COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

WC 4TH AND RIO GRANDE, LP,

 Appellant, 

v. 

LA ZONA RIO, LLC,

Appellee.

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No. 08-22-00225-CV

Appeal from the 

345th Judicial District Court

of Travis County, Texas

(TC# D-1-GN-22-000195)

SUBSTITUTE MEMORANDUM OPINION

Appellant’s motion for rehearing is denied. However, we withdraw our opinion dated

May 25, 2023, and issue this opinion in its place.1 We do the same with regard to our previously 

issued opinion in a companion case, which is similarly styled, in Cause No. 08-22-00073-CV.

FACTS UNDERLYING THE FIRST APPEAL

As we explained in our first opinion in Cause No. 08-22-00073-CV, a Harris County 

district court entered an order appointing attorney Seth Kretzer as a receiver to collect on a 

judgment owed by World Class Capital Group (WCCG) and Great Value Storage to Princeton

Capital Corporation (the Receivership Order). Among other things, the Receivership Order (1)

1 Two of the original panel members are divided on granting the motion for rehearing, and the third member is no 

longer able to participate in the case. Pursuant to TEX. R. APP. P. 49.3, Chief Justice Alley appointed himself as the 

third member of the panel and voted to deny the motion for rehearing and join the substituted panel opinion.
2

directed WCCG to turn over any “interests” it had in any partnership or limited liability company;

(2) gave Kretzer the authority to sell, manage, and operate any limited liability company in which

WCCG is a “member”; and (3) authorized Kretzer to take possession of the judgment debtor’s

assets, including “causes of action.”

In his capacity as the receiver, Kretzer entered an appearance in a lawsuit pending in a

Travis County district court in which WC 4th and Rio Grande, LP (Rio Grande, LP) had sued

Appellee La Zona Rio, LLC (La Zona Rio) in an attempt to stop La Zona Rio from foreclosing on

a building Rio Grande, LP owned (the La Zona Rio Lawsuit). In his notice, Kretzer stated that he

was replacing the attorney for Rio Grande, LP, which he asserted was a “subsidiary” of WCCG;

however, he filed no evidence in support thereof.

Rio Grande, LP then filed a motion challenging Kretzer’s authority to act on its behalf in

the La Zona Rio Lawsuit, arguing it was neither a subsidiary of WCCG nor an entity owned or

managed by WCCG, but instead a separate legal entity. The trial court did not rule on the motion.

Instead, the trial court impliedly found that Kretzer had the authority to act on Rio Grande, LP’s

behalf and granted a joint motion to dismiss the lawsuit based on the representations made by

Kretzer and La Zona Rio’s attorney that the parties had resolved their claims against each other.

Rio Grande, LP thereafter filed a motion seeking reconsideration of the dismissal order, again 

challenging Kretzer’s authority to act on its behalf and contending it was a separate legal entity

from WCCG and therefore could not be held liable for WCCG’s debts. In support thereof, it

provided documentation from its tax records indicating that Rio Grande, LP consisted of a general

partner (WC 4th and Rio Grande GP, LLC) with a 25% interest in the partnership and three limited

partners, two of which had a significant interest in the partnership: Sangreal Investments, II, LLC

and Flash Property Management, LLC, which were each listed as having a 33.75% interest in the
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partnership. After the motion was overruled by operation of law, Rio Grande, LP appealed from

the order dismissing its lawsuit, which was docketed in this Court as No. 08-22-00073-CV.2

FACTS UNDERLYING THE SECOND APPEAL

Shortly thereafter, acting pursuant to the settlement agreement he had negotiated in the 

La Zona Rio Lawsuit, Kretzer signed a warranty deed transferring the building to La Zona Rio,

listing the “Grantor” as follows: 

WC4th [Rio Grande, LP] a Texas Limited Partnership, 

• By WC4th and Rio Grande GP, LLC, its General Partner

• By World Class Real Estate, its Manager

• By WCCG, its Manager

• By Seth Kretzer, “as the Court-Appointed Receiver for the property of World

Class Capital Group, LLC, pursuant to the court order entered in Cause No.

