yellow plastic cap stamped (CBG INC) at an ell comer of said 0.253 acre tract; kO ^ THENCE North 20 Degrees 54 Minutes 16 Seconds East, (Reference ^ Bearing), with the an East line of said 0.253 acre tract, and passing at a £ distance of 11,29 feet, a 14 inch iron rod found with a red plastip cap ^ stamped (S&A) at the Northern most Northeast comer of said 0.253 acre tract, and the Southeast ccmier of theremainder of said0.623 acre tract, and in continuing on for a total distance of 285.00 feet to the POINT OF BEGINNING and CONTAINING 22,707 square feet or 0.52 acres of land, more or less. !

5. All household furniture, furnishings, fixtures, goods, art objects, collectibles, appliances, and equipment in the possession ofTedde R. Blundk orsubject 1

/MMO Blunek Final Decree ofPivcree Page 8

000182 Page 43 of 207 35 000043 Oct. 24. 2012 9:22AM Barreit &Coble No. 0865 . F. j]

I

tohis sole control exc€])t as specifically listed below.

The funds on deposit, together with accrued but unpaid interest, in the following banks, savings institutions, or other financial institutions:

a. Wells Fargo checking account number ending in **1488; ! b. Wells Fargo checking account number ending in **0348; 0. Wells Faigo checking account number ending in **9173; d. WellsFargo checking account number ending in **4223; e. WellsFargo checking account number endingin **1927; and ; f. WellsFargo checking account number endingin **0879. g. The remaining balance in Wells Fargo savings account number ending in xxxx2983 after$40,291.00 ispaidto Cathy A. Blunck.

7. FORTY-FIVE PERCENT (45%) ofTedde R. Blimck's benefits in P^ons Brinckerfaoff Inc. Exec Def Comp Plan (DCOMP I), c/o T. Rowe Price, arising out of Tedde R. Blunck's employment with Parsons Brindcerhoff, Inc. to be paid as set out below.

8. FORTY-FIVE PERCENT (45%) of Tedde R Blunck's benefits in Parsons Brinckcrhoff Inc. Exec Def Comp Plan (DCOMP II), c/o T. Rowe Price, arising out of Tedde R. Blunck's employment with Parsons BrinckerhofF, Inc. to be paid as s6t out below.

9. All policies of life insurance (including cash values) insuring Tedde R. Blunck's life.

10. The MIL Insurance Company life insurance policy insuring S. J. Hawkinson.

11- The 2008 Ford F150 motor vehicle, vehicle identification number 1FTPW14V88FB48320, together with allprepaid insurance, keys, and title documents. o CO ex.. 12. The 2012 Ford Escape motor vehicle, vehicle identification number -a- 1FMCUCEG7CKA65259, together with all prepaid insurance, keys, and title documents. 00

^ 13. The 1976 Bethany Citation Travel Trailer motor vehicle, veshicle CO identification number BFl111CFB464015, togedier withellprepaid insurance, keys, and title documents.

IMMOBlmek final Dtcrtt ofPivcrce Page 9

000183 Page 44 of 207 33 000044 0(t. 24. 20] 2 9:22AM Barrcit i Coble No. 0865 P 12

1|4. The following travel and hotel award benefits: t

a. Marriott account number ending in **S894; b. 50% ofGold Delta Sky Miles account number ending **1008; c. Southwest Airlines benefitsheld in Husband's name; d. American Airlines benefits held in Husband's name; and e. WelJs Fargo account number ending in*•1165.

15. The contents ofthe storage unit located in Pittsburgh, Texas. 16. An undivided one half (14) interest in timber and mineral interests on the property located at ABS A060 Mary Hayes, Tract, 41-5000, 406.93 (:+-1.55 AC in Rd.) acres, and morecommonly Imown as 1347 CR 4510 Pittsburg, Texas. ; t

17. Theoutstanding loanproceeds fit)m Kelle Hawkinson. t

18. Theoutstanding loanproceeds firom Michelle Jolie.

19. The outstanding loan proceeds fiom Beau Shafer.

20. The proceeds from the Note receivable from Richard and Vanessa Antpinc.

21. The hunting trophies and prints save and except forthetrophies awarded to CathyA. Blunckand Ordered delivered to Riduvd Antoine herein.

