Court Opinion

ID: 3130041
Source: CourtListenerOpinion
Date Created: 2015-10-16 16:34:20.520578+00
Date Added: 2024-06-11T09:33:39.617718
License: Public Domain

COURT OF APPEALS
                          SECOND DISTRICT OF TEXAS
                               FORT WORTH

                               NO. 2-09-210-CV

ANOCO MARINE INDUSTRIAL, INC.                                       APPELLANT
A/K/A ANOCO MARINE
INDUSTRIES, INC.

                                        V.

PATTON PRODUCTION                                                   APPELLEES
CORPORATION AND J.L.
PATTON, JR.

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           FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY

                                    ------------

                         MEMORANDUM OPINION 1

                                    ------------

      In three issues, appellant Anoco Marine Industrial, Inc. a/k/a Anoco

Marine Industries, Inc. appeals the turnover order that the trial court signed in

favor of appellees Patton Production Corporation and J.L. Patton, Jr.

We reverse and render.

      1
           See Tex. R. App. P. 47.4.
                                Background Facts

      Appellees initially filed a lawsuit to establish that an $81,473.41

promissory note that they had signed in favor of appellant had been fully paid

or was void. In either case, they contended that the collateral that secured the

note—royalties from four gas wells located in Oklahoma—should be returned

to them. 2 Appellees attached the collateral agreement to their original petition;

the agreement said that upon payment of the note in full, appellees would

receive “Return of the Overriding Royalty Interest assignment.”

      After a bench trial, the trial court’s judgment, which was prepared by

appellees’ counsel, said that the note was void and that it was nonetheless paid

in full, and the judgment decreed that “any and all monies held in suspension

by Williams Production Mid-Continent Company or interplead[ed] into the

registry of any court be released to [appellees] within fifteen (15) days.”

However, the trial court’s judgment did not specifically, as appellees had

requested in their petition, order appellant to assign its interest in the gas wells

back to appellees or give appellees a judgment under an unjust enrichment claim

“for sums received and retained by [appellant] in excess of the amount actually

      2
        Appellees’ petition said that as collateral, appellant was to receive “all
overriding royalty interests paid on a monthly basis, directly from the producer,
which in this case was Williams Production Mid-Continent Company.”

                                         2
due and owing them” under the note.          The judgment said, “All relief not

specifically granted is denied.”    Appellant appealed the judgment, and we

affirmed it. See Anoco Marine Indus., Inc. v. Patton Prod. Corp., No.

02-08-00073-CV, 2008 WL 4052927, at *1–3 (Tex. App.—Fort Worth Aug.

29, 2008, no pet.) (mem. op.).

      After numerous attempts to collect on the judgment in Oklahoma failed,

appellees filed an application in the Texas trial court that entered the underlying

judgment for turnover under section 31.002 of the civil practice and remedies

code in an attempt to satisfy the judgment. 3       The application alleged that

Williams Production Mid-Continent Company was the purchaser of gas from the

wells at issue and that, under an interpleader suit, the company had placed

funds from the wells’ production into the registry of a court in Oklahoma.

Appellees contended that the Oklahoma court would not release the funds to

them; thus, they asked the Texas court to order appellant to “turn over all of

[appellant’s] interest in the funds” held in the Oklahoma court’s registry and to

turn over all documents and records relating to title in the gas wells.

      Appellant filed a response to the application, contending in part that the

Oklahoma court had “disbursed to [appellees] the funds ordered released . . .,

      3
           See Tex. Civ. Prac. & Rem. Code Ann. § 31.002 (Vernon 2008).

                                        3
thereby causing the Final Judgment to have been fully paid” and that appellees

had twice been denied the same relief from the Oklahoma court that they

sought in their turnover application from the trial court. After a hearing, the

trial court granted appellees’ turnover application, and in its order, the trial court

required appellant to

         •        turn over its interest in the funds held in the Oklahoma court’s
                  registry to appellees;

         •        turn over its interest in the gas wells, including all interest in future
                  production; and

         •        sign a release within fifteen days to disclaim interest in any funds
                  in the Oklahoma court’s registry and to the gas wells. 4

From that order, appellant filed its notice of appeal.

                    The Propriety of the Trial Court’s Turnover Order

         In three issues, appellant argues that the trial court abused its discretion

because the turnover order (1) was not based on any evidence that supports

the requirements of section 31.002, (2) turned property directly over to a

judgment creditor (appellees) without regard to the satisfaction of an unpaid

money judgment, and (3) determined the property rights of the parties.

         4
              The trial court attached a copy of the proposed release to its turnover
order.

                                               4
      A turnover order is a procedural device by which judgment creditors may

reach assets of a debtor that are otherwise difficult to attach or levy on by

ordinary legal process. Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 224

(Tex. 1991). We review a turnover order for an abuse of discretion. Buller,
806 S.W.2d at 226; Main Place Custom Homes, Inc. v. Honaker, 192 S.W.3d
604, 627 (Tex. App.—Fort Worth 2006, pet. denied); Jones v. Am. Airlines,

Inc., 131 S.W.3d 261, 266 (Tex. App.—Fort Worth 2004, no pet.).

      “A trial court may be reversed for abusing its discretion only when the

court of appeals finds the court acted in an unreasonable or arbitrary manner.

Stated somewhat differently, abuse of discretion occurs when a trial court acts

‘without reference to any guiding rules and principles.’” Buller, 806 S.W.2d at

226 (citation omitted). In the context of turnover orders, a trial court’s decision

will not be overturned, even when it is based on an erroneous conclusion of

law, if the judgment is sustainable for any reason. Id.; Honaker, 192 S.W.3d

at 627. Whether there is sufficient evidence to support the turnover order is

a relevant consideration in determining whether the trial court abused its

discretion. Honaker, 192 S.W.3d at 627; see Jones, 131 S.W.3d at 266.

