Be cause sever al of the people involved in this case have ide ntical last names, we will refe r 1 to those individuals by

their first name s. We note that no repor

ter’s r ecor d was filed in this ca se and that Denise stated in her br ief 2 that no repor

ter’s r ecor d was pre pare d beca use “the court did not have a trial” an d beca use “[t] he court based ever

y thing upon the pleading s and attachme nts.” Acc ording ly , the fa ctual bac kg round comes from the cler

k’s rec ord and from uncontested statements in the parties’ briefs. See Te x. R. Ap p. P. 38. 1 (st a tin g tha t a pp e llate c ourt s w ill “ a c c e pt a s tr ue the fa c ts s ta te d” in b ri e fs “ un le ss another party contra dicts them”). 

### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 9 -00 185 -CV
De nise Hod e s , A ppe lla nt

v. Diagnostic Experts of Austin , Inc. , Appellee
F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 201S T JUDICIAL DISTRICT NO. D-1- GN-08- 0025 40 , HO NORAB LE JOH N K. DIETZ , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N Diag nostic Ex perts of Austin, I nc. (“Diag nostic”) filed a writ of gar nishment seeking the re le a se of

fu nd s f ro m a trus t c re a te d a ft e r t

he sa le of pr op e rt y be lon g ing

to D e nis e Ho de s. See 1 Tex. R. C iv. P. 658. I n response , Denise filed a mot ion to dissolve the writ of g arnishment. See id. R. 664a. Ultimately , the district court de nied Denise ’s motion and deter mined that Diag nostic was

e nti tle d to the mon e y re qu e ste d. De nis e a pp e a ls the jud g me nt of the dis tr ic t c ourt . We wi ll a ff ir m.
BACK GR OUND Denise H odes and H enry

Hodes we re divorc ed seve ral y ear s ag o. Un de r t he te rm s 2

o f th e d iv o r c e d e c r e e , th e H o d e s e s jo in tl y o w n e d a 1 7
. 5 a c r e tr a c t a s te n an ts in c o mm o n . A fe wThe re cord doe s not specify the nature of the trust. 3 Other tha

n stating that Diag nostic sued Denise for c laims of “fr aud ulent transfe r of 4 pr op e rt y ” and that De nis e wa s an “ of fi c e r and fi du c iary” of

Di a g no sti c , th e re c or d d oe s n ot a rt ic ulate what the c laims were or the nature of the relationship between De nise and Dia g nostic. 2 y ear s after

the di vorce , Denise filed for bankruptcy

. On her bankruptc y application, De nise listed her interest in the 17.5 acr e trac t a nd an adjac ent 10 acr e trac t of land. Denise a lso claimed that the two proper

ties were exempt from the claims of her cre ditors beca

use bot h proper

ties constituted her homestead. See Tex. P rop. Code Ann. §§ 41.001 ( West S upp. 2009) (listing ty pes of e ncumbra

nces that “ may be pr op e rl y

fi xed on ho me ste a d” ), .0 02 (We st 20 00 ) (d e fi nin g ho me ste a d)

. On c e De nis e filed for bankruptc y , Debor ah L ang ehenning was appointed as t he bankruptcy trustee for the ca se. See 11 U.S.C.A. § 1322(a) (1) ( West 2004) (requir ing a ppointment of trustee to super vise execution of bankr uptcy plan). L ang ehenningfiled a motion objecting to the classification of both tracts of land as a homestead, but the ba

nkruptcy court de nied that motion. Af te r D e nis e fi le d f

or ba nk ru ptc y , s he and He nr

y a g re e d to sel l the 17 .5 a c re tr a c t in order to reimburse Tr avis County fo r ex p en s es paid on beha lf of their son, Ty ler Hode s. The proper ty wa s s o l d p u rs u ant t o an orde r issued by a juvenile c ourt. The or der spe cified that the proce eds we re to be place d into a trust with J on Evans as trustee
. Approxim ately half of the 3 proce eds we re use d as re imbursement, and the r emainder was lef t in the trust. Prior to Denise filing for ba nkruptcy , Diag nostic sued Denise arguing that D e n ise had fra udulently transfe rre d proper ty while she wa s “an of

fice r and f

iduciary” of D iag nostic. Th e su it 4

w a s i n i t i a l l y f

i l e d i nd i s t r i c t c o u rt , b u t i t w a s l a t e r tr a n s f e r r e d t o t h e b an kr

