Petition for Review - TAMES Search

FILED 17-0524 6/30/2017 4:29 PM tex-17975707 SUPREME COURT OF TEXAS BLAKE A. HAWTHORNE, CLERK

Oral Argument Requested

No. 17-______ _____________________________________________________________ IN THE SUPREME COURT OF TEXAS _____________________________________________________________ JENNIFER MITCHELL and TCSM, LLC, Petitioners, v. TURBINE RESOURCES UNLIMITED, INC. Respondent. _____________________________________________________________ On Petition For Review From The Fourteenth Court of Appeals At Houston, Texas Cause No. 14-15-00417-CV _____________________________________________________________ MITCHELL’S and TCSM’S PETITION FOR REVIEW _____________________________________________________________ W. Joel Bryant State Bar no. 03277975 P.O. Box 53587 Houston, Texas 77052 (713) 227-7377 (713) 227-7977 (Facsimile) ATTORNEY FOR PETITIONERS JENNIFER MITCHELL and TCSM, LLC ____________________________________________________________


_____________________________________________________________ LIST OF PARTIES AND COUNSEL _____________________________________________________________

Petitioners (Appellants below):

Petitioners’ Appellate Counsel:

Jennifer Mitchell (“Mitchell”) TCSM, LLC

Bryant Law W. Joel Bryant [email protected] T. Kyle Bryant [email protected] P.O. Box 53587 Houston, Texas 77052

Respondent (Plaintiff/Appellee below):

Respondent’s Trial Counsel: Brendetta Scott Hoover Slovacek 5051 Westheimer, Ste. 1200 Houston, Texas 77056 (713) 977-5395 (f) [email protected]

Turbine Resources Unlimited, Inc.

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_____________________________________________________________ TABLE OF CONTENTS _____________________________________________________________ LIST OF PARTIES AND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ISSUES PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SUMMARY OF THE ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARGUMENTS AND AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 I.

Why the Petition Should Be Granted. . . . . . . . . . . . . . . . . . . . . . . . …. . .9

II.

A Trial Court Cannot Adjudicate Property Rights of Third Parties in a Post–Judgment Turnover Proceeding. . . . . . . . . . . . . . . . . . . . . . . . . . . .10 A. When a Trial Court’s Plenary Jurisdiction Has Expired, There is no Jurisdiction to Add New Parties. . . . . . . . . . . . . . . . . . . . . . . . . . ..…10 B. Determination Of Third Parties’ Rights Exceeds the Scope of the Turnover Statute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ….12 C. Due Process Forbids the Court From Adjudicating Property Rights Before Serving a Defendant, Filing Pleadings, or Having a Trial. . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …….15

III.

A Void Order is not Capable of Being Reformed or Cured. . . . . . . ……17

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A.

Voluntary Appearance in a Case does Not Cure Prior Jurisdictional Defects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ……………. .18

B.

An Evidentiary Hearing is Not a Substitute for a Trial . . . . . ….. .18

RELIEF REQUESTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. …. 19 CERTIFICATE OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …. .20 ____________________________________________________________ TABLE OF AUTHORITIES _____________________________________________________________ Cases

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AVCO Corp. v. Interstate Sw. Ltd., 145 S.W.3d 257 (Tex. App.—Houston [14th Dist.] 2004, no pet.) ………………………………………………………………14 Bank One, N.A. v. Wohlfahrt, 193 S.W.3d 190 (Tex. App.—Houston [14th Dist.] 2006, no pet.) ………………….……….………….……………………………...10 Bay City Plastics, Inc. v. McEntire, 106 S.W.3d 321 (Tex. App––Houston [1st Dist.] 2003) .......................................................................................................12 Beaumont Bank, NA v. Buller, 806 S.W.2d 223 (Tex. 1991) ...................................11 Bolloré v. Import Warehouse, Inc., 448 F.3d 317 (5th Cir. 2006) ............................13 Browning v. Prostok, 156 S.W.3d 336 (Tex. 2005)..................................................22 Cravens, Dargan & Co. v. Peyton L. Travers Co., Inc., 770 S.W.2d 573 (Tex. App––Houston [1st Dist.] 1989, writ denied……………………………12, 14 Cunningham v. Parkdale Bank, 660 S.W.2d 810 (Tex. 1983)…………………….17 Custom Corporates, Inc. v. Security Storage, Inc., 207 S.W.3d 835 (Tex. App––Houston [14th Dist.] 2006) ...........................................................................10 Elgohary v. Herrera Partners L.P., No. 01-13-00193-CV, 1st Court of Appeals (June 5, 2014) ....................................................................................................12, 13 Ex Parte Swate, 922 S.W.2d 122 (Tex. 1996) ......................................................... 12 Google, Inc. v. Expunction Order, 441 S.W.3d 644 (Tex. App––Houston [1st Dist.] 2014) ...........................................................................................14, 15, 17 Felhaber v. Felhaber, 681 F.2d 1015, 1027 (5th Cir. 1982) ....................................14 In re Bokeloh, 21 S.W.3d 784 (Tex. App.—Houston [14th Dist.] 2000, orig. proceeding) ........................................................................................................16, 17

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Kieschnick & Co. v. Johnston, 892 S.W.2d 435 (Tex. App.—San Antonio, 1994, no writ)……………………………………………………………………………… 12 Maiz v. Verani, 311 F.3d 334 (5th Cir. 2002) ...........................................................13 PNS Stores, Inc. v. Rivera, 379 S.W.3d 267 (Tex. 2012) ......................................... 14 Republic Ins. Co. v. Millard, 825 S.W.2d 780, 783 (Tex. App.—Houston [14th Dist.] 1992, orig. proceeding)……………………………………………………..12 Sharpe v. Roman Catholic Diocese of Dallas, No. 05-99-01614-CV, 2001 WL 15974 (Tex. App.—Dallas Jan. 9, 2001, orig. proceeding).………………………10 United Bank Metro v. Plains Overseas Group, Inc., 670 S.W.2d 281, 284 (Tex. App.—Houston [1st Dist.] 1983, no writ) ………………………………..12, 13, 15 Constitutions, Statutes, & Rules

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TEX. CIV. PRAC. & REM. CODE § 31.002(b) …………………………………11 TEX. GOV’T CODE §§ 22.001(a)(2), (6)…………………………………………2 TEX. R. CIV. P. 124……………………………………………………………… 14 TEX. R. CIV. P. 308 ………………………………………………………………. 9 TEX. R. CIV. P. 329b……….………………………………………………………9 TEX. R. CIV. P. 329b(c), (e), & (g) ……………………………………………..…9 TEX. R. CIV. P. 621(a)……………………………………………………………10

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_____________________________________________________________ STATEMENT OF THE CASE _____________________________________________________________ This is a post-judgment turnover/receivership proceeding that attached property of third parties. Mitchell and TCSM, LLC challenge several orders signed by Hon. Alfred H. Bennett (presiding until April 2015), and Hon. John T. Wooldrige (sitting) in the 61st Judicial District, Harris County, Texas. Judge John T. Wooldrige signed an order on September 24, 2014 authorizing the Receiver to sell assets belonging to Mitchell and TCSM. On April 14, 2015, Judge Bennett denied Mitchell’s motion to modify those orders authorizing the sale. And on June 2, 2015, Judge Brent Gamble (sitting) signed an order approving the sale of the Mitchell and TCSM property. Mitchell and TCSM, LLC appealed the several orders to the Fourteenth Court of Appeals at Houston, Texas (Justices Jamison, Busby, and Wise, sitting). Justice Busby wrote the court’s opinion which affirmed the trial court orders on March 30, 2017. The opinion is filed as Mitchell, et al. v. Turbine Resources Unlimited, Inc., No. 14-1500417—CV,

_________________ WL (Tex. App.—

Houston [14th Dist.], March 30, 2017).

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_____________________________________________________________ STATEMENT OF JURISDICTION _____________________________________________________________ This Court has jurisdiction pursuant to Tex. Gov’t Code § 22.001(a) (2) because the court of appeal’s decision is inconsistent with decisions of the supreme court and other courts of appeal on questions of law material to the decision in this case. Furthermore, this Court has jurisdiction under Tex. Gov’t Code § 22.001(a)(6) because the court of appeals has committed an error of law of such importance to the jurisprudence of this State that it should be corrected. _____________________________________________________________ ISSUES PRESENTED _____________________________________________________________ Issue No. 1: Can due process (jurisdictional) defects be “cured” to validate a void order post facto? Issue No. 2: What are the due process limitations on a trial court’s authority to enforce its judgments (under Tex. R.Civ. Pro. 308) when addressing third parties and their property (after expiration of plenary jurisdiction) through turnover? Issue No. 3: Does a simple evidentiary hearing satisfy the due process and statutory right to a trial?

