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Heckert v. Heckert

Court of Appeals of Texas, Second District, Fort Worth

November 9, 2017



          PANEL: SUDDERTH, C.J.; GABRIEL, J.; and KERRY FITZGERALD (Senior Justice, Retired, Sitting by Assignment).



         This appeal and cross-appeal involve the propriety of a turnover order. In her appeal, Julia Teresa Heckert (Teresa)--who obtained the turnover order against her former husband Clyde L. Heckert, Jr.--challenges the trial court's refusal to order Clyde to turn over an additional bank account, its admission of Clyde's testimony about the contents of that account, and its award of less than the full amount of trial attorney's fees she sought. In his cross-appeal, Clyde raises three issues, in which he alleges that (1) the trial court erred by ordering him to turn over any property because Teresa did not meet her burden of proof to obtain turnover relief under section 31.002 of the civil practice and remedies code, (2) one of the bank accounts ordered to be turned over is exempt under section 42.0021 of the property code, and (3) the only way his nonexempt interests in a sole-member limited liability company and a limited partnership may be reached by a judgment creditor is by charging order. We reverse the part of the trial court's order requiring Clyde to turn over his Vanguard account, but we affirm the remainder of the trial court's order.

         I. Background

         In a separate personal-injury action that Teresa originally brought against Clyde in their divorce--but which the trial court severed from the divorce--a jury awarded Teresa $381, 342.47. A little over a year later Teresa filed a motion seeking the turnover of any of Clyde's nonexempt assets--or alternatively the appointment of a receiver--in satisfaction of the judgment. In his response to the motion, Clyde claimed that he owned two bank accounts, a 401k and an IRA, that are exempt assets not subject to turnover. After an evidentiary hearing, the trial court appointed a receiver and ordered Clyde to turn over the following assets to the receiver: his interest in three separate accounts--a Vanguard account, an Options Express account, and a T.D. Ameritrade account; his interest in a limited partnership--A2R, Ltd.--and a single-member limited liability company--Averse 2 Risk, LLC--both of which he formed after the divorce while Teresa's personal injury suit against him was pending; and his interest generally in "any other nonexempt financial accounts . . . [and] [a]ll other nonexempt property that is in [his] possession or subject to his control." The trial court also awarded Teresa $10, 000 in attorney's fees although she had sought $25, 800. The trial court did not order Clyde to turn over another of his accounts, a Fidelity Investments account.

         Teresa filed the first notice of appeal from the trial court's judgment, and Clyde filed a cross-appeal. For ease of discussion, we will address their issues out of order.

         II. Law Governing Turnover Actions

         Section 31.002 of the civil practice and remedies code sets forth the circumstances under which a trial court may order the turnover of assets:

(a) A judgment creditor is entitled to aid from a court of appropriate jurisdiction through injunction or other means in order to reach property to obtain satisfaction on the judgment if the judgment debtor owns property, including present or future rights to 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.

         (b) The court may:

(1) order the judgment debtor to turn over nonexempt property that is in the debtor's possession or is subject to the debtor's control, together with all documents or records related to the property, to a designated sheriff or constable for execution;
(2) otherwise apply the property to the satisfaction of the judgment; or
(3) appoint a receiver with the authority to take possession of the nonexempt property, sell it, and pay the proceeds to the judgment creditor to the extent required to satisfy the judgment.
(e) The judgment creditor is entitled to recover reasonable costs, including attorney's fees.
(f) A court may not enter or enforce an order under this section that requires the turnover of the proceeds of, or the disbursement of, property exempt under any statute, including Section 42.0021, Property Code. This subsection does not apply to the enforcement of a child support obligation or a judgment for past due child support.
(h) A court may enter or enforce an order under this section that requires the turnover of nonexempt property without identifying in the order the specific property subject to turnover.

Tex. Civ. Prac. & Rem. Code Ann. § 31.002(a) (West 2015). We review a turnover order for an abuse of discretion. See, e.g., Beaumont Bank N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991); Barcroft v. Walton, No. 02-16-00404-CV, 2017 WL 1738079, at *1 (Tex. App.--Fort Worth May 4, 2017, no pet.) (mem. op.). Such an order will not be reversed for an abuse of discretion if the judgment is sustainable for any reason, even if it is predicated on an erroneous conclusion of law. Main Place Custom Homes, Inc. v. Honaker, 192 S.W.3d 604, 627 (Tex. App.--Fort Worth 2006, pet. denied) (citing Buller, 806 S.W.2d at 226).