22. Contents ofthe gun safe and hunting gear in his possession.

Property to Cathv A. Blunck

^ IT IS ORDERED AND DECREED that Cathy A. Blunck is awarded the VD o following as her sole and separate property, and Tedde R. Blunck is divested of all right. CD a_

^ title, interest, and claim in and to that property: CO

1. All household furniture, furnishings, fixtures, goods, art objects, ^ collectibles, appliances, and equipment inthe possession of thewife or subject to hersole control.

/Mh40Blimek FiruU Deerte ofD,tvorce Page 10

000184 Page 45 of 207 37 000045 EXHIBIT 2 334 PAGE

"3^ Q)

THE STATE OF TEXAS ^ EtAtNE YOUNG, COUNTT CLERK , CAMP COUNTY, TEXAS COUNTY OF CAMP /

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

SHANZE ENTERPRISES, INC., § § Plaintiff, § § V. § No. 3:13-cv-4311-D § AMIGO MGA, LLC, § § Defendant. §

FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

PlaintiffShanze Enterprises, LLC ("Shanze") filed on July 15,2014 a Motion For

Turnover Order requesting the Court enter an order requiring Defendant AmigoMGA,

LLC ("Amigo") to turn over to Plaintiff "all present and future rights to non-exempt

property that cannot readily be attached or levied on by ordinary legal process,

including accounts receivable, intangibles, causes of action, stocks, partnership, and

equity interests, and all other property that is properly subject to a turnover order."

Dkt. No. 14. Chief Judge Sidney A. Fitzwater referred the motion to the undersigned

magistrate judge for hearing, if necessary, and recommendation or determination. See

Dkt. No. 21. Amigo has not filed a response.

For the reasons explained below, Shanze's Motion for Turnover Order should be

denied without prejudice.

Background

On October 25, 2013, Shanze filed this breach of contract action under the

1-

AUTMENTrLVTE:) Ob CiUX INrORMAT(ON 1 Case 3:13-cv-04311-D Document 25 Filed 09/23/14 Page 2 of 5 PagelD 72

Court's diversity jurisdiction. After Amigo failed to answer or otherwise respond to the

complaint, Shanze sought a default judgment. The Court granted Shanze's motion for

judgment and ordered that Shanze recover judgment in the principal amount of

$455,924.70 plus prejudgment and postjudgment interest. See Dkt. No. 12.

Shanze now seeks a turnover order pursuant to Federal Rule of Civil Procedure

64 and Texas Civil Practice & Remedies Code § 31.002. See Dkt. No. 14.

Legal Standards

The Texas Turnover Statute, Texas Civil Practice & Remedies Code § 31.002, is

a procedural device by which judgment creditors may reach assets of a debtor that are

otherwise difficult to attach or levy. See Af-Cap, Inc. v. Republic of Congo, 462 F.3d

417, 426 (5th Cir. 2006) (citing Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 224

(Tex. 1991)). The turnover statute itself does not require notice and a hearing prior to

issuance of a turnover order. See Ex parle Johnson, 654 S.W.2d 415, 418 (Tex. 1983).

Nevertheless, the trial court "must have some evidence before it that establishes that

the necessary conditions for the application of 31.002 exist." Tanner v. McCarthy, 274

S.W.3d 311, 322 (Tex. App.-Houston [1st Dist.] 2008, no pet.). The creditor must show

the trial court that: "(1) the debtor owns the property, (2) the property cannot be

readily attached, and (3) the property is not exempt." Stephenson v. LeBoeuf, No.

14-2-130-cv, 2003 WL22097781, at *2 (Tex. App.-Houston [14thDist.] Sept. 11, 2003,

no pet.).