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_____________________________________________________________ STATEMENT OF FACTS _____________________________________________________________ The opinion of the court of appeals, for the most part, fairly recounts the procedural history of the case and the allegations of the respective parties. Petitioners dispute any adoption of those allegations (including findings contained in the Master’s Reports) as binding on Petitioners or as valid findings of fact in the case below. In 2004, Turbine Resources Unlimited, Inc. sued Defendants Tom George and International A, Inc. for breach of contract and payment on a sale of equipment. C.R. at 5. Plaintiff Turbine Resources Unlimited, Inc. secured a judgment against Defendants on February 2, 2006. C.R. at 31. The judgment was never challenged or otherwise appealed by Defendants. The trial court appointed Riecke Baumann as Receiver and Special Master for enforcing the judgment. C.R. at 76. The order authorized the Receiver/Master to conduct a wide range of activities and endowed the Receiver/Master with broad authority to enforce the judgment and collect assets from the judgment debtor for satisfaction of the judgment. C.R. at 77–81, 84–87. The Receiver/Master filed several Master’s Reports that contained findings of facts and conclusions of law intended to be conclusive, adjudicative determinations of property rights to support the Receiver’s attachment of such

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property for disposition and satisfaction of the judgment. C.R. at 108–122, 143– 157, 190–204. The trial court ultimately adopted the Master’s Reports as court orders. C.R. at 126, 143, 314. In those reports, the Receiver/Master issued findings that Jennifer Mitchell and Tom George are married and that all property owned by Jennifer Mitchell is community property subject to the receivership. C.R. at 114, 273–274, 298. The Master also issued findings declaring that TCSM, LLC is not a separate legal entity, but is an alter-ego or sole proprietorship of judgment debtor Tom George. C.R. at 108, 114, 116, 145, 148–150. The Master further declared that business inventory owned by TCSM, LLC is actually property owned by the judgment debtor and is automatically subject to the receivership and turnover. C.R. at 113, 115, 116, 148–150, 155–156. The Master also found that personal property owned by Jennifer Mitchell is property owned by and subject to the control of judgment debtor and is therefore part of the receivership and turnover order. C.R. at 116, 297–299, 358–359. All those findings were made without prior notice to Mitchell or TCSM, LLC. With the Master’s Reports as his authority, the Receiver proceeded to attach, seize, and sell inventory of TCSM, LLC and automobiles belonging to Jennifer Mitchell. C.R. at 104–105, 141–142. On September 24, 2014, the Court signed an order authorizing the Receiver to sell property belonging to Petitioners. C.R. a 141. In response to these actions, Jennifer Mitchell engaged counsel and filed a Motion

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to Modify the Court order (and numerous other pleadings) and pointed out that several items included in the Court’s order authorizing sale were items belonging to Petitioner, not the judgment debtor. C.R. at 127, 158–188, 210–225, 279–296, 300–305, 315–322, 326–330. The Receiver/Master responded by arguing that the Master’s Reports were settled issues and conclusive as to Ms. Mitchell and TCSM, LLC. C.R. at 205, 297–299. On March 30, 2015, Jennifer Mitchell formally filed a Plea in Intervention to ensure that she had standing before the court to raise these issues, since all prior relief had been denied. On that day, the court also conducted a hearing on Jennifer Mitchell’s various motions objecting to the September 24, 2014 order. 2 R.R. at 1, et. seq. In the course of the hearing, Jennifer Mitchell introduced uncontroverted evidence that the 2009 Bentley and the 2011 Ford Expedition were her personal property and not property of the judgment debtor’s. 2 R.R. at 5–16. Ms. Mitchell also introduced uncontroverted evidence that appellant TCSM, LLC is owned by her alone and not by judgment debtors. 2 R.R. at 16–18, 23–24, 32. At the hearing, the judge announced that he would deny Mitchell and TCSM’s various motions seeking to remove their property from the receivership and turnover order. 2 R.R. at 36. The Court signed its order on April 14, 2015. C.R. at 334. On June 2, 2015, the Court signed an order approving the sale of Mitchell’s and TCSM’s property. Fourth Supp. CR at 4. Mitchell and TCSM, LLC perfected their appeal of the various orders. On appeal, the Fourteenth Court of Appeals

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affirmed the trial court’s orders. Throughout the entirety of these proceedings, neither TCSM, LLC nor Jennifer Mitchell have been sued, cited, or served with legal process prior to adverse rulings being issued against them. _____________________________________________________________ SUMMARY OF THE ARGUMENT _____________________________________________________________ After a trial court’s plenary jurisdiction has expired, it cannot modify the judgment or add new parties to the case. By ordering turnover and sale of Petitioners’ property, the court has created or imposed liability in a way the original judgment did not; accordingly, the trial court had no jurisdiction to enter the orders. A receivership/turnover order is a procedural tool created to aide a court in collecting a judgment against a judgment debtor. However, a receivership may not be used to determine the substantive rights of third parties; a separate trial is required. Issues such as ownership of disputed property and alter-ego status are substantive issues that require separate legal proceedings, and a trial court cannot resolve such issues in a turnover proceeding. The trial court exceeded the scope of the turnover statute by determining that property of third parties belong to the receivership and that TCSM, LLC was the alter-ego of the judgment debtor. Due process requires that a party be served with process and receive notice of an action to which it is an interested party; otherwise, the court never acquires jurisdiction over a person or its property. The trial court entered orders adversely

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adjudicating Petitioners’ property rights without affording Petitioners notice. The judgment creditor never sought relief from Petitioners; it never sued Petitioners; it never cited Petitioners; it never served Petitioners. The court orders adjudicating property rights of Petitioners violated due process and are therefore void. The court of appeals acknowledged that the trial court orders adjudicating Petitioners’ property rights did not bind Petitioners; notwithstanding, the court of appeals ultimately upheld the orders that effectively disposed of their property. The orders did not bind Petitioners because the orders were void. Void orders are eternally defective for lack of jurisdiction, especially when there is a complete lack of service in violation of due process. The court of appeals affirmed the validity of void orders, concluding that Petitioners’ subsequent intervention in the postjudgment receivership established jurisdiction. However, intervention cannot cure due process deficiencies post facto. The court of appeals also disregarded Petitioners’ complaint about lack of an opportunity to dispute the findings. It referenced a hearing on Petitioners’ motion to set aside a previous order, saying that Petitioners had an opportunity to present their claims; however, a simple hearing does not satisfy Petitioners’ right to trial on their property issues. Trials provide parties with notice of claims and give them opportunity to raise defenses and conduct discovery. Furthermore, trials follow rules of pleading and proof with proper allocations of burdens of proof. The

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evidentiary hearing cited by the court of appeals did not satisfy Petitioners’ due process and statutory rights to trial on those property issues. _____________________________________________________________ ARGUMENTS AND AUTHORITIES _____________________________________________________________ I.

Why This Petition Should Be Granted Unless the Supreme Court addresses the errors in the courts below, this case

will create new powers for post-judgement receivers and masters to attach the property of third parties without any recourse or safeguards for the third parties. Unchallenged, the receiver/master secured court orders that adjudicated the property rights of third parties. Although the trial court has continuing authority to enforce its judgements, it does not have the authority to reach beyond the property owned by the judgment debtor. Here, the receiver/master has unilaterally decreed that the Petitioners’ property belongs to the Debtor without affording the Petitioners an opportunity to challenge the rulings. If successful, this scheme surely will be adopted by receivers and masters to expand the pool of assets available to satisfy judgments; and they will do so with impunity. This Court needs to put definite, clear limits on the scope and breadth of receivership remedies. Otherwise, the court will have taken Petitioners’ property without just compensation or due process of law.

