RFVERSF and REMANI): and Opinion Filed April l 2013.

In The

Qiøurt uf Apiahi

Thtrirt uf exa at 1alla

No, 05- 12-00471-CV

MEDO PJFTROVIC, Appellant

V.

4HG FANNIN INVESTMENTS, LLC, KYLE PAYNE, AND MARY PAYNE, Appellees

On Appeal from the 68th judicial District Court

Dallas County, Texas

Trial Court Cause No. 11-13439-C

OPINION

Before Justices FitzGerald, Fillmore, and Evans

Opinion by Justice Fillmore

Medo Pjetrovic appeals the dismissal of his claims against 4HG Fannin Investments.

LLC (4HG), Kyle Payne, and Mary Payne arguing, in one issue, that the trial court erred by

dismissing his claims because the receiver acting on Pjetrovic’s behalf did not have authority to

agree to the dismissal of the lawsuit. We reverse the trial court’s order dismissing Pjetrovic’s

claims and remand this case for further proceedings.

Background

On November 24, 2008, Eloy Construction Interiors, LLC obtained a default judgment in

the amount of $3,550 against Pjetrovic in cause number DC-08-10524, Eloy Construction

Interiors, LLC v. Medo Pjetrovic, in the 10 1st Judicial District Court of Dallas County, Texas.

On December 28. 2010, a judgment was rendered against Pjetrovic by the 68th Judicial District
Court in cause number DC-09 17452, I)icier Schwarc d/b/a Market Square v. Medo Pjetrovic.

Jerilvn (jeo:ef/d/b/a Venice 11(1/ian Restaurant, (mu Frances Pje!roiu. A writ ol execution was

issued on the Schwarz judgment and, on October 4. 2011, the Fannin County sheriff sold two

pieces of real property belonging to Pjetrovic. 4HG’s successor in interest bought one of the

properties. and Kyle and Mary Payne bought the other.

On (ctober 1 ),20l I, Pjetrovic sued 41-IG and the Paynes in the case that is the subject of

this appeal (the 4HG litigation) seeking to set aside the two deeds and to quiet title to the real

property in Pjetrovic. In response to a motion for summary judgment filed by 41-IG and the

Paynes, Pjetrovic indicated that, if required to do so by the trial court, he would tender into the

registry of the court the amount of money paid by 4HG and the Paynes for the real property. The

trial court required Pjetrovic to tender $271,850 into the registry of the court before January 13,

2012.

On January 9, 2012, based on Eloy’s application for turnover, an associate judge signed a

turnover order in the EIov litigation that appointed a receiver to “take possession of, maintain,

operate, and/or sell the leviable assets” of Pjetrovic, specifically including Pjetrovic’s claims and

causes of action in the 4HG litigation, and to assist Eloy in satisfying the Eloy judgment. A

“green card” for a certified mailing indicates Pjetrovic received notice of the turnover order on

January 10, 2012.

At 3:39 p.m. on January 12, 2012, counsel for the receiver sent an email to Pjetrovic’s

counsel in the 4HG litigation informing him of the receivership, stating the amount owed on the

Eloy judgment, including attorney’s fees, was approximately $6,000, and demanding Pjetrovic’s

counsel release any funds belonging to Pjetrovic that were in his counsel’s possession. Counsel

This judgment is not in the appellate record.

—2—
br the receiver also indicated there was a hearing set in the 41-IG litigation at S:45 a.m. on

January 13. 201 2. he intended to appear at the hearing on behalf of the receiver, and he needed

the file for the case delivered to his office by 5:00 p.m. on January 12, 2012. Pjetrovic’s

counsel, who was apparently in depositions on January 12, 2012, responded by email at 6:54

p.m. that there was not a hearing scheduled in the case ftr January 13th, he would he “out most

of tomorrow, and he would review the email and “get back” to the receiver’s counsel, “likely

early next week.”

On January 13. 2012. 4HG. the Paynes, and the receiver agreed to settle Pjetrovic’s

claims against 4HG and the Paynes for $6,000, and the receiver agreed to dismiss Pjetrovic’s

claims against 4HG and the Paynes. The trial court signed an agreed order dismissing

Pjetrovic’s claims against 4HG and the Paynes.

On January 17. 2012. Pjetrovic appealed the associate judge’s turnover order in the Eiov

litigation to the 101st District Court. On February 10, 2012. Pjetrovic filed in the 41—IG litigation

a combined motion to set aside or vacate the order dismissing the case and motion for new trial.