For a judgment creditor to prove the required elements, the creditor must

"introduce more evidence than just a motion for turnover. The statute requires a

-2- Case 3:13-cv-04311-D Document 25 Filed 09/23/14 Page 3 of 5 PagelD 73

factual showing that the judgment debtor has non-exempt property that is not readily

subject to ordinary execution." Id. (citing SduUlz i'. Fifth Judicial Dist. Court of

Appeals at Dallas, 810S.W.2d 738, 740 (Tex. 1991)). "A turnover order must be specific

in both identifying the non-exempt property that is susceptible to turnover relief and

in tailoring the turnover relief to that property." Moyer v. Moyer, 183 S.W.3d 48, 54

(Tex. App. - Austin 2005, no pet.); see also Roebuck v. Horn, 74 S.W.3d 160, 163 (Tex.

App. - Beaumont 2002, no pet.) ("A reference to broad categories of assets does not

constitute a reference to specific assets that is required in a turnover order."); Finotti

V. Old Harbor Co., No. 5-97-1365-cv, 1999 WL 1034607, at *1 (Tex. App. —Dallas Nov.

16, 1999, no pet.) C'[T]he trial court's order must be definite, clear, and concise in its

description of the property to be turned over eliminating the need for interpretations,

inferences or conclusions.").

The Court therefore may not properly enter a turnover order if there is not at

least some probative evidence of the necessary facts supporting the trial court's

discretion. See Williams Farms Produce Sales, Inc. v. R&G Produce Co., No. 13-12-

00365-CV, 2014 WL 1266118, at *4 (Tex. App. - Corpus Christi 2014, no pet.).

Analysis

Shanze has failed to establish that it is entitled to the turnover relief that it

requests. Shanze's motion states only;

As allowed by Federal Rule of Civil Procedure 64 and Section 31.002 of the Texas Civil Practice & Remedies Code, Plaintiff and judgment creditor Shanze Enterprises Inc. ("Shanze") seeks an order requiring Defendant Amigo MGA, LLC to turn over to Plaintiff all present and future rights to non-exempt property that cannot readily be attached or Case 3:13-cv-04311-D Document 25 Filed 09/23/14 Page 4 of 5 PagelD 74

levied on by ordinary legal process, including accounts receivable, intangibles, causes of action, stocks, partnership, and equity interests, and all other property that is properly subject to a turnover order.

Dkt. No. 14.

Shanze has the burden to - but does not - identify any specific non-exempt

property or provide any evidence to establish that any specific non-exempt property is

susceptible to turnover relief. Shanze has failed to establish that: (1) Amigoowns the

property, (2) the property cannot be readily attached, and (3) the property is not

exempt. Shanze's motion only identifies "broad categories of assets," rather than

specific assets as required for a turnover order. Roebuck, 74 S.W.Bd at 163.

Therefore the record at this point does not allow for the Court to enter a

turnover order that is "definite, clear, and concise in its description of the property to

be turned over eliminating the need for interpretations, inferences or conclusions."

Finotti, 1999 WL 1034607, at *1. As such, Shanze's Motion For Turnover Order should

be denied without prejudice.

Recommendation

Shanze's Motion For Turnover Order [Dkt. No. 14] should be denied without

prejudice.

A copy of these findi ngs, conclusions, and recommendation shall be served on all

parties in the manner provided by law. Any party who objects to any part of these

findings, conclusions, and recommendation must file specific written objections within 14days after being served with a copy. See28 U.S.C. § 636(b)(1); FED. R. CiV. P. 72(b).

In order to be specific, an objection must identify the specific finding or

-4- Case 3:13-cv-04311-D Document 25 Filed 09/23/14 Page 5 of 5 PagelD 75

recommendation to which objection is made, state the basis for the objection, and

specify the place in the magistrate judge's findings, conclusions, and recommendation

where the disputed determination is found. An objection that merely incorporates by

reference or refers to the briefing before the magistrate judge is not specific. Failure

to file specific written objections will bar the aggrieved party from appealing the

factual findings and legal conclusions of the magistrate judge that are accepted or

adopted by the district court, except upon grounds of plain error. See Douglass v.