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Although the law seems to be clear that adjudicating property rights of third parties is beyond the scope of turnover statute, the trial court has done so nonetheless. The court of appeals has blithely stated that trial courts have jurisdiction to enforce their judgments; however, the court of appeals has ignored the fact that the enforcement is against third parties. Somehow, the trial court and court of appeals have ignored the essence of the trial court’s rulings; that is, they have ignored the fact that the rulings have de facto attached property of third parties without affording them due process. The result is that the trial court and the court of appeals have made determinations of law that directly contradict decisions of the Supreme Court and other courts of appeal on this issue. Such error of law is important to the jurisprudence of this state and should be corrected. II. A Trial Court Cannot Adjudicate Property Rights of Third Parties in a Post–Judgment Turnover Proceeding A. When a Trial Court’s Plenary Jurisdiction Has Expired, There is no Jurisdiction to Add New Parties. Generally, a trial court retains plenary power over its judgments for a minimum of thirty days. Tex. R. Civ. P. 329b. In some cases, plenary power jurisdiction may extend for up to seventy-five additional days. Tex. R. Civ. P. 329b(c), (e), & (g). Once its plenary power has expired, however, the trial court may take only limited actions with respect to its judgments, such as judgment enforcement and supervision of post-judgment discovery. See Tex. R. Civ. P. 308

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and 621a. But “the trial court may not . . . issue an order that is inconsistent with the original judgment or that otherwise constitutes ‘a material change in the substantive adjudicative portions of the judgment.’” Custom Corporates, Inc. v. Security Storage, Inc., 207 S.W.3d 835, 839 (Tex. App.—Houston [14th Dist.] 2006, no pet.); Bank One, N.A. v. Wohlfahrt, 193 S.W.3d 190, 194–95 (Tex. App.— Houston [1st Dist.] 2006, no pet. h.) (“enforcement orders may not be inconsistent with the original judgment and may not constitute a material change in substantial adjudicated portions of the judgment.”). Post-judgment orders may not impose obligations in addition to the obligations imposed by the final judgment. Custom Corporates, Inc., 207 S.W.3d at 839. This is especially true when such orders purport to adjudicate the rights of non-parties. See Sharpe v. Roman Catholic Diocese of Dallas, No. 05-99-01614-CV, 2001 WL 15974, at *3 (Tex. App.— Dallas Jan. 9, 2001, orig. proceeding) (“inherent judicial powers do not include the authority to make substantive rulings on controversies between parties in the absence of pleadings invoking the court’s jurisdiction.”) (not designated for publication). More importantly, however, a trial court cannot “create or impose liability” in a way the original judgment did not. Custom Corporates, Inc., 207 S.W. 3d at 840. Here, the trial court (through the Receiver’s actions) has done what is forbidden: determine a dispute between a litigant and a non-party without pleadings or other legal basis for relief. These orders effectively added Mitchell

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and TCSM, LLC into the receivership, which the original judgment did not contemplate. While the Receiver may have conducted an investigation into the ownership of various items of property, the trial court cannot issue orders that broaden the scope of the original judgment once its plenary power has expired. In short, there is no legal basis for the trial court to order the sale of Petitioners’ property when they were not party to the original judgment. Therefore, the multiple orders1 issued by the trial court that expose the property of Appellants to the underlying judgment are void and should be vacated by this Court. B. Determination Of Third Parties’ Rights Exceeds the Scope of the Turnover Statute The Texas Turnover Statute authorizes a trial court to take various steps against a judgment debtor that would aid the court in collecting a judgment. One of the steps the trial court may take is to appoint a receiver over the judgment debtor’s property and order the judgment debtor to turn over all non-exempt property in the debtor’s possession or control. See Tex. Civ. Prac. & Rem. Code § 31.002(b). It is, however, a purely procedural mechanism and does not apply to non-judgment debtors. Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 227 (Tex. 1991). Therefore “a turnover order cannot be used as a shortcut to avoid judicial proceedings necessary to provide third parties due process in adjudicating their 1

On September 24, 2014, the trial court issued an order allowing sale of TCSM, LLC and Jennifer Mitchell’s property. Neither Mitchell nor TCSM, LLC were cited or served before the order was issued. On April 14, 2015, the trial court denied Petitioners’ motion to remove TCSM, LLC and Jennifer Mitchell’s property from the receivership (stemming from the September 24 order). And on June 2, 2015, the trial court signed an order approving sale of TCSM, LLC’s inventory.

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substantive rights.” Elgohary v. Herrera Partners, L.P., No. 01-13-00193-CV (Tex. App.—Houston [1st Dist.] 2014) (mem. op.) (citing Ex parte Swate, 922 S.W.2d 122, 125 (Tex. 1996) (J. Gonzalez, concurring)). See, e.g., Kieschnick & Co. v. Johnston, 892 S.W.2d 435, 439 (Tex. App.—San Antonio, 1994, no writ) (reversing judgment against partners when underlying judgment involved corporation, holding that it was improper to issue order against non-judgment debtor); Republic Ins. Co. v. Millard, 825 S.W.2d 780, 783 (Tex. App. —Houston [14th Dist.] 1992, orig. proceeding) (trial court abused its discretion by including debtor’s insurance company in turnover order); Cravens, Dargan, & Co. v. Peyton L. Travers Co., 770 S.W.2d 573, 576–77 (Tex. App.—Houston [1st Dist.] 1989, writ denied) (turnover statute could not be used as a procedural tool against State Board of Insurance to reach debtor’s financial-responsibility deposit with that agency); United Bank Metro v. Plains Overseas Group, Inc., 670 S.W.2d 281, 284 (Tex. App.—Houston [1st Dist.] 1983, no writ) (creditor was not entitled to turnover order against corporation until creditor successfully pierced corporate veil in separate proceeding). Ownership of disputed property and alter-ego status are substantive issues that require separate judicial proceedings. See Elgohary, mem. op. at 3; see also Cravens, Dargan, & Co., 770 S.W.2d at 56–57 (“As the turnover statute is purely a procedural tool it is not a device through which we can determine ownership of the disputed funds.”); Bay City Plastics, Inc. v. McEntire, 106 S.W.3d 321, 325 (Tex.

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App.—Houston [1st Dist.] 2003, pet. denied) (“This Court has previously held that the turnover statute is not a device through which we can determine ownership of property.”); United Bank Metro, Inc., 670 S.W.2d at 284 (“Although neither [party from whom turnover was sought] are judgment debtors, the appellant argues that they should be treated as judgment debtors, since they are merely alter egos of [the] judgment debtor[s]. This argument would permit the appellant to skip the trial on the merits in this case with respect to the alter ego issue and declare itself the winner.”). As such, “any issues of successor liability, alter ego, or ownership of disputed property should not be resolved in a turnover proceeding.” Elgohary, mem. op. at 3 (emphasis added). Texas courts construing the turnover statute have consistently held that “proceedings pursuant to the turnover statute may not be used to determine the substantive property rights of the judgment debtors or of third parties.” Maiz v. Virani, 311 F. 3d 334, 343–45 (5th Cir. 2002) (court may not use a turnover proceeding to adjudicate whether a corporation is an individual judgment debtor’s alter ego). Specifically, “Texas courts have held that a turnover proceeding is not an appropriate vehicle through which to make an alter ego determination and that a separate trial on the merits of that issue is required before the alter ego can be subject to a turnover proceeding.” Bolloré S.A. v. Import Warehouse, Inc., 448 F.3d 317 (5th Cir. 2006) (citing United Bank Metro, 670 S.W.2d at 283).