2019-18855 of the 165th District Court of Harris County Texas” 

The deed stated that the transfer was “in lieu of foreclosure” and in consideration of $10.3

A. Rio Grande LP’s files its second lawsuit against La Zona Rio

Rio Grande, LP, through its retained counsel, Burford Perry, filed a second lawsuit against

La Zona Rio in Travis County—which is the subject of the present appeal—bringing claims of 

quiet title and trespass to try title, and further seeking a declaration that it was the true owner of 

the property. In its petition, which was assigned to a different Travis County judge, Rio Grande, LP

again challenged Kretzer’s authority to act on its behalf in the La Zona Rio Lawsuit, to enter into

2 Both that case and this one were transferred from our sister court in Austin, and we decide the cases in accordance

with the precedent of our sister court to the extent required by TEX. R. APP. P. 41.3. 

3 The turnover statute under which the Receivership Order was issued only provides a receiver the “authority to take

possession of the [judgment debtor’s] nonexempt property, sell it, and pay the proceeds to the judgment creditor to

the extent required to satisfy the judgment.” TEX. CIV. PRAC. & REM. CODE ANN. § 31.002. Kretzer does not address

his receivership authority in the context of this lawsuit—a lawsuit Rio Grande, LP filed against La Zona Rio to assert

its rights to a building in the hands of La Zona Rio per Kretzer’s negotiated settlement agreement with La Zona Rio. 
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the settlement agreement with La Zona Rio, and to sign the deed on its behalf pursuant to that

agreement.

B. Kretzer files a nonsuit seeking dismissal of the second lawsuit

Kretzer thereafter filed a notice of nonsuit, purporting to act in his capacity as the “court

appointed Receiver for World Class Capital Group, LLC, Manager of WC 4th and Rio Grande,

LP, Plaintiff,” asserting that the “Clerk should close the case” and that “[a]ll costs should be taxed

to Plaintiff.”4 In response, Rio Grande, LP, through its retained attorney, filed a withdrawal of

notice of nonsuit, contending that Kretzer was not authorized to act on its behalf in the lawsuit,

and that the notice was filed without Rio Grande, LP’s permission.

C. Rio Grande, LP files its motion to show authority

Rio Grande, LP also filed a motion to show authority pursuant to Rule 12 of the Texas

Rules of Civil Procedure, similarly challenging Kretzer’s authority to act on Rio Grande, LP’s

behalf in the La Zona Rio Lawsuit as well as his authority to act on its behalf in the current lawsuit.

In particular, Rio Grande, LP alleged that Kretzer had no authority to nonsuit its case against

La Zona Rio. Kretzer opposed the motion and portrayed Rio Grande, LP and its general partner,

WC4th and Rio Grande, GP, LLC, as being solely owned and controlled by Natin Paul, who in

turn was the sole member of WCCG, the judgment debtor in the Princeton lawsuit. In fact, Kretzer

asserted that both the current lawsuit and the motion to show authority had been filed by Natin

Paul, and it was another attempt by Paul to “delay secured creditors, obfuscate his corporate

transactions, and collaterally attack final judgments and equity orders of federal and state courts

across Texas.”

4 We note that Kretzer was not appointed as a receiver for “World Class Capital Group, LLC, Manager of WC 4th

and Rio Grande, LP, Plaintiff”; he was appointed as a turnover receiver to collect on the Princeton judgment against

WCCG.
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Kretzer attached various “company agreements” to his opposition, which set forth the

relationships between WCCG, Rio Grande, LP and various other World Class entities, as follows:

1. Natin Paul is the president, sole member, and manager of World Class Capital

Group, LLC.

2. World Class Capital Group, LLC is the sole member and manager of World

Class Real Estate, LLC.

3. World Class Real Estate, LLC is the sole member of WC 4th and Rio Grande

GP, LLC.

4. WC 4th and Rio Grande, LP was created as a partnership between WC 4th and

Rio Grande GP, LLC, as the general partner and three other limited partners.