Pjetrovic contended the receiver did not have authority on January 13, 2012 to agree to dismiss

the lawsuit because the turnover order in the Eloy litigation had been appealed to the 10 1st

District Court. Pjetrovic also argued he did not receive notice of the request to appoint a receiver

or of the turnover order, he did not consent to the dismissal of his claims, and equity required

that the dismissal be set aside. On March 14, 2012, Pjetrovic filed a supplement to the motion

stating the Elov judgment had been paid. The judge for the 101st District Court denied

Pjetrovic’s appeal of the associate judge’s order on February 27, 2012.

4HG and the Paynes filed a response to Pjetrovic’s combined motion asserting the

turnover order was valid on January 13, 2012 because there was no pending appeal of the

—3—
associate judge s order on (hat date. 41-IG and the Pavnes also argued that, because Pjetrovic

failed to have a hearing on his appeal in the 101 st District Court within thirty days of the

associate judge’s order, the turnover order was confirmed as the order of the district court on

Februar 9. 2012. Finally. 3KG and the Paynes asserted the receiver did not need Pjeirovics

consent to settle the claims, Pjetrovic did not have standing to flle the motion to set aside, and

there was no equitable basis on which to set aside the dismissal.

The trial court did not rule on Pjeirovic’s motion to set aside or vacate the order

dismissing the case. Pjetrovic’s motion for new trial was overruled by operation of law.

Motion to Dismiss

41-1(1 and the Paynes filed a motion to dismiss this appeal asserting that, because Pjetrovic

failed to appeal the turnover order in the Elov litigation to this Court. he does not have standing

to challenge the authority of the receiver in this appeal. A lack of standing deprives a court of

subject matter jurisdiction. Tex. Ass’n of Bus. v. Tex. Air &mtrol Bd., 852 S.W.2d 440, 444—45

(Tex. 1993); Hall v. Douglas, 380 S.W.3d X60, 872 (Tex. App.—DalIas 2012, no pet.). “IAI

party whose own interest is prejudiced by an error has standing to appeal.” Torrington Co. v.

Stutzrnan, 46 S.W,3d 829, 843 (Tex. 2000); see also Hall, 380 S.W.3d at 872 (“A person has

standing to sue when he is personally aggrieved by the alleged wrong.”).

In this appeal, Pjetrovic is not attempting to challenge the appointment of the receiver.

Rather, Pjetrovic is arguing the trial court erred by dismissing his claims because, on January 13,

2012, the receiver did not have authority to agree to the dismissal. Pjetrovic further asserts that

he was harmed by the settlement because his claims were worth much more than the settlement

value agreed to by the receiver. We conclude that Pjetrovic has asserted he was prejudiced by

the trial court’s dismissal of his claims based on the receiver’s allegedly unauthorized agreement

-4-
to settle the claims against 41 IG and the Pavoes. There1re. regardless of whether Pjetrovic

appealed the ruling of the 101st District Court conOrining the associate judge’s appointment of

the receiver, Pjetrovic has standing to assert the receiver did not have authority on January 13,

2012 to settle Pjetrovic’s claims against 41-IG and the Paynes See. e.g.. Allstate Indem. (‘a. r’.

Earth, 204 S.W,3d 795, 796 (Tex. 2006) (per curiam) (plaintiff (lid not have standing to assert

insurer settled her claim in arbitrary and unreasonable manner because she did not claim manner

in which insurer settled claim caused her any injury). Accordingly, we deny 4HG and the

Paynes’ motion to dismiss this appeal.

I)ismissal of Iletrovic’s Claims

In one issue. Pjetrovic contends the trial court erred by (hsmissing Pjetrovic s claims

against 4HG and the Paynes because the receiver did not have authority to act on behalf of

Pjetrovic on January 13, 2012.

Standard at Review

Pjetrovic’s complaint requires us to determine the effect of chapter 54A of the

government code, setting out a statutory scheme governing the appointment and use of associate

judges in civil cases, on the receiver’s authority to agree to dismiss Pjetrovic’s claims, We

review questions of statutory construction de novo. Molinet v. Kimbreil, 356 S.W.3d 407, 411

(Tex. 2011).