u p t c y c o u rt
. U l t i m a t e l y, the bankr uptcy court orde red D enise to pay Diag nostic over thre e million doll ars.3 A fe w m onths after

the bankr uptcy court issued a

judgme nt in favor of

Diag nostic and

ov e r s ix mon ths a ft e r the pr oc e e ds fr om the sa le of the pr op e rt y we re pla c e d in a

tr us t, D ia g no sti c fi le d a n a pp lic a tio n f

or wr it o f g arn ish me nt i n th e dis tr ic t c ourt se e kin g the re le a se of the fu nd s h e ld by Evans as truste e. In response , Denise fi l ed a motion t o dissolve the writ of g arnishment and

ass e rte d th a t th e f

u n d s a t is s u e w e r e e xe mp t b e c a u s e th e y w e r e p r o c e e d s f r o m th e s a le o f

her homestead. The district court denie d Denise’ s motion to dissolve, deter mined that the funds in the trust w ere “not exempt from g arnishment under applicable Texas law,” a nd further conclude d that the 10 ac re tra ct of land that had not been sold wa s Denise’ s h omestead. U ltimately , the district court orde red Eva

ns to pay Diag nostic $67,128.54. Shortly afte r the district cour

t relea sed its decision, Denise f iled this appeal.
STA ND AR

D O F RE VI EW Whe nr e v i e w i n g a

r u l i n g o na

m o t i o nt o d i s s o l v e a

w r i to f g ar n i s h m e n t , a

p p e l l a te courts apply

an abuse of discre tion standard. Gene ral Elec. Capital Corp. v. ICO, Inc. , 230 S.W .3d 702, 705 (Tex. App.—Houston [14t h Dist.] 2007, pet. denied) . A trial cou rt ab u ses its discretion if it acts in an ar

bitrary or unre asonable manner or without ref

ere nce to an y gu i d ing r

ules or principles. Downer v. Aquam arine Operators, Inc

. , 701 S.W .2d 238, 241-42 (Te x . 1985).

DI SCU SSIO N I n her sole issue on appea l, Denise contends t hat the district cour t erre d by awa rding the proce eds to D iag nostic. When asserting that the district court e rre d, Denise r aises two re lated arguments.I n h er brief, De nise admits that the “cr ux of [her] arg ument [below] was that she w as 5 entitled to the balanc e of he r hal f o f t h e monies bec ause the bankruptc y court ha d rec og nized her homestead e x emption.” 4

First, she argues that the 17.5 ac re tra ct was pa rt of her homestead. A s support for thi s c on te nti on , De nis e no te s that the ba nk ru ptc y c ourt de nie d L ang e he nn ing ’s mot ion ob je c tin g to t h e c h ar a c t e r i z a t i o n o f b o t h t h e 1 7
. 5 a c r e t r a c t an d t h e 1 0 a c r e t r a c ta s h e r h o m e s t e a d

. A c c o r d i n g l y, Denise insists that the bankruptc y court e ssentially

decla red that the 17.5 acr e tra ct was pa rt of her homestead. 5 Second, De nise contends that be cause the trac t of land was pa rt of her homestead, the proce eds obtained f

rom the sale of

the prope rty ar e ex em pt from seizure by a cr editor. Unde r the proper ty code, pr ocee ds from the sale of a homestead are exempt from seiz ure, but the ex emption only lasts for six months. Tex. Prop. Code Ann. § 41.001(c)

. I n other wor ds, if the proc eeds a re not applied to the purc hase of a new homestead within the s ix -month period, the exemption is lost. In re Zibman , 2 68 F .3 d 2 98 , 3 05 (5 th C ir . 2 00 1) . A lth ou g h D e nis e a c knowl edges th e six- mon th deadline an d ad m i t s t hat Diag nostic filed the wr it of g arnishment more than six months after the proper ty was sold, Denise argues that the proce eds from the sale of her homestead wer e still exempt when Diag nostic attempted to collec t the proce eds throug h g arnishment bec ause the proce eds we re place d in a cour

t-order ed trust immediately afte r the prope rty was sold a nd have r emained the re e ver since. In other wor ds, Denise a ppear s to alleg e that the six-month deadline was tolled when the pr oc e e ds we re pla c e d in the tr us t and ins ist s that sh e ha s no t a ba nd on e d a ny ri g ht t o th os e pr oc e e ds

