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In re Spiritas

Court of Appeals of Texas, Fifth District, Dallas

April 6, 2017

IN RE STEVEN SPIRITAS, INDIVIDUALLY AND AS TRUSTEE OF THE SPIRITAS SF 1999 TRUST, Relator

         Original Proceeding from the 101st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-13-08236

          Before Justices Francis, Evans, and Stoddart

          MEMORANDUM OPINION

          CRAIG STODDART, JUSTICE

         The underlying case is a dispute between two equal owners of a Texas limited liability partnership, Spiritas Ranch Enterprises, LLP (SRE), relator Steven Spiritas and real party in interest Susan Davidoff.[1] SRE owns over 700 acres of undeveloped land in Denton County. Spiritas and Davidoff disagree on the future of SRE. Spiritas wants to continue the business of the partnership, but Davidoff wants to sell the land and other partnership assets. In this original proceeding, Spiritas seeks relief from the trial court's order appointing a representative to wind up the partnership and sell partnership property, and the order denying Spiritas's motion to sever the winding-up order to allow for an immediate appeal. We conditionally grant relief in part.

          Procedural History

         In July 2013, Spiritas and Davidoff filed competing lawsuits that were ultimately consolidated into the underlying proceeding. Spiritas initially asserted claims against Davidoff for breach of contract, breach of fiduciary duty, and declaratory judgment related to an alleged debt and validity of a lease. Davidoff, in turn, filed suit against Spiritas, asserting claims for breach of fiduciary duty and seeking a declaratory judgment that SRE be wound up. Spiritas later amended his petition to include a declaratory judgment action seeking a declaration that Davidoff's request to wind up SRE constituted an event of withdrawal from the partnership. The parties filed competing motions for summary judgment. Davidoff also filed a motion asking the court to grant her authority to sell the partnership property or, in the alternative, to appoint a receiver to sell the property. In January 2014, the trial court appointed a receiver and denied Davidoff's motion for summary judgment as moot based upon that appointment. The trial court did not hear Spiritas's motions for summary judgment.

         A. The First Appeal

         Spiritas appealed the interlocutory order appointing the receiver. Spiritas v. Davidoff, 459 S.W.3d 224 (Tex. App.-Dallas 2015, no pet.). In that appeal, Spiritas raised two issues: (1) whether the trial court abused its discretion by appointing a receiver, and (2) whether the trial court abused its discretion by concluding that an event requiring a winding up of SRE had occurred and liquidation of its assets was required. Id. at 225-26. The panel concluded that the appointment of a receiver was not supported by the record presented and reversed the trial court's order. Id. at 234-37. The panel held that sections 11.054, 101.551, and 152.702(a)(3) of the Texas Business Organizations Code do not authorize or provide for the appointment of a receiver. Id. at 235. The panel did not reach issue two - whether an event requiring a winding up of SRE had occurred. Id. at 237.

          B. Proceedings on Remand

         On remand, both parties amended their pleadings, and the trial court heard the previously-filed motions for summary judgment, which resulted in two partial summary judgment orders, the February 16, 2016 orders. The first order denied Spiritas's motion for partial summary judgment on Davidoff's breach of contract and tort-based counterclaims. The second denied Spiritas's motion for partial summary judgment on the issue of whether SRE should be wound up, granted Davidoff's competing motion for summary judgment on the same issue, and declared that an event requiring a winding up of SRE had occurred. Those orders did not dispose of all claims and all parties. Davidoff's breach of contract and tort-based counterclaims against Spiritas as well as Spiritas's other claims against Davidoff and her husband remain pending.

         After the trial court granted Davidoff partial summary judgment and determined that an event requiring a winding up had occurred, Davidoff filed an "application" to have the court appoint a representative to wind up SRE and sell its real property. On May 12, 2016, the trial court signed an order granting Davidoff's application for a court-supervised winding up of SRE. In that order, the trial court appointed George "Kevin" Buchanan as the "Winding Up Representative" and authorized Buchanan to commence the winding up of SRE within thirty days and to take all steps necessary to complete the winding up process, including the sale of SRE's property. Spiritas sought severance so that he could promptly appeal the winding-up order. The trial court denied the motion for severance.

         C. Relief Requested Here

         Spiritas contends the May 12, 2016 winding-up order constitutes an order permitting execution of a non-final order. If the winding-up order stands, Spiritas argues that any future appeal of the order would be insufficient to protect his rights and property interests because the partnership will have been wound up and the property sold by the time the trial court renders a final, appealable judgment. Spiritas asks the Court to grant the petition for writ of mandamus and direct the trial court to vacate its May 12, 2016 winding-up order. Alternatively, Spiritas asks the Court to direct the trial court to either (1) sever the unadjudicated claims and counterclaims from the winding-up orders so those orders can become final and appealable, or (2) vacate the February 16, 2016 order that declared that an event requiring a winding up of SRE had occurred.

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