When construing a statute, our primary objective is to ascertain and give effect to the

Legislature’s intent. TEX. GOv’T CODE ANN. § 3 12.005 (West 2005); Molinet, 356 S.W.3d at

411. “We look first to the statute’s language to determine that intent, as we consider it ‘a fair

assumption that the Legislature tries to say what it means, and therefore the words it chooses

should be the surest guide to legislative intent.” Leland v. Brandal, 257 S.W.3d 204, 206 (Tex.

—5—
2008) (quoting Fitzgerald v. Adianced Spine Fixation Sys, Inc.. 996 S.W.2d 864, 866 (Tex.

1999)); see also Moflnet, 356 S.W.3d at 41 1, We consider the statute as a whole rather than

locusing upon individual provisions in isolation. TGSNOPEC Geophvvical co. v. Combs, 34()

S.W.3d 432. 339 (Tex. 2011). 11 a statute is unambiguous, we adopt the interpretation supported

by its plain language unless such an interpretation would lead to absurd results. Id. (citing Tex.

Dept of Protective & I?egularorv Servs. v. Mega child Care, 145 S.W.3d 170, 177 (Tex. 2004)).

ilpplicabk’ Law

Effective January 1, 2012, the Legislature amended the statutory provisions governing

the appointment and use of associate judges in civil eases. See TEX. GOv’T CODE ANN.

54A. l() lW—. 118 (West Supp. 2012). Relevant to this appeal is the statutory scheme for seeking

review of a decision of an associate judge by the referring court and the impact of any such

request for review on the associate judge’s decision.

A district court or a statutory county court may refer any civil case or portion of a civil

case to an associate judge. Id. §* 54A.l0l, 54A.106(a). 2After hearing a matter, the associate

judge is required to notify each attorney participating in the hearing of the associate judge’s

decision. Id. § 54A. 111(a). Chapter 54A sets out two separate avenues by which a party, after

receiving notice of the associate judge’s decision, can seek review of the decision by the

referring court.

First, a party may appeal the associate judge’s decision to the referring court. Id.

§ 54A.111(b),(e), 54A.117. Unless a party appeals the associate judge’s decision to the

referring court, the associate judge’s decision has the same force and effect as an order of the

referring court. Id. § 54A. 111(a). Except for a decision by the associate judge that issues a

2 Any party may object to an associate judge hearing a trial on the merits Id. § 54 lO6(by(c).

—6—
temporary restraining order or a temporary injunction, a party may file an appeal of the associate

judge s order in the referring court “not later than the seventh da after the date the party

receives notice of the decision.” Id. § 54A.lll(b). The appeal is tried de novo in the referring

court and is limited to those matters specified in the appeal. Id. § 54A. lii (c). Except on leave

of the referring court, a party may not submit. on appeal any additional evidence or pleadings. Id.

The referring court may modify, correct, reject, reverse, or recommit the issue to the associate

judge within thirty days of the associate judges decision: otherwise, the associate judge’s

decision becomes the decree of the referring court. Id. § 54A.l 17.

The second avenue for review set out in chapter 54A is a (Ic novo hearing before the

referring court. Id. §* 54A. 11 2. 116. A party must file a written request for a de novo hearing

with the clerk of the referring court “not later than the seventh working day after the date the

party receives notice of the substance of the associate judge’s decision. Id. § 54A.l 15(a). 3 The

party must specify the issues being presented to the referring court in the de novo hearing and

must give notice to opposing counsel of the request. Id. § 54A.l 15(h)—(c). Any other party may

file a written request for a de novo hearing within seven working days after the initial request

was filed. Id. § 54A. 115(d). The trial court must hold the de novo hearing within thirty days of

when the initial request for a de novo hearing was filed. hL § 54A.l 15(e). Without leave of

court, a party is allowed to present witnesses during the de novo hearing, and the referring court

may consider the record from the hearing before the associate judge if the record was taken by a

court reporter. Id. § 54A.1 15(f).

A party may not, however, demand a second jury in a de novo hearing before the referring court if the associate judge’s proposed order or

judgment resulted from ajury trial. Id. § 54A. 115(h).

—7—
While an issue is pending a de novo hearing beftwe the referring court, a proposed order

or judgment of the associate judge. except for an order appointing a receiver, is in full force and

efkct and is enforceable as an order or judgment of the referring court. Id. § 54A. 113(a).