According to Kretzer, these agreements demonstrated that there was a sufficient relationship

between Natin Paul; WCCG; Rio Grande, LP; and its general partner, WC4th and Rio Grande,

GP, LLC to allow Kretzer to seize control of the La Zona Rio Lawsuit pursuant to his Receivership

Order authority.

In his opposition, Kretzer also argued that Rio Grande, LP’s motion should be denied

because it was not sworn as required by Rule 12 and because Rio Grande, LP’s challenge to his

authority was an impermissible collateral attack on the order. In response, Rio Grande, LP filed an

amended motion to show authority, which included a verification sworn by Rio Grande, LP’s

attorney, Matt Parks, attesting to the facts set forth in the motion. In response, Kretzer argued that

Park’s verification was not sufficient to satisfy the requirements of Rule 12, as the party itself was

required to sign the verification and Parks had not shown he had knowledge of the matters asserted

therein. Kretzer further argued that by signing the verification, Rio Grande, LP’s attorney had

made himself a witness in the case and was thereby disqualified from continuing to serve as the

partnership’s attorney. Kretzer also filed a separate objection to the verification, raising these same
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issues and contending the trial court should either strike the verification or disqualify Parks from

continuing to serve as Rio Grande, LP’s attorney.

The trial court held a hearing on Rio Grande, LP’s motion to show authority and signed an

order striking the verification and denying the motion the same day.

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D. The trial court dismisses Rio Grande, LP’s lawsuit pursuant to Kretzer’s nonsuit

Shortly thereafter, Kretzer filed a “motion for entry of order of dismissal,” again purporting

to act on Rio Grande, LP’s behalf, arguing the nonsuit he had filed was effective immediately upon

its filing, but the trial court had failed to file a formal order dismissing Rio Grande, LP’s suit. In

response, Rio Grande, LP filed a motion to reconsider the denial of its motion to show authority;

to withdraw Kretzer’s nonsuit of the case; and to reinstate the case on the court’s docket, yet again

challenging Kretzer’s authority to act on its behalf in either the La Zona Rio Lawsuit or in the

present litigation. The trial court held a hearing on both motions. After hearing arguments from

the parties, the trial court denied Rio Grande, LP’s motion.

By separate order the same day, the trial court granted Kretzer’s motion for entry of order

of dismissal and ordered the case dismissed with prejudice. Rio Grande, LP thereafter filed its

notice of appeal from the order of dismissal, which was docketed in this court as Cause No. 08-

22-00225-CV.

REMAND OF THE FIRST APPEAL

In the first appeal in Cause No. 22-08-00073-CV, the issue before us was whether the

record supported the trial court’s implied finding that Kretzer had the authority to seize control of

Rio Grande, LP’s first cause of action and enter into the settlement agreement transferring the

5 As La Zona Rio points out, Rio Grande, LP does not appeal from this order, and instead appeals from the order

dismissing its lawsuit. We therefore do not address the propriety of the trial court’s decision to deny that motion.
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partnership’s property to La Zona Rio as part of his collection efforts to satisfy WCCG’s debt. In

our opinion, we concluded that because Rio Grande, LP and its general partner were not parties to

the Princeton lawsuit, Rio Grande, LP had the right, as a stranger to that judgment, to challenge

Kretzer’s enforcement of the Receivership Order against it in the La Zona Rio Lawsuit, and it was

not a collateral attack on the order. But we concluded that the trial court had not properly 

considered Rio Grande, LP’s challenge to Kretzer’s authority, and questions remained regarding

whether he had any such authority under the Receivership Order. We therefore remanded the 

matter to the trial court to give it the opportunity to consider the issue.

As we explained in that opinion, while the record reflected that WCCG; Rio Grande, LP;

and WC4th and Rio Grande, GP, LLC were related or affiliated entities, the only evidence in the

record demonstrated that the three companies were separate and distinct legal entities, entitling

them to the protections afforded under the Texas Business Organizations Code. We further found

that the record did not support a finding that WCCG was a member of Rio Grande, LP’s general

partner—WC4th and Rio Grande, GP, LLC—which would have allowed Kretzer to take over

management of the LLC to reach the partnership’s assets.