United Servs. Auto. Ass'n, 79 F.Sd 1415, 1417 (5th Cir. 1996).

DATED: September 23, 2014

DAVID L. HORAN UNITED STATES MAGISTRATE JUDGE

-5- EXHI®IT4 IN THE SUPREME COURT OF TEXAS

Misc. Docket No. 07- 9188

SECOND AMENDED ORDER REGARDING MANDATORY REPORTS OF JUDICIAL APPOINTMENTS AND FEES

ORDERED;

Section 1. Every appointment made ina civil ca.se, probate case, or proceeding govemed by

Titles I, 2, or 4 of the Family Code, by a regular or assigned judge of any district court,

constitutional county court, statutory county court, statutory probate court, court master or court

referee of a person to a position for which any type of fee may be paid shall be made by written

order.

Section 2. Every application or request for the payment of a fee by such anappointee shall

be approved by the court ofthe judge making the appointment. This approval shall be accomplished

by a separate uTitten order.

Section 3. Orders regarding appointments made and fees paid may notbesealed orotherwise

withheld from public disclosure for anyreason, regardless of whether anyotherinformation in tlie

case is protected from disclosure. Section 4. This order does not apply to appointments where compensation is solely by

government salary rather than by fee. or where the right to select the person appointed is reserved

by law to a party, as with independent executors and executrixes, or to appointments of private

processservers pursuant to Tex. R. Civ. P. 103. TTiis order does not apply to criminal cases and to

proceedings governed by Title 3 of the Family Code(Delinquent Children and Children in Need of

Supervision).

Section 5. At the end of each month, eachdistrict and countyclerkshall prepare a report to

include each feeapproved duringthat month for payment intheamount of $500 or more. The report

shall indicate;

(1) the nameof each personappointed by thejudge of each district court, countycourt,

statutory county court, and statutory probate court in the county to a position for

which a fee of$500 or more has been approved during the month to bepaid from any

source;

(2) the name of the judge approving the payment of the fees;

(3) thecase number and style of the case in which the fee was approved to be paid;

(4) the date of the order approving the payment of the fee;

(5) the position to which the person was appointed; and

(6) whether theappointee isanattorney, a private professional guardian, associated with

a public guardianship program, or a friend or familv member of the ward or the

deceased: and

(7) the amount of the fee approved for payment, and the source of such payment.

Misc. Docket No. 07- 9i 8S Pagg 2of4 Section 6. The clerk shall make a copy of this report available for public inspection in the

clerk's olTice, and shall, before the twentieth day of the month following the month reported,

transmit a copyof the reportto the Supreme Courtthrough the StateOfficeof Court Administration

in Austin.

Section 7. The clerk .shall retain each report for at least two years following the date it is

made available for public inspection.

Section 8. The clerk may charge the normal reasonable fee charged by the clerk for similar

reproductions for reproducing the report for a person requesting a copy of a report.

Section9. The orders signed pursuant to Sections 1and 2 above shall be sufficientlyspecific

to enable the clerk to prepare the report required by Section 5 above.

Section 10. This order is effective immediately, and applies to all fees of $500 or more

approved for paymenton or after September-1; 1994 November 1. 2007 and required to be reported

before the twentieth day of the following montli.

Section 11. A copy of this order shall be transmitted by the Clerk of the Supreme Court to

each district and county-level judge and to each district and county clerk.

Section 12. This order amends and supersedes Miscellaneous Order No. 94''9014 94-9143

(Januai v 18 September 21. 1994) of this Court.

In Chambers, this day of October, 2007.

Misc. Docket No. 07- 9188 Page 3of4 Wallace B. Jefferson, Chief

NatnM L. Hecht, Justice

Han [et O'Neill, Justice

Dale wainwright. Justice

JnstefrJustice

David M. Medina, Justice

Paul W. Green, Justice

Phil Johnson, Ju

UJdLljLdh Don R. Willelt, Ju.stice

Misc. Docket No. 07- 9188 Page 4 of 4