      Appellant contends in its first issue that the trial court abused its

discretion by signing the turnover order because appellees presented no

evidence of the requisite facts—a judgment creditor who seeks to obtain

                                        5
property to satisfy the judgment, the judgment debtor’s ownership of the

property subject to the turnover, whether the property can be readily attached,

and whether the property is exempt. See Davis v. West, No. 01-08-01006-CV,

2009 WL 5174184, at *5 (Tex. App.—Houston [1st Dist.] Dec. 31, 2009, no

pet. h.); Tanner v. McCarthy, 274 S.W.3d 311, 322 (Tex. App.—Houston [1st

Dist.] 2008, no pet.); Honaker, 192 S.W.3d at 627–28. Appellees respond by

arguing that section 31.002 “does not contain a specific evidentiary

requirement.”

      However, “[s]ection 31.002 authorizes a turnover order only upon proof

of the necessary facts.” Honaker, 192 S.W.3d at 628 (holding that the trial

court erred by ordering a turnover under section 31.002 because there was no

evidence of some of the facts required by that section); see Tanner, 274
S.W.3d at 322–23 (holding the same and describing the language of section

31.002(a) as a “fundamental” and “preliminary” requirement of the turnover

remedy); Clayton v. Wisener, 169 S.W.3d 682, 684 (Tex. App.—Tyler 2005,

no pet.) (holding that a trial court abused its discretion by signing a turnover

order because the applicant presented only the motion and argument to the

court, which was not evidence of section 31.002‘s requirements).         By its

explicit terms, section 31.002 requires an outstanding, unsatisfied judgment as

the basis for a turnover order:

                                       6
               (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.

Tex. Civ. Prac. & Rem. Code Ann. § 31.002(a) (emphasis added); see In re

C.H.C., 290 S.W.3d 929, 931 (Tex. App.—Dallas 2009, no pet.) (noting that

the purpose of section 31.002 is for “court-ordered collection of judgments”);

Dale v. Fin. Am. Corp., 929 S.W.2d 495, 497–98 (Tex. App.—Fort Worth

1996, writ denied) (explaining generally that section 31.002 applies to

judgment creditors and judgment debtors); see also Pandozy v. Beaty, 254
S.W.3d 613, 617 (Tex. App.—Texarkana 2008, no pet.) (“[O]nce the judgment

was paid, the turnover order lost its teeth and was of no further force and

effect. Issues concerning the validity of the dead and then-unenforceable order

became immediately moot when the judgment which it was issued to enforce

was satisfied.”).

         While trial courts may take judicial notice of their own judgments,

evidence is still required to prove the remaining requirements for a turnover

order.    Appellees did not prove that any part of the trial court’s judgment

                                         7
remains unsatisfied.    Specifically, they did not show that at the time the

turnover order was signed, there was any unreleased money that had been

“held in suspension” or “interplead[ed] into the registry of any court” at the

time of the trial court’s judgment. Appellees also did not show that attorney’s

fees, court costs, or postjudgment interest, which were also awarded by the

trial court’s judgment, were unpaid.

      Instead, evidence presented by appellant shows that the Oklahoma court

released the funds that were in its registry as of December 13, 2007—which

was the date of the trial court’s judgment in this case—but that the Oklahoma

court did not release money that was in that court’s registry after December

13. The trial court’s judgment does not state that money held in suspension

by Williams Production Mid-Continent Company or placed in a court’s registry

in the future should be released to appellees. 5 When a judgment is

unambiguous, we must adhere to the literal language used within it; we may

      5
         During the hearing on appellees’ turnover order application and before
signing the turnover order, the trial court initially recognized the judgment’s
inability to give the appellees their requested relief by telling appellees’ counsel,

             I’m afraid a second lawsuit is going to be necessary, Mr.
      DeShazo. I tend to agree that the way this judgment is drafted
      right now, that it speaks in terms of all the funds held in the
      registry, and it’s not drafted to say future funds held in the registry,
      and it does not say that they were assigned.

                                         8
interpret a judgment through the context of the record only when it is

ambiguous.6 See Hagen v. Hagen, 282 S.W.3d 899, 901 (Tex. 2009); Shanks

v. Treadway, 110 S.W.3d 444, 447 (Tex. 2003).

      For these reasons, appellees did not present sufficient evidence of an

unsatisfied judgment, which is one of the of the “necessary facts” under

section 31.002; therefore, we hold that the trial court abused its discretion by

signing the turnover order and sustain appellant’s first issue. See Tex. Civ.

Prac. & Rem. Code Ann. § 31.002(a); Honaker, 192 S.W.3d at 627–28.

Because we sustain appellant’s first issue and hold that the turnover order was

inappropriate, we decline to address appellant’s second and third issues, which

also attack the propriety of the turnover order. See Tex. R. App. P. 47.1;

Hawkins v. Walker, 233 S.W.3d 380, 395 n.47 (Tex. App.—Fort Worth 2007,

pet. denied).

      6
       The parties have not contended that the trial court’s judgment is
ambiguous.

                                       9
                                 Conclusion

     Having sustained appellant’s dispositive issue, we reverse the turnover

order that the trial court signed on June 25, 2009, and render a take-nothing

judgment in this turnover proceeding. See Tex. R. App. P. 43.2(c); Ross v.

Nat’l Ctr. for the Employment of the Disabled, 201 S.W.3d 694, 695 (Tex.

2006); Clayton, 169 S.W.3d at 684.

                                          TERRIE LIVINGSTON
                                          JUSTICE

PANEL: LIVINGSTON, DAUPHINOT, and GARDNER, JJ.

DELIVERED: April 8, 2010

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