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C. Due Process Restrains the Court From Adjudicating Property Rights Before Serving a Defendant, Filing Pleadings, or Having a Trial Constitutional due process requires that interested parties be served with process and receive notice of an action before a judgment or order may be rendered against them. See Fehlhaber v. Fehlhaber, 681 F.2d 1015, 1027 (5th Cir. 1982). A judgment rendered in violation of due process is void for lack of jurisdiction. PNS Stores, Inc. v. Rivera, 379 S.W.3d 267, 273 (Tex. 2012) (holding jurisdictional defect voids judgment when defect “exposes such personal jurisdictional deficiencies as to violate due process); Google, Inc. v. Expunction Order, 441 S.W. 3d 644, 645 (Tex. App.—Houston [1st Dist.] 2014, no pet.). Moreover, it is a basic rule that “before a court can affect a person’s interest in in personam litigation, that person must either be a party to the litigation before the court or in privity to a party in litigation before the court.” AVCO Corp. v. Interstate Sw. Ltd., 145 S.W.3d 257, 263 (Tex. App.—Houston [14th Dist.] 2004, no pet.); see also Tex. R. Civ. P. 124 (requiring service, acceptance or waiver of process, or appearance before a judgment can be rendered against a party). In Google, the trial court signed an expunction order that required Google (among others) to take certain action, even though Google was not (and never had been) a party to the suit. Google, 441 S.W.3d at 646. Google immediately appealed the expunction order, claiming that it violated Google’s due process rights as a non-party. In vacating the trial court’s order, the court of appeals noted that “it is

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clear from the record that Google was never named as a party to the suit, was never served with process, never waived or accepted process, and never made an appearance in the suit before the expunction order was entered.” Id. at 647. Accordingly, this Court held that Google was not a party to the suit and that the trial court lacked jurisdiction to enter the order against Google. Id. Similarly, in this case, the trial court lacked jurisdiction to enter orders that adversely affected Petitioners. On September 24, 2014, the trial court entered an order that required Petitioners Jennifer Mitchell and TCSM, LLC to surrender TCSM inventory and certain automobiles owned by Jennifer Mitchell to the receivership. C.R. at 141. This order issued before Petitioners were served with process or made an appearance in the case; therefore, it is void as to Petitioners. See Google, 441 S.W.3d at 647. And when Petitioners sought to remove Mitchell and TCSM, LLC’s property from the receivership, the trial court denied their request. 2 R.R. at 36. The trial court’s order of June 2, 2015 (approving the sale of TCSM, LLC’s inventory) relied on adverse findings in the Master’s Reports (and adopted by the court) that purported to adjudicate TCSM’s property rights. Petitioners, however, were not “named as a party, . . . never served with process, never waived or accepted process, and never made an appearance” before the trial court issued the orders adopting the Master’s Reports, which adversely affected their interests. Therefore, they are void as to Petitioners. See Google, 441 S.W.3d at 647.

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The trial court’s orders—in connection with the Receiver’s actions—have severely affected Petitioners’ property rights, yet the trial court did not acquire jurisdiction over Petitioners before adjudicating their interests. This violated the Petitioners’ due process rights, and the trial court did not have jurisdiction to order the sale of their property. The orders must therefore be vacated. III. A Void Order is not Capable of Being Reformed or Cured A void order cannot be enforced against any party. It is not susceptible to ratification or confirmation, and its nullity cannot be waived. See In re Bokeloh, 21 S.W.3d 784, 792–93 (Tex. App.—Houston [14th Dist.] 2000, orig. proceeding). When the various orders were entered against Petitioners without the trial court having obtained jurisdiction, they were void ab initio. And void orders cannot be cured. See, Id . A. Voluntary Appearance in a Case does Not Cure Prior Jurisdictional Defects. The court of appeals noted that the Master’s Reports findings (e.g. alter ego) did not bind non-parties TCSM or Mitchell (see Opinion, p. 17 and n. 10). But then the court of appeals reasoned that TCSM’s and Mitchell’s subsequent intervention conferred jurisdiction on the trial court to rule on ownership of their property. Mitchell’s and TCSM’s intervention did not cure the due process deficiencies that existed before their intervention. The intervention could not confer jurisdiction on the court to validate a void order post facto, nor could it ever confer subject matter

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jurisdiction on the trial court (whose plenary jurisdiction to add new parties had lapsed). Without jurisdiction at the time the orders were entered, the orders were void ab initio. See Id. B.

An Evidentiary Hearing is Not a Substitute for a Trial

Despite the Petitioners’ claims of lack of notice and lack of opportunity to defend their property rights, the court of appeals seems mollified by the simple, brief evidentiary hearing on Petitioners’ motion to modify the court’s prior orders. (See Opinion, p. 17). The court of appeals acknowledged that this disposition was a ruling on Petitioners’ ownership claims. However, this evidentiary hearing is not the same as affording Petitioners their right to trial. First and foremost, a party may not obtain a favorable judgment unless it has filed adequate pleadings. Cunningham v. Parkdale Bank, 660 S.W.2d 810, 813 (Tex. 1983); Stoner v. Thompson, 578 S.W.2d 679, 682 - 683 (Tex. 1979). In fact, a court does not acquire jurisdiction over a matter unless and until a petition is filed. Cunningham, 660 S.W.2d at 812. Due process requires that a party be given adequate notice of claims and a fair opportunity to appear and defend its interests. Id. Similarly, fundamental fairness dictates that a party must be given a reasonable opportunity to be heard on the merits of its case; and, such opportunity must be in a meaningful manner. Id. The brief hearing upon which the court of appeals relied does not satisfy those requirements.

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In contrast, the law’s requirements that a third party’s property rights be decided in a separate trial allows Petitioners to protect their rights through the protections afforded under the Texas Rules of Civil Procedure, including pretrial discovery. The brief hearing on Petitioners’ motion to modify did not allow them a meaningful opportunity to defend their property rights. In fact, by placing the burden on Petitioners to undo the prior orders, the trial court actually shifted the burden of proof to them instead of the receiver. As such, the hearing did not satisfy the requirements of due process and the orders should be set aside. ___________________________________________________________ RELIEF REQUESTED ___________________________________________________________ Petitioners Mitchell and TCSM, LLC respectfully request: 1.

that this Petition for Review be set for determination on the Court’s calendar at the Court’s earliest convenience;

2.

that the Petition be granted, briefs on the merits be requested and the case be set for oral submission;

3.

that upon submission, the Court of Appeals’ and trial court’s orders below be reversed and set aside as to Mitchell and TCSM, LLC;

4.

that Petitioners have and recover their costs of court and reasonable and necessary fees and expenses incurred in prosecution of this appeal to the extent permitted by law;

5.

that Petitioners have all other and further relief to which they are justly entitled, both at law and in equity.

!18

Respectfully submitted, BRYANT LAW /s/ W. Joel Bryant W. Joel Bryant State Bar No. 03277975 [email protected] T. Kyle Bryant State Bar No. 24078278 [email protected] P.O. Box 53587 Houston, Texas 77052 713-227-7377 ATTORNEY FOR PETITIONERS JENNIFER MITCHELL and TCSM, LLC CERTIFICATE OF COMPLIANCE This document complies with the word-count limitations of Tex. R. App. P. 9.4(i), if applicable, because it contains 4,317 words, excluding any parts exempted by Tex. R. App. P. 9.4(i)(1). CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and forgoing document was served on all parties by and through their counsel of record in accordance with the Texas Rules of Appellate Procedure by Bryant Law on June 30, 2017, as follows: Famose Garner 10101 Southwest Fwy, Ste. 400 Houston, Texas 77074 [email protected]

Brendetta Scott Hoover Slovacek 5051 Westheimer, Ste. 1200 Houston, Texas 77056 (713) 977-5395 (f) [email protected]

Riecke Baumann P.O. Box 131647 Houston, Texas 77219 [email protected]

Alan R. Cervenka 702 Stonewall dr. Richmond, Texas 77469 [email protected] /s/ W. Joel Bryant W. Joel Bryant

!19

APPENDIX Verification………………………………………….………………............Appendix 2 Order Sanctioning Tom George…………………………………............…..Appendix 3 Order Denying Mitchell’s Motion to Modify/Reconsideration......................Appendix 5 Order Allowing Sale………….……………………………………………..Appendix 6 14th Court of Appeals Opinion…...…………………………………………Appendix 9 14th Court of Appeals Judgment…………………………………………..Appendix 32

APP'X01

THE STATE OF TEXAS COUNTY OF HARRIS

§ § §

K N O W ALL MEN BY THESE PRESENTS

VERIFICATION BEFORE M E , the undersigned authority, on this day personally appeared W. JOEL BRYANT, who being by me first duly sworn, upon his oath stated the following: "My name is W. JOEL BRYANT. I am the Attorney of record for Jennifer Mitchell and TCSM, LLC in this case. The following orders (and opinion), which form Petitioner's appendix, are true and correct copies of orders and opinions issued by the trial court (or Court of Appeals) in the case below: 1. 9/24/2014 O r d e r Sanctioning To m George A n d Setting October 1 0 , 2 0 1 4 Compliance Hearing; 2. 4/14/2015 Order Denying Third-Party Jennifer Mitchell's Fourth Motion to Modify Court Orders a n d T h i r d Party Jennifer Mitchell's Emergency M o t i o n f o r Reconsideration; 3. 6/2/2015 Order Allowing Sale; and 4. M a r c h 30, 2017 Opinion in Case No. 14-15-00417-CV, These orders are also included as part of the clerk's record in the underlying appeal." Signed on this the 30th day of June, 2017.