Finally, we concluded that there was no evidence in the record from which the trial court

could have impliedly found that WCCG treated Rio Grande, LP or its general partner as alter egos,

such that it would have been proper to allow Kretzer to seize assets belonging to either the

partnership or the general partner to satisfy WCCG’s debt. We therefore remanded the matter to

the trial court for further proceedings consistent with our opinion.

REMAND IN THE PRESENT CASE

Here, Rio Grande, LP continues to assert Kretzer lacked the authority to act on its behalf

in the La Zona Rio Lawsuit. But important to this appeal, Rio Grande, LP also challenges Kretzer’s
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authority to act on its behalf in the current lawsuit, and in particular, to file a nonsuit of its case in

his capacity as the Princeton receiver. Although they are related concepts, our focus here is on the

latter challenge to Kretzer’s authority to file the nonsuit in the present litigation, as the filing of

the nonsuit led to the trial court’s dismissal order, which in turn is the subject of Rio Grande, LP’s

appeal.

As set forth above, the Receivership Order gave Kretzer the authority to seize control of

assets, including causes of action, belonging to judgment debtor WCCG. But as we explained in

our first opinion, to the extent Rio Grande, LP is considered a separate legal entity entitled to the

Texas Business Organizations Code protections, the Receivership Order did not give Kretzer the

authority to seize its partnership property or its causes of action. And in the present case, while

Kretzer has provided more evidence to establish that WCCG and Rio Grande, LP are related—and

that they may even have a parent-subsidiary relationship—he has still not provided any evidence

that would have allowed the trial court to conclude that WCCG treated Rio Grande, LP or its

general partner (Rio Grande, GP, LLC) as alter egos. Similarly, there is no evidence in the record

before us that would have otherwise allowed the trial court to disregard the separate business

structure of each entity and treat them as one and the same as WCCG.

In addition, although Kretzer relied heavily on the provision in the Receivership Order

giving him the authority to take over the management and operation of any LLC in which WCCG

is a member, he has still not produced evidence to establish that WCCG was in fact a member of

Rio Grande, GP, LLC such that he would have been entitled to control Rio Grande, LP’s lawsuits

by taking over management of the LLC. Instead, the evidence that Kretzer himself produced

demonstrates that the only member in Rio Grande, GP, LLC is World Class Real Estate, LLC,

which is two steps removed from WCCG in his organizational chart. And again, Kretzer produced
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no evidence to support a finding that we should disregard the separate business structures of the

various entities to allow Kretzer to treat them as one and the same for purposes of his collection

efforts.

Accordingly, on this record, we do not find support for the trial court’s implied finding that

Kretzer had the authority to nonsuit Rio Grande, LP’s lawsuit against La Zona Rio or the trial

court’s order of dismissal issued pursuant to the filing of the nonsuit. We therefore reverse the trial

court’s decision to dismiss Rio Grande, LP’s lawsuit and remand the matter to the trial court to

reconsider its decision, taking into consideration the factors set forth herein and in our opinion in

Cause No. 22-08-00073-CV.

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CONCLUSION

We reverse the trial court’s order dismissing Rio Grande LP’s lawsuit and remand to the

trial court for further proceedings in accordance with our opinion.

LISA J. SOTO, Justice

March 15, 2024

Before Alley, C.J., Palafox and Soto, JJ. 

Palafox, J. would grant the Motion for Rehearing

6 We note that Kretzer also filed a motion to dismiss this appeal, claiming he alone had the authority to file the appeal

on Rio Grande, LP’s behalf, given his effective takeover of the partnership’s management. As explained in our

companion opinion, however, Kretzer’s motion to dismiss puts the cart before the horse, as the very issue before us is

whether Kretzer had the authority to act on Rio Grande, LP’s behalf in the underlying litigation. And having found

that the record does not support such a finding, we deny the motion as moot.