. I n dete rmining w hether

the district court a

bused its discretion in awa rding the proce eds to Diag nostic, we need not deter mine whether the property sold was in fact par t of Denise’ sAl tho ug h w e have be e n una ble to f ind Te xas c a se s a dd

re ssi ngwh e the r t oll ingis 6 permissible in these circ umstances, there is some support for the proposition that mere ly placingthe proce eds in the ca re o f a co urt does not toll the six -month period. Se e Sh ar ma n v . S c hu ble , 846 S
. W
. 2 d 5 7 4 , 5 7 6 (T ex . Ap p . — Ho u s t o n[ 1 4 t h Di s t
. ] 1 9 9 3 , o ri g. p ro ce ed i n g) ( s t at i n g t h at al t h o u gh pr oc e e ds ha d be e n in court re g istry fr om time of sa le of pr op e rt y , s ix-m on th d e a dli ne wa s a bo ut t o expire). As support for her a ssertion that tolling is appropr iate, De nise relies on a single case . See 7 In re J eter , 48 B.R. 404 (B ankr. N.D. Tex. 1985). That case involved a lien ag ainst J u d y J et er ’s homestead held by

the FD I C. Id. a t 40 7. B oth Jete r a nd the F DI C a g re e d to se ll the pr op e rt y , to deposit the proce eds in the cou rt ’s re gi s try , and to wait for the cour t’s deter mination reg arding “ent i t l ement to t hose monies.” Id. at 409. Afte r six months passed, the F DI C asserted that the proce eds no longe r had a homestead e x emption. Id. U lt im a te ly , th e c o u rt c o n c lu d e d th a t t h e s ixmonth de adline did not a

pply

. Id. Howeve r, rather than state a rule that the place ment of proc eeds in t he c ourt ’s re g istry

tol ls the six- mon th s ta tut or y pe ri od , th e c ourt

sim ply c on c lud e d th a t it

wo uld be ine qu ita

ble to a pp ly the six- mon th d e a dli ne be tw e e n p art ie s w ho e nte re d in to a n a g re e me nt t o s e ll the pr op e rt

y and to p la c e the pr oc e e ds in the c ourt ’s re g istry wh ile the c ourt

de c ide d w hic h o f t

ho se parties wa s entitled to the proce eds. Id. Unlike Jete r , there was no a g ree ment betwee n Denise a nd Diag no s t i cs re g ardingthe place ment of the proc eeds in a court’s r eg istry

. Acc ording ly , the equitable principles at stake in Jete r are not applicable he re. Moreove r, even assuming that the cour t in Jete r was attempting to state a rule that the pla ceme nt of proce eds in a c ourt reg istry can toll the deadline at issue, that same c ourt la te r e xplic itl y

state d, a s d e sc ri be d a

bo ve , th a t a

pa rt y se e king to t oll the de a dli ne mus t take so me action to protec t its rights befor e the pa ssag e of the six -month deadline. See In re Crum , 4 14 B .R. 103, 110 (B ankr. N .D. Tex. 2009). 5 homestead at the time of

the sale, nor

need w e af

firmatively

decide whether

Texas law allows the ty pe of tolling sug g ested by Denise. Even a ssuming that the statutory period may

be tolled, the fe w 6 fe de ra l c a se s a dd

re ssi ngthi s su

bje c t ha ve e xpla ine d th a t to lli ngis o nly pe rm iss ibl e if

a party specific ally

reque sts the court to toll the six -month statutory period be fo re t h e ex piration of the deadline. See I

n re Crum , 41 4 B .R. 10 3, 11 0 (B ank r. N. D. Te x. 20 09 ) ( statin g that to lli ngis o nly appropr iate whe n “the de btor .

. . take[s] some ac tion to protect his rig hts (i.e., re quest tolling) be fore the ro llo ver

pe ri od e xpir e s” ); see also In reBading , 376 B.R. 143, 156 (B ankr. W.D. Tex. 2007) (tolling de adline whe n party filed motion to tol l before expiration of six -month deadline)