A

/

Y

0001nEL SUBSCRIBED A N D SWORN TO BEFORE M E on the 30th day o f June, 2017, to certify which witness my hand and official seal.

RY PUBLIC, Si KRISTEN BRYANT •• :-. .40:c.v!.t N ••-k:lientrNotary Public, State of Texas '.::.A.%...„••4•4-4.z Comm. Expires 08-22-2020 )/tgif;-0'ss N o t a r y ID 129089378

Pri nte Name: Commission Expires:

APP'X02

rE OF TEXAS

9/22/2014 2:24:40 PM Chris Daniel - District Clerk Harris County Envelope No. 2575370 By: AITDn Sonnier

®/JI.M

2004-41,286 61st

++

Turbine Resources Unlimited, Inc. Versus Tom George & International A, Inc,

+

In The District Court

nJ/J

61st Judicial District

CJ}-ft"

Harris County, Texas

Order Sanctioning Tom George 1 And Setting October 10, 2014 Compliance Heari = @ For the reasons stated on the record, Tom George((' D~mctioned for non-compliance with the November 20, 2007 turnover, tf:l June 6, 2014, and other pending orders. ,,~~ 1.

2.

It is ordered that, no later than noon, on Octob~ ,. , 2014, () ((Jg) Tom George must:

~

a.

Pay Receiver $15,000;

b.

Comply with all pending orders, i June 6, 2014 order;

c.

File proof of the compliance.

q

ft~

W

oing the turnover order and

If Tom George does not purge h:- .~5)elf of the contempt by complying with the orders listed in parag~ n 2, he will be attached and held in the Harris County jail for thrfc_~.&avs.

Tom George is ordered to mi sonally appear, on October 10, 2014, at 10:00 a.m., to prove t ~ 1pliance with this order.

3.

If, after spending thJL <<'..))days in jail, Tom George has not purged himself of the co ~~pt by complying with the orders listed in paragraph 1, he w·fr~e attached and held in the Harris County jail for two weeks. -

4.

If, after sper;idlJl · two weeks in jail, Tom George has not purged himself of t'ne contempt by complying with the orders listed in paragrap~ t!J· the Court will hold a compliance hearing, to see which sanctions,~"' needed to obtain Tom George's compliance with the orders~~...,

_u,

re

5.

Subje@ito third parties' rights, Receiver may sell: ~

a ::-,;

he pallet stackers and inventory belonging to defendant or TCSM at Mike Elliott's Conroe warehouse;

b. c.

One 1954 Ford F-150 pickup truck, vin F10D4R16575;

The white Bentley Azure convertible, vin SCBZK25E52CX01106, that Receiver seized at 2121 Brittmoore, and that Tom George _ _ _ _ _ _ _ _ _ _ delivered to_J"lo_torWerkx _( or similar _description};~~- -

APP'X03 RECORDER'S MEMORANDUM This 1nslrumen11s o1 poor qua lily at ihe lime of 1mag,ng

'

141

d.

One 2009 Bentley Continental, vin SCBDR33WX9C060276;

e.

One 2011 Ford Expedition, vin 1FMJU1H56BEF42445;

f.

One 1962 Chevrolet Corvette, 208675105095;

g.

One forklift that was located at 2121 Brittmore, Suite 3600, Houston, Texas ("the office");

h.

Office furniture and equipment, and personal lte , , Including furniture, computers, monitors, pictures, refrige~ rs, industrial (large) shelving, file cabinets, and telephones, Jl,it were located at the office. "

oJVJ ;~

6. Receiver may:

a. Sell the property, by public or privat

~

a e;

'/

b. Hire a licensed auctioneer to sell t e

operty at private sale;

c. Execute titles and such ot~ Jdocuments as may be reasonable or necessary in c .. ction with the sale of the property conveying the pro

d. Pay the listing auctioneer :f ommlssion, from the proceeds of the sale; ~· e. Pay liens superior to f. Pay title insuranc ~ the proceeds; @l

1

B.

tiff's claim from the proceeds;

d other customary closing costs from

g. Pay storage ~ J i es and those who helped Receiver seize, store, and s,el ~e assets; h. Pay to RlQter the remain ing proceeds, to apply to the balance .'.·d! e under the judgment and order appointing receiv nd i. To ( siribute any remaining proceeds to the debtors, after m~ jtm and court approval. "~(! ,j -=~~

7. Rec;~~ must provide five days' prior notice of the sales to defense co t:lt:.s~I, by e-mail; ,

8. -~

,J

ther pending motions are reset, until further notice.

)

'SEP 2 ·4 2014

Signed, _ _ _ _ _ _ _.

APP'X04

142

4/13/2015 2:05:33 PM Chris Daniel - District Clerk Harris County Envelope No. 4864148 By: TERESA KIRBY Flied: 4/13/2015 2:05:33 PM

2004-41,286 61st Turbine Resources Unlimited, Inc. Ve~us Tom George & International A, Inc.

+

In The District Court

+

61st Judicial District

P1 MODIY Rl!HRY

+

and Jennifer Mitchell, Intervenor

Harris County, Texas

Order Denying Third Party Jennifer Mitchell's Fourth Motion to Modify Court Orders and Third Party Jennifer Mitchell's Emergency Motion for Reconsideration

It is ordered that Third Party Jennifer Mitchell's Fourth Motion to Modify Court Orders and Third Party Jennifer Mitchell's Emergency Motion for

.

Reconsideration are denied.

,

Approved:

/s/Famose . Garner Farnese T. Garner SBN 24074252

6201 Bonhomme Road, Suite 354-N Houston, Texas 77036 [email protected] Phone: (832) 722-0881 Fax: (713) 481-0205 Attorney for Riecke Baumann

. ,,,,

APP'X05 ,-

RECORDER'S MEMORANDUM This ins1rurnent 1s of poor qualrty at the lime of 1rnag1ng

334

5/12/2015 8:56:18 AM

Chris Daniel - District Clerk Harris County Envelope No: 5241275 By: KIRBY, TERESA A Filed: 5/12/2015 8:56:18 AM Pgs-3

2004-41 ,286 61 st Turbine Resources Unlimited, Inc. Versus Tom George and International A, Inc.

+

In The District Court

+

61 st Judicial District

+

Harris County, Texas

SALPX

Order Allowing Sale It is ordered that Receiver, Riecke Baumann, may sell to plaintiff, Turbine Resources Unlimited, Inc., 1056 Route East, West Winfield, NY 13491, for $50,000, the items and inventory that were seized In place at Mike Elllott's warehouse in Conroe, Texas including: The items listed, below; ··-

111m

TXQI

-

D1~rigUiQn

1

Rotor

Box

PGT - SIN M33668

2

Row 2 nozzel

Pallet

D/K model?

3

Blade Ring

Pallet

Half section 501 AA

4

Stub shaft

Pallet

Fwd compressor Frame 5

5

Gears/ Fuel nozzles

Box

Misc mix

6

Com bustlon cans - ten

Pallets

With flowsleeves, 7EA type

7

Row 2 shrouds

Pallet

6B, partial set

8

F3 R2 buckets

Box

Not repaired

9

R-0 blades

Box

Partial set - ?FA

10

Fuel pump

Box

Roper

11

Compressor blades

Box

2 boxes, mixed

12

F3R1 buckets

Box

Not repaired

13

Fuel nozzles assemblies

Pallet

Unknown

APP'X06 I 372001-00001 CMT 4/21/1015 00959191.DOC 11

4

14

Vanes

Pallet

9 each, typle unknown

15

Turbine wheel

Pallet

Type unknown

16

Flow sleeves

Box

Ten, tow boxes. 7EA

17

Row 2 blades

Box

501 - type unknown

18

Row 1 blades

Box

501 - type unknown

19

Com presser blade rings

Pallet

F7 - type unknown

20

Diaphragm half

Pallet

Frame S, half - matches nozzle above

21

Compressor blade rings

Pallet

F7 - type unknown

22

Vane segments

Pallet

251?