I lowever, it a request for a de novo hearing is not timely tiled or the right to a de novo hearing is

waived, the proposed order or judgment of the associate judge becomes the order of the

referring court only on the referring court’s signing the proposed order or judgment. Id.

54A1 13(h).

Analysis

In this case, the associate judge issued the turnover order appointing a receiver on

January 9, 2012. Pjelrovic received notice of the associate judge’s decision on January 10, 2012.

Pjetrovic filed an appeal of that decision on January 17. 2012. within seven days of receiving

notice of the decision, hut did not file a request for a de novo hearing before the referring court.

Relying on section 54A. 113(a) of the government code, Pjetrovic argues the associate judge’s

order appointing a receiver was not in effect on January 13. 2012 when his claims were

dismissed. See id. § 54A. 113(a) (except for order providing for appointment of receiver,

proposed order of associate judge is in lull force and effect pending de novo hearing before

referring court). However, Pjetrovic only appealed the associate judge’s order and did not

request a de novo hearing. Accordingly, section 54A. 113(a) does not apply in this case.

Relying on section 54A.11l(a) of the government code, 4MG and the Paynes assert the

associate judge’s order appointing a receiver was in full force and effect on January 12, 2012

because Pjetrovic had not yet appealed the associate judge’s order. See Id. § 54A.11 1(a)

(associate judge’s decision has the same force and effect as order of referring court unless party

Prior to the hearing before the associate judge, a party may, either in writing or on the record, waive its right to a de novo hearing before the

referring court. Id. § 54A.I 12(c).

—8—
appeals decision as set out in statute). According to 4MG and the Paynes, the order appointing

the receiver was effective from January ,2)l 2 until January 17. 2012 when Pjetrovic filed his

appeal. It was then not elTective until February o), 2012 when the associate judge’s order became

the decree of the district court due to the district court’s failure to take timely action on the

appeal.

We agree with 41-IG and the Paynes that the provisions ot chapter 54A of the government

code relating to an appeal of the associate judge’s order without a request for a de novo hearing

apply to this case. We cannot, however, agree that the associate judge’s order was in effect on

January 13, 2012. Section 54A.1 11(a) provides that the associate judge’s decision has the same

force and effect as an order of the referring court “unless a party appeals the decision as provided

by Subsection (h).” Id. § 54A. 111(a). As relevant to this case, subsection (h) gave Pjetrovic

seven (lays after the date he received notice of the associate judge’s decision in which to file the

appeal. Id. § 54A. 111(b). Pjetrovic timely filed his appeal tinder subsection (b) and, therefore,

section 54A. 111(a) was not applicable to give the associate judge’s decision the full force and

effect of an order of the referring court. To read the statute to allow the associate judge’s

decision to be effective despite Pjetrovic’s timely appeal of the order could very well make the

right to appeal meaningless.

We conclude that, in light of Pjetrovic’s timely appeal of the associate judge’s order, the

associate judge’s order was not in full force and effect on January 13, 2012. Accordingly, the

receiver did not have authority to settle Pjetrovic’s claims against 4HG and the Paynes on

January 13, 2012, and the trial court erred by dismissing the claims based on the receiver’s

agreement to do so.

—9--
We resolve Pjctrovic’s sole issue in his favor. We reverse the trial court’s dismissal of

Pjetrovie’s claims against 4HG and the Paynes and remand this case for further proceedings.

/ /

ROBERT M. FILLMORE

JUSTICE

120471 F.P05

—10—
(Ltutrt tif Apicihi

FiftI! Jitrirt vf ixai at Jat1a

JUDGMENT

NI EDo PJ l-TR( )VIC, Appelhint

No. 05-12-00471 -CV V.

11lG FANNIN INVESTMENTS, LLC.

KYLE PAYNE. AND MARY PAYNE

Appel lees

On Appeal from the 65th Judicial i)istrict

Court. Dallas County, Texas

Trial Court Cause No. 11-13439-C.

Opinion delivered by Justice Fillmore,

Justices FitzGerald and Evans participating.

In accordance with this Court’s opinion of this date, the judgment of the trial court is

REVERSED and this case is REPIANDED to the trial court for further proceedings.

It is ORI)EREI) that appellant Medo Pjetrovic recover his costs of this appeal from

appclleLs 4HG I annm Investments, LLC, Kyle Payne, and Mary Paync

Judgment entered this I day of April, 2013.

ROBERT M. FiLLMORE

JUSTICE