         Whether there is sufficient evidence to support a turnover order is a relevant consideration in determining whether the trial court abused its discretion. Buller, 806 S.W.2d at 226; Anoco Marine Indus., Inc. v. Patton Prod. Corp., No. 2-09-00210-CV, 2010 WL 1426869, at *2 (Tex. App.--Fort Worth Apr. 8, 2010, no pet.) (mem. op.). Although there must be evidence that the judgment debtor has nonexempt property that is not readily subject to attachment or levy, "[s]ection 31.002 does not specify, or restrict, the manner in which evidence may be received in order for a trial 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 it reach any particular quantum before the court may grant aid under section 31.002."[2]Tidwell v. Roberson, No. 14-16-00170-CV, 2017 WL 3612043, at *6 (Tex. App.-- Houston [14th Dist.] Aug. 22, 2017, no pet. h.) (quoting Tanner v. McCarthy, 274 S.W.3d 311, 322 (Tex. App.--Houston [1st Dist.] 2008, no pet.)); Blunck v. Blunck, No. 03-15-00128-CV, 2016 WL 690669, at *2 (Tex. App.--Austin Feb.18, 2016, pet. denied) (mem. op.). Here, the trial court admitted evidence and took judicial notice of its entire file.

         III. Evidence Supporting Turnover Order

         A. Assets Not Subject to Ready Attachment or Levy

         Clyde claims in his first issue that Teresa did not prove that he had any nonexempt property in his possession that could not readily be attached or levied upon. Courts may look to a judgment debtor's noncompliance and lack of cooperation in determining whether or not property can readily be attached. See Henderson v. Chrisman, No. 05-14-01507-CV, 2016 WL 1702221, at *4 (Tex. App.--Dallas Apr. 27, 2016, no pet.) (mem. op.). The Dallas Court of Appeals has held that evidence that a debtor had resources to pay the judgment, had chosen not to pay, and had admitted that the judgment was the only debt the debtor was not paying supported a conclusion that the property could not be readily attached. See Stanley v. Reef Secs., Inc., 314 S.W.3d 659, 669 (Tex. App.--Dallas 2010, no pet.). It has also held that evidence showing a judgment debtor had the resources to pay the judgment but chose to spend that money on something else showed an unwillingness and lack of cooperation sufficient to support a conclusion that the debtor's property could not readily be attached. Henderson, 2016 WL 1702221, at *4.

         Here, the evidence showed that after Teresa was awarded the personal-injury judgment, Clyde--whose paychecks had been directly deposited into his checking account during the divorce--began to cash his paychecks or deposit them into his new wife's bank account. He testified that he paid thousands of dollars per month--a total of $87, 000--toward the principal amount on his new wife's mortgage, for which she gave him a fifty percent ownership interest in her home. Her scheduled monthly mortgage payment at the time was around $500 per month. Clyde also refused to provide receipts for his expenses, prompting Teresa to file a motion to compel. Further, he had filed for bankruptcy protection during the divorce. See Blunck, 2016 WL 690669, at *3. We hold that there is sufficient evidence from which the trial court could have determined that any nonexempt property in Clyde's possession, including the shares of stock he transferred to A2R, Ltd., could not readily be attached. See, e.g., Henderson, 2016 WL 1702221, at *4; Hennigan v. Hennigan, 666 S.W.2d 322, 323-24 (Tex. App.--Houston [14th Dist.] 1984), writ ref'd n.r.e., 677 S.W.2d 495 (Tex. 1984); see also, e.g., Europa Int'l, Ltd. v. Direct Access Trader Corp., 315 S.W.3d 654, 657 (Tex. App.--Dallas 2010, no pet.) (holding that shares of stock cannot be readily attached or levied on by ordinary process); Universe Life Ins. v. Giles, 982 S.W.2d 488, 492 (Tex. App.--Texarkana 1998, pet. denied) ("Under current law, there is no requirement that the judgment creditor demonstrate that other methods of collecting the judgment have failed. A judgment creditor need not first exhaust other legal remedies prior to seeking relief under the turnover statute if the statutory requirements are met." (citations omitted)).

         We will next address whether the record supports the turnover relief as to property specifically named in the turnover order that the parties complain about on appeal.

         B. Whether Specific Items Are Exempt

         1. T.D. ...

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