23

Vane segm ants

Pallet

251? - ten each

24

Clamshells

Pallet

2 pallets

25

Row 1 nozzle

Pallet

Frame 5 2 shaft

26

Core plubs

Pallet

Misc mix - type unknown, used

27

Compressor blades

Pallet

Row 17 rotor

28

Row 2 buckets

Box

Frame 5 tire wire, used, not repaired

29

Row 5 blades

Box

191, partial set

30

R-O blades

Pallet

Partial set - 7FA

31

Fuel nozzles assemblies

Box

Type unknown

-

APP'X07 {372001-00001 CMT 4/21/2015 00959191.DOC 1}

5

Pallet stackers and scale; and One goose necked trailer, seized at 2121 Brittmoore.

The Court approves the previous sales of furniture, office equipment, and the Ford F-150 that were seized at 2121 Brittmoore.

Signed, - ~ Signed: 6/2/2015 Presiding Judge

- · 2015 ~~

APP'X08

{3 7200 I -00001 CMT 4/21/2015 0095919 l. DOC l }

6

Affirmed and Petition Denied and Opinion filed March 30, 2017.

In The

Fourteenth Court of Appeals NO. 14-15-00417-CV

JENNIFER MITCHELL AND TCSM, LLC, Appellants V. TURBINE RESOURCES UNLIMITED, INC. AND TOM GEORGE & INTERNATIONAL A., INC., Appellees On Appeal from the 61st District Court Harris County, Texas Trial Court Cause No. 2004-41286

NO. 14-16-00102-CV IN RE JENNIFER MITCHELL AND TCSM, LLC, Relators ORIGINAL PROCEEDING WRIT OF MANDAMUS OPINION APP'X09

In this consolidated appeal and petition for writ of mandamus, Jennifer Mitchell and Turbine Component Super Market, LLC (TCSM) challenge four trial court orders signed in a post-judgment receivership proceeding. The underlying judgment was rendered in favor of Turbine Resources Unlimited (Turbine) against Tom George and International A., Inc. Appellants Mitchell and TCSM were not parties to the original judgment, but intervened post-judgment to protect their interest in property included in the court’s turnover order and receivership. The first challenged order, signed on September 24, 2014, authorized the receiver to sell assets that appellants contend belonged to TCSM and two vehicles that Mitchell claimed she owned. Following an evidentiary hearing, in which Mitchell testified, the trial court signed two additional orders: the April 14, 2015 order denying Mitchell’s fourth motion to modify the court orders authorizing sale, and the June 2, 2015 order approving the sale of property that appellants contend belonged to TCSM. Appellants later filed a motion to set aside the master’s reports as void, which the trial court denied. Mitchell and TCSM ask this Court to vacate these orders as well as the January 2, 2014 order adopting the first master’s report and the September 5, 2014 order adopting the second master’s report, upon which the orders of sale are based. We conclude that: this Court lacks jurisdiction over appellants’ challenge to the trial court’s September 24, 2014 order of sale; the trial court did not err in denying the motion to modify court orders and signing the June 2, 2015 order of sale; and the trial court did not clearly abuse its discretion in denying the motion to set aside the master’s reports. We therefore overrule appellants’ issues, affirm the April 14 and June 2, 2015 orders, and deny the petition for writ of mandamus.

2 APP'X10

BACKGROUND A.

Initial judgment and appointment of master and receiver

This dispute arose from a suit Turbine filed in 2004 against International A, Inc. and Tom George for breach of contract and failure to make payment on a sale of equipment. The trial court granted summary judgment in Turbine’s favor in 2006, and Turbine served a writ of execution on George and International A. On December 8, 2006, the trial court signed a turnover order, appointing a receiver. That same day, George filed for chapter 13 bankruptcy protection. George listed his employer as TCSM and his salary as $2,000 per month. The bankruptcy petition was later dismissed because George did not appear for the creditors’ meeting. In October 2007, the trial court signed a supplemental turnover order, appointing a receiver and master in chancery to collect the unpaid final judgment of $188,246.94 plus $10,000 in attorney’s fees. The supplemental order placed Tom George and International A under the receivership and appointed Riecke Baumann as master and receiver.1 See Tex. R. Civ. P. 171; Tex. Civ. Prac. & Rem. Code Ann. § 31.002 (West 2015). The court gave the receiver “full power and authority to take possession of all non-exempt property of every defendant that is in any defendant’s actual or constructive possession or control.” The order also authorized the receiver to order “from all defendants and third parties” the production and turnover of assets, evidence, and documents upon all matters he believed pertain to compliance with the order. The trial court found George in contempt for knowingly and intentionally

1

The court’s supplemental turnover order replaced the original receiver with Baumann, but it provided no reason for doing so. 3 APP'X11

violating multiple turnover orders,2 a compulsion order, and a Rule 11 agreement in which George had promised to make payments to the receiver. The court also found George in contempt for interfering with the receiver’s performance of his duties, thwarting the sale of certain property, failing to notify the receiver of the existence of other property, failing to turn over property, and delivering property to other individuals in an effort to hide the property from the receiver. B.

Master’s Reports

The receivership has had a convoluted procedural history, which we explain in some detail to provide context for the parties’ arguments. The receiver, acting in his capacity as master, filed multiple master’s reports containing his findings. In November 2013, the receiver filed the first master’s report, which the trial court adopted and signed on January 2, 2014. The report made the following findings: George is the sole owner of the defendant company, International A, Inc., and another company, TCSM. International A, Inc., is defunct (if it ever existed) and TCSM has a forfeited corporate status. According to the records from the Texas Secretary of State, TCSM was formed on January 26, 2005. The franchise was involuntary ended, but was re-formed on November 16, 2007, eleven months after George’s nonexempt assets were placed into receivership, including the assets that were used to create TCSM. George’s transfer of assets to TCSM was, therefore, void. The corporation was formed for the purpose of hiding assets from the receivership. George has refused to provide proof that anyone else owns TCSM. As there is no proof that TCSM is a corporation, George is its sole proprietor. George has used TCSM to fund personal expenses, has comingled personal and company funds, and has made TCSM a device by which he has hidden assets from receiver’s collection. 2

The trial court found George in violation of three turnover orders the court had signed on December 8, 2006, October 5, 2007, and November 12, 2007. 4 APP'X12

TCSM is George’s alter ego. International A, Inc. and TCSM have never existed as corporations and George has always operated them as sole proprietorships to hide assets and pay his personal expenses. George is a convicted felon, having pled guilty to fraud in January 2009 in the United States District Court for the Southern District of Texas. To satisfy the plea deal he made with the United States, George paid $250,000 to the United States during the receivership, without advising Receiver. George has never accounted for the source of the $250,000, except to claim that $100,000 was lent to him by TCSM and the remainder were loans from family members. No proof or documentation has been provided to prove these loans; the undocumented $100,000 loan from the business is further proof that TCSM is George’s alter ego and sole proprietorship. On January 6, 2012, the trial court found George to be in contempt of court for not advising the receiver of the sources of the $250,000 George paid the Government to satisfy the plea deal. The contempt order found George knowingly and intentionally violated every order issued by the trial court, including the turnover orders. George represented to the court that he lived with his wife, Dorothy George, at 12445 Memorial Drive, Houston, Texas 77024. However, on September 15, 2009, George began leasing an apartment at One Park Place, 1400 McKinney Street, Unit 808, Houston, Texas 77010. The residents of the apartment are George and his girlfriend, Jennifer Mitchell. The lease for the apartment is in the name of TCSM, LLC. Included in George’s lease application is his business card, which lists his title as President of TCSM, LLC. His application also states that he is self-employed, affirming that TCSM, LLC is his d/b/a and that TCSM is not an LLC. On March 7, 2014, Mitchell appeared before the trial court pursuant to a subpoena served on her by the receiver. Because Mitchell did not bring documents to show where George could be served with process, as the subpoena requested, 5 APP'X13

the court ordered Mitchell to re-appear on March 28 with either George or proof of where he could be served.

The court also ordered Mitchell to appear for a

deposition on March 24. When Mitchell failed to appear, the receiver filed a request for sanctions. The trial court signed an order on May 8, 2014, setting a status conference and ordering Mitchell to personally appear at the status conference with proof that she complied with the order to appear for deposition. The court also ordered Mitchell to “bring with her proof of ownership, and the location of every vehicle that she has owned, possessed, or controlled, in the last five years.” Mitchell did not appear at the status conference despite the court’s May 8 order. On June 6, 2014, the trial court signed an order requiring Mitchell and George to appear for deposition, bringing with them “proof of the whereabouts and their ownership, or rights to possession, of all vehicles and equipment that they owned, possessed, managed, or held for others during the receivership.” Mitchell and George were later deposed but did not provide the requested documentary evidence of ownership. The receiver supplemented his findings in the second master’s report, which found that George repeatedly violated the court’s turnover orders by failing to tender numerous luxury vehicles to the receiver, purchasing several Corvettes with non-exempt funds, and hiding other vehicles from the receiver by delivering them to mechanics, who placed liens on the vehicles. The receiver also found that Mitchell claimed sole ownership of two vehicles: a 2009 Bentley and 2011 Ford Expedition. According to the receiver’s findings, however, Mitchell admitted that payments on the cars’ notes were regularly made by TCSM, which the Court had previously found was solely owned and controlled by George.

The receiver

concluded that the two vehicles were subject to the receivership and not owned by 6 APP'X14

Mitchell because Mitchell showed no proof of income apart from TCSM and all car loan payments had been made by TCSM. The report also recounted Mitchell’s admission at her deposition that she and George broke into George’s Brittmoore office location after the receiver had changed the locks.

Upon entering the

building, Mitchell and George removed a 2002 Bentley and TCSM inventory subject to the receivership. The receiver further found that Mitchell and George were common-law spouses and that all property owned by Mitchell was community property subject to the receivership.3 He cited Mitchell’s medical records (which listed her as married), the loan application for the 2011 Expedition (which identified her as “Mrs. Jennifer Mitchell”), and Mitchell’s testimony that she divorced her previous husband before she and George moved into an apartment together in 2009. The receiver concluded that the Bentley and the Expedition, which were purchased after 2009, were therefore community property subject to the receivership. Baumann’s second master’s report was adopted by the trial court in September 2014. Following its adoption of the second master’s report, the trial court signed the challenged September 24, 2014 order, which authorized the receiver to sell, “subject to third parties’ rights,” various items, including the 2009 Bentley Continental, 2011 Ford Expedition, and inventory located at a Conroe, Texas warehouse “belonging to George or TCSM.” The order also sanctioned George for his non-compliance with the court’s turnover orders and set an October 10, 2014 compliance hearing.

3

George’s wife, Dorothy, died in August 2013. 7 APP'X15

C.

Mitchell’s challenge to the receiver’s authority

Although Mitchell was not a party to the initial lawsuit or receivership proceeding, she filed several motions as an “interested third party” to protect her interest in property subject to the receivership. In October 2014, Mitchell filed a motion to modify court orders, asking the court to modify its orders to withdraw authority from the receiver to sell the 2011 Ford Expedition and 2009 Bentley Continental purportedly owned by Mitchell. The motion also attacked several findings in the first and second master’s reports regarding George’s relationship with Mitchell, their use of TCSM assets to pay for the Expedition and Bentley, and TCSM’s status as George’s “alter ego.” In January 2015, Baumann filed his third master’s report.4

The report

included additional findings that George had violated the court’s turnover and contempt orders and findings regarding Mitchell’s involvement in George’s actions. That same month, counsel for Mitchell appeared on her behalf at a status conference.

Following the status conference, the court signed an order

acknowledging receipt of the third master’s report, but the language adopting the report was crossed out by the trial court. Mitchell filed a motion objecting to all three master’s reports followed by a “Fourth Motion to Modify Court Orders,” in which she further argued that the Expedition and Bentley were improperly included in the court’s turnover order. Mitchell disputed the receiver’s findings that she and George were common-law spouses and that the vehicles were subject to the turnover order. Mitchell filed a “First Supplemental Fourth Motion to Modify Court Order” on January 27, 2015, and an “Emergency Motion for Reconsideration and Notice of Hearing” on February 4. 4

The report was styled Master’s Second Supplemental Report. 8 APP'X16

D.

Mitchell’s and TCSM’s plea in intervention challenging the master’s reports and order of sale

In March 2015, Mitchell and TCSM filed a plea in intervention, claiming the receiver had wrongfully taken possession of Mitchell’s and TCSM’s property in an attempt to satisfy the judgment against George and International A. Mitchell again challenged the receiver’s inclusion of the Expedition and Bentley in the receivership. Mitchell later filed a second supplemental fourth motion to modify, contesting the Receiver’s findings.5

Mitchell claimed that she “owns and/or

controls” TCSM and its inventory. According to Mitchell, TCSM and its assets were not subject to the turnover order because there had not been a separate judicial process to “pierce the corporate veil” or declare that Mitchell and George were common-law spouses. Therefore, Mitchell argued, the receiver unlawfully confiscated third-party corporate assets under the turnover order. Mitchell asked the court to release the Expedition, Bentley, and inventory allegedly belonging to TCSM from the receivership. Mitchell, joined by TCSM, also filed an objection to the receiver’s motion to approve sale, arguing that the receiver was attempting to sell property that was not owned by the judgment debtor but by a third party, TCSM. According to Mitchell and TCSM, George was merely an employee of TCSM, and the receiver exceeded the scope of his authority by including property in the receivership that was not owned by George. Mitchell and TCSM argued that the receiver improperly used the turnover proceeding as a vehicle for determining ownership of property and incorrectly concluded that George controlled TCSM and its property, thereby making that property subject to the receivership. 5

TCSM did not join in this motion. 9 APP'X17

The trial court held an evidentiary hearing on March 30, 2015. After hearing Mitchell’s testimony, the trial court signed two orders. The first order, signed April 14, 2015, denied Mitchell’s fourth motion to modify court orders and emergency motion for reconsideration. The second order, signed June 2, 2015, approved the sale of the assets that appellants contended were owned by TCSM. This appeal followed. After perfecting their appeal, Mitchell and TCSM filed a motion to set aside the master’s reports as void, which the trial court denied. That ruling is the subject of Mitchell’s and TCSM’s petition for writ of mandamus. ANALYSIS I.

This Court lacks jurisdiction to consider appellants’ challenge to the September 24, 2014 order. We first address our jurisdiction over the portions of the appeal challenging

the trial court’s September 24, 2014 order, which authorized the receiver to sell the 2009 Bentley Continental and 2011 Ford Expedition as well as certain assets that appellants contend belong to TCSM.6 We conclude this Court lacks jurisdiction to consider appellant’s challenge to the September 24, 2014 order for two reasons: (1) because the record reflects that Mitchell herself sold the vehicles, this challenge, as it pertains to the vehicles, is moot; and (2) the order is interlocutory because it does not resolve the discrete issue of Mitchell’s or TCSM’s ownership interest in the property. “A case becomes moot if, since the time of filing, there has ceased to exist a justiciable controversy between the parties—that is, if the issues presented are no longer ‘live,’ or if the parties lack a legally cognizable interest in the outcome.” Heckman v. Williamson Cty., 369 S.W.3d 137, 162 (Tex. 2012). When a party 6

Mitchell does not challenge this order in her petition for writ of mandamus. 10 APP'X18

appeals an order appointing a receiver or authorizing sale of certain property and the property has been sold, the appeal of the order becomes moot. See Beard v. Beard, 49 S.W.3d 40, 71 (Tex. App.—Waco 2001, pet. denied); Zipp v. Wuemling, 218 S.W.3d 71, 73 (Tex. 2007) (“[a]n appeal is moot when a court’s action on the merits cannot affect the rights of the parties.”). The receiver, as well as the trial court, instructed Mitchell to provide the location and proof of ownership of the vehicles. Mitchell instead sold the vehicles.7 Because Mitchell no longer has a claim of ownership in the vehicles, her appeal regarding the portion of the order authorizing the receiver to sell the Bentley and Expedition is moot. Further, appellants Mitchell and TCSM have no right to appeal any part of the September 24, 2014 order of sale because it did not resolve the discrete issue they raise: their ownership interest in the property. Texas has long recognized the independent and ongoing nature of receivership proceedings. Hill v. Hill, 460 S.W.3d 751, 763 (Tex. App.—Dallas 2015, pet. denied). This case, which arose from a 2004 judgment, is no exception. Discrete orders signed in the course of a receivership proceeding may be appealed even though final judgment has not been rendered in the main case. Id. at 763–64. An order in a receivership proceeding must, however, resolve a discrete issue to be a final, appealable order. See London v. London, 349 S.W.3d 672, 674 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (citing Huston v. Fed. Deposit Ins. Corp., 800 S.W.2d 845, 847 (Tex. 1990) (op. on reh’g)). In Huston, the supreme court concluded that a receivership order resolves a discrete issue if “it finally adjudicates a substantial right,” but is 7

The supplemental turnover order instructed “all third parties who hold a defendant’s property” to “immediately notify the receiver, and to deliver the property within 3 working days of demand from the receiver.” If ownership of the property was in dispute, the order authorized the receiver to “take custody of the asset until the Court can determine the rights of those claiming interests in the asset.” The trial court signed an order on November 12, 2015 ordering Mitchell to show cause why she should not be sanctioned for selling the vehicles. 11 APP'X19

interlocutory if “it merely leads to further hearings on the issue.” Id. Here, the order of sale authorized the receiver to sell the property “subject to third parties’ rights.” Because of this condition, the order did not resolve the discrete issue of Mitchell’s or TCSM’s ownership interest in the property. In particular, the order led to further hearings regarding the assets appellants contend belong to TCSM; it is therefore interlocutory and not appealable. Accordingly, we do not consider any of appellants’ issues as they relate to the September 24, 2014 order. II.

The trial court did not err in its June 2, 2015 order of sale or in denying Mitchell’s motion to modify. A.

The trial court did not issue orders that substantively altered its judgment after its plenary power expired.

Appellants also challenge the trial court’s April 14, 2015 order denying Mitchell’s fourth motion to modify and emergency motion for reconsideration, as well as the court’s June 2, 2015 order permitting the sale of assets that appellees contend belong to TCSM. In their second issue, appellants argue that the trial court materially altered the original judgment after its plenary power expired by expanding the scope of the parties and property responsible to satisfy the judgment. According to appellants, the trial court improperly adopted the master’s reports, which contained findings that included property belonging to Mitchell and TCSM in the receivership. Appellants argue that because they were not parties to the litigation, the trial court had no authority to affect their property rights, and the order allowing sale of the property is void. Generally, a trial court has plenary power to modify its judgment for thirty days after the judgment is signed. Tex. R. Civ. P. 329b(d). In some cases, plenary power may extend up to an additional seventy-five days. Tex. R. Civ. P. 329b(c), 12 APP'X20

(e), (g). Even after plenary power has expired, however, a trial court retains the power to enforce its judgments. See Tex. R. Civ. P. 308. This power extends to enforcement of the judgment by execution or other appropriate process when necessary. Tex. R. Civ. P. 621. “The court’s post-judgment power to enforce its judgment and to aid the judgment creditor in his efforts to collect on that judgment can last until the judgment is satisfied.” Bahar v. Lyon Fin. Services, Inc., 330 S.W.3d 379, 387 (Tex. App.—Austin 2010, pet. denied). Here, the trial court signed an amended order granting turnover relief and appointing a receiver and master, finding that the appointment of a receiver was justified because “the Court believes that non-exempt assets exist . . . which defendants tend to hide” and the appointment of a master was justified to aid the court and conserve court resources. The court also found that appointment of a master and receiver was necessary due to George’s failure to comply with the court’s December 8, 2006 order. The court appointed Riecke Baumann as master in chancery in accordance with Texas Rule of Civil Procedure 171 and as Receiver pursuant to section 31.002 of the Texas Civil Practice and Remedies Code. Even after the court’s plenary power had expired, the trial court had the authority to issue these orders to enforce its judgment through execution. As part of that enforcement, the trial court retained the power to approve the master’s reports concerning enforcement of the judgment and to authorize him, as receiver, to sell non-exempt property of the judgment debtors.

Whether the property in fact

belonged to a judgment debtor is a question that goes to the merits of the trial court’s orders; it does not affect the court’s continuing jurisdiction to enforce its judgment. See, e.g., Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76–77 (Tex. 2000) (explaining distinction between right of plaintiff to relief on the merits and jurisdiction of court to afford it). We therefore overrule appellants’ second issue. 13 APP'X21

B.

The trial court had authority under the turnover statute and appellants’ plea in intervention to issue the orders.

In their first issue, appellants argue that a separate trial was required to adjudicate ownership of the property in which Mitchell (through TCSM) claimed an interest. According to appellants, the trial court erred in resolving disputed issues of property ownership and alter ego through a turnover proceeding by adopting the master’s reports, which formed the factual and legal basis of the trial court’s order approving the sale of the property. By approving the sale without adjudicating the property’s ownership in a separate trial, appellants argue, the trial court exceeded its authority under the turnover statute. For the reasons explained below, we conclude that the turnover statute authorized the trial court’s actions because the orders issued before Mitchell injected herself into the proceedings directed only George to turn over the property and did not bind TCSM or Mitchell. Mitchell and TCSM then chose to intervene to claim an interest in the property, so they cannot complain that the trial court thereafter ruled on their claims. The turnover statute allows a judgment creditor to seek aid from a court in reaching non-exempt property owned by a judgment debtor that cannot readily be attached or levied on by ordinary legal process. Tex. Civ. Prac. & Rem. Code Ann. § 31.002(a). As relevant here, the statute provides that the trial court may “order the judgment debtor to turn over nonexempt property that is in the debtor’s possession or is subject to the debtor’s control” or “appoint a receiver with the authority to take possession of the nonexempt property.” Tex. Civ. Prac. & Rem. Code Ann. § 31.002(b)(1), (3). In general, “Texas courts do not apply the turnover statute to non-judgment debtors.” Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 227 (Tex. 1991). A 14 APP'X22

court may use the statute, however, to reach assets subject to the control of a judgment debtor that are held by a third party. Plaza Court, Ltd. v. West, 879 S.W.2d 271, 276–77 (Tex. App.—Houston [14th Dist. 1994, no writ); see also Parks v. Parker, 957 S.W.2d 666, 668 (Tex. App.—Austin 1997, no writ) (“The judgment debtor can also be ordered to turn over property, no matter who possesses it, if the property is subject to his control.”). In Schultz v. Fifth Judicial Dist. Court of Appeals, the supreme court observed: Upon proof of the necessary facts, [the turnover statute] authorizes the trial court to order affirmative action by the judgment debtor and others to assist the judgment creditor in subjecting such non-exempt property to satisfaction of the underlying judgment. Such an order acts as a mandatory injunction against the judgment debtor and, if there are such parties, against the receiver and any third parties interested in the property rights being adjudicated. 810 S.W.2d 738, 740, 740 (Tex.1991), abrogated on other grounds by In re Sheshtawy, 154 S.W.3d 114 (Tex. 2004) (emphasis added). Our sister court applied these principles in Bay City Plastics, Inc. v. McEntire, 106 S.W.3d 321 (Tex. App.—Houston [1st Dist.] 2003, pet. denied). In that case, third parties argued that the trial court erred in applying the turnover statute “in a manner making it applicable to assets in the possession of the third party non-judgment debtors.” Id. at 325. The court held: Although the turnover statute cannot ordinarily be used to adjudicate the ownership of property in a manner that would be binding upon third parties, we disagree with appellants’ argument that the trial court was prohibited in this case from determining what property was owned by the judgment debtor to facilitate the issuance of its turnover order. The turnover statute allows a trial court to order a judgment debtor to turn over property that is owned by the judgment debtor if it is subject to the judgment debtor’s control. . . . The trial court, then, is permitted to determine what property meets those statutory requirements. See generally Schultz, 810 S.W.2d at 740 (holding that 15 APP'X23

trial court may issue turnover order against judgment debtor where “factual showing” is made that the judgment debtor (1) has nonexempt property, and (2) that property [is] not readily subject to ordinary execution). Id. Appellants rely on cases such as Elgohary v. Herrera Partners, L.P., which held that the turnover statute cannot be used as a mechanism to adjudicate a nondebtor’s substantive rights in property not subject to the debtor’s control. No. 01– 13–00193–CV, 2014 WL 2538556, at *5 (Tex. App.—Houston [1st Dist.] June 5, 2014, no pet.) (mem. op.). Unlike in Elgohary, however, the receiver did not seek an order in this case directing Mitchell or TCSM to turn over the property that became the subject of the June 2, 2015 order of sale.8 Instead, the trial court ordered George