Opinion ID: 6107989
Heading Depth: 2
Heading Rank: 1

Heading: The Trial Court's Merits Determinations

Text: Since the Turnover Order listed the disputed portion of the funds among Kingwood's assets, the court of appeals imferred that the trial court determined Kingwood owned the funds. Although the court of appeals viewed the Turnover Order as unambiguously indicating Kingwood owned the funds, such a conclusion is refuted by the Turnover Order's statement that ordering the disputed half of the funds into the court's registry was without prejudice to any right of either CPChem or ADJT to seek the release of the $494,427.32 to be held initially in the Court's Registry. We also cannot reasonably construe the trial court's oral statements at the hearing as expressing a present intent to render judgment on ADJT's plea in intervention when the judge's remarks included statements like: • Motion to Strike Intervention, let me just tell you what I think -what I'm going to do and what I think the law is and that's why I'm going to do it ....; • [T]he Motion to Strike Intervention is denied. However, I'm going to deny any relief in the intervention .... (emphasis added). While the trial judge said I'm going to order [the funds] to be held in the registry of the Court ... pending appeal, his lack of a present intent to resolve the dispute is demonstrated by his subsequent request for a judgment that brings finality to the issues and continuously saying what he was going to do. 31 For these reasons, when the trial court signed the Turnover  Order, the court had never finally adjudicated the parties' competing claims to the funds. The Turnover Order also did nothing to dispose of ADJT's intervention and request for a declaration pertaining to its rights to the disputed funds. Ordering the funds into the registry of the court pending appeal and without prejudice to any right of either claimant does not reflect a ruling on who is entitled to the funds. It does precisely the opposite. 32 If the Turnover Order did not impede ADJT's rights to seek release of the funds at a later date, then the order implicitly reflects that it did not determine the parties' ownership dispute. And it is worth noting that there was never a separate, initial proceeding adjudicating ADJT's claims. 33 Rather, the only judgment or order that ever expressly spoke to ADJT's plea in intervention or ownership assertions is the Release Order, which expressly denied the relief ADJT sought. Moreover, the trial court's entry of the Release Order reflects that it too believed the claims were still pending before it. The court of appeals' analysis also runs counter to precedent that regards turnover proceedings as being limited to their purely procedural nature and, thus, bars use of the turnover statute to determine parties' and non-judgment debtors' substantive rights. 34 To conclude the Turnover Order made a substantive determination regarding ownership of the funds would deprive existing precedent of any weight it might merit. If trial courts are in fact precluded from ruling upon the substantive rights of parties to the judgment sought to be enforced, it defies logic to hold the same court is empowered to determine the rights of complete strangers to the underlying judgment it is enforcing in that very proceeding. 35 To this end, the court of appeals' opinion contravenes this Court's precedent and the often-recited rule limiting the scope of turnover proceedings.  Admittedly, however, in 1991, this Court issued conflicting opinions that have caused much confusion in this area and have blurred the contours that once clearly defined the permissible scope of turnover proceedings. 36 Accordingly, courts are troubled by: (1) how to resolve competing substantive claims to property sought in a turnover application if the turnover proceedings is truly a purely procedural mechanism, and (2) the extent to which a turnover order can affect the rights of non-judgment debtors. 37 CPChem's only  substantive argument on this point is that since AJDT intervened, it voluntarily injected its claims into the turnover proceeding, thus, opening the door to their adjudication. Although some opinions view intervention as a proper method for a third party to protect its rights in a turnover proceeding, none go as far as holding that intervention enables a court to adjudicate third-party rights in what is otherwise a purely procedural device. 38 The court of appeals and CPChem both rely on Cre8 to support this position. There the court recognized turnover proceedings cannot adjudicate third-party rights but held a third party was bound by the decision since it voluntarily injected itself into the proceedings by intervening. 39 Yet the court of appeals cited no legal authority for that proposition and goes on to discuss preservation of error. 40 And the turnover statute has no provision conferring authority on trial courts to decide the substantive rights of the parties properly before it in a turnover proceeding, let alone the rights of strangers to the underlying judgment. The opinion does not explain how a third party's consent via a plea in intervention suddenly confers such authority. CPChem's contention is further weakened by looking at the two other cases it relies on. The court of appeals in In re deShetler supports this intervention exception by citing Cre8 and its earlier opinion in this very case now before the Court. 41 And in deShetler , the court stated a trial court cannot decide substantive issues in a turnover order and turnover orders cannot issue against an intervenor when substantive rights must be decided. 42 Instead, it stated a turnover order can only issue after a court holds separate proceedings. 43 It reasoned that the turnover order at issue here was valid since ADJT presented arguments to the trial court, even though it goes on to invalidate the turnover order in deShetler because it was not supported by a final judgment despite the fact the intervenor's attorney was allowed to make arguments there as well. 44 Its reasoning, and CPChem's reliance on it, seem contradictory for this reason. Moreover, the other case CPChem relies on also only cites Cre8 to support the proposition that a non-judgment debtor cannot complain that their substantive rights were decided in a  turnover proceeding if they intervened. 45 Therefore, this appears to be a novel exception in the turnover proceeding context. However, the absence of any other judgment regarding ADJT's claims, in addition to our conclusion that the trial court's order does not reflect a decision on ADJT's substantive claims, is dispositive as to whether a court has ever determined ADJT's ownership claims. Therefore, because it is clear no such ruling exists in this case, we need not delineate the appropriate mechanism for resolving competing substantive claims to property sought in a turnover application.