. 7I n her motion to dissolve the g arnishment, De nise did mention the conce pt of tolling, but 8 s h e d i d n o t as s er t that the statutory deadline w as tolled due to the plac ement of the funds into the c are of Ev ans a s tr

us te e . Rathe r, De nis e a sse rt e d, wi tho ut c itatio n to a uth or ity , th a t the six- mon th deadline w as tolled bec ause the proce eds we re “ in bankruptcy .” Releva nt fede ral c ase la

w demonstrates that the filing of a bankr uptcy petition has no eff

ect on the six-month deadline. See In re Zibman , 268 F.3d 298, 305 (5th Cir. 2001) (conc luding that filing of bankruptc y shortly afte r ho me ste a d w a s so ld d id n ot a ff e c t si x-mo nth

de a dli ne e xemp tin g ho me ste a d p ro c e e ds ); In re Z a v a la , 36 6 B .R. 64 3, 65 4 ( B ank

r. W.D . T e x. 20 07 ) ( e xpla ini ngtha t f ili ngof ba nk ru ptc y be fo re or a ft e r s a le of homestea d does not aff ect six-month deadline). Even a ssuming that the de adline wa s tolled by the ba nk ru ptc y sta y imp os e d whe n De nis e fi le d h e r b ank ru ptc y pe tit ion , th e pr op e rt

y wa s n ot s old until four months after D enise re ceive d her individual bankr uptcy discharg e, and the wr it of g arnishment was not filed until approx imately six months after the proper ty was sold. See 11 U. S.C. A. § 3 62 (c )( 2) (C ) (We st Supp . 201 0) (e xpla ini ng that ba nk ru ptc y sta y e xpir e s at “ the tim e a discha rg e is g rante d or denie d”). The c oncept of tolling was also alluded to by Diag nostic in its response to Denise’ s motion t o d i s s o l v e t h e ga rn i s h m en t
. S p ec i fi ca l l y , Di agn o s t i c m e n t i o n edt h at De n i s e a s s er t edd u ri n g a hear ing on the motion to di ssolv e t h at “[t] he 6 month exemption period for homestea d proce eds should be tolled during the per iod that the funds wer e held by” Eva ns. Howeve r, that asser

tion was made in a he aringthat was he ld over ten months af ter the pr operty was sold a nd well past the end of the six- mon th pe ri od

. Mo re ov e r, a s des c ri be d a bo ve , n oth ingin t

he re c or d in dic a te s th a t D e nis e made a simil ar a ssertion within the six -month period, and there is no indication that the district court e ve r m a d e an y

r u l i n g r e g ar d i n g t o l l i n g . F u rt h e r m o r e , a l t h o u g h w e c an n o tb e c e rt a i nw h a tp re c ise asser tion was made at the hear ing be cause no repor ter’s r ecor d was filed, D iag nostic’s summary of De nis e ’s c on te nti on

is s imi lar t o th e argume nt D e nis e ra ise s o n ap pe a l. E sse nti a lly , D e nis e se e ms to assert th at the statut or y de a dli ne is a

uto ma tic a lly

tol le d w he n p ro c e e ds are pla c e d in a tr us t p u rs u an tt o a c o u rt o rd er

ev en i nt h e ab s en ce o f a n y ef fo rt b y t h e p ar t y s ee k i n g t h e b en ef

i to f t o l l i n g. Ho we ve r, a s me nti on e d a bo ve , r e le va

nt f e de ra l c a se law h a s su g g e ste d th a t a pe rs on se e kin g to t oll the six -month deadline must eng ag e in some aff irmative act to protect their inter ests such as f iling a motion to toll the dea dline. See I n re Crum , 4 14 B.R
. 10 3, 11 0 (Bank r. N. D. Te x. 20 09 ); In re Bading , 376 B.R. 143, 156 (B ankr. W.D. Tex. 2007). Simpl y surmising that the de adline should be tolled, without more, would not seem to satisfy this requireme nt, and the re cord c ontains no other ref ere nce to a

ny action by Denise r eg ardingthe six -month deadline.

6 No t hing in the r ecor d befor e us sug g ests that Denise e ver spe cifica lly asked the district court or any court to toll the statutory deadline befor e the dea dline expired. A c c o r d i n g l y, 8

we c annot conc lude that the district cour t abused its discr etion by concluding that the proce eds we re7

not exempt or by

awa rding the proce eds to Diag nostic. There fore , we ove rrule D enise’s only issue on appea l.
CO NC LU SION

Havingoverr

uled Denise ’s issue on appeal , we affirm the judg ment of the district court.

David Pury ear , J ustice Be fore J ustices Patterson, Pury ear and Pember

ton Affir med Filed: Jul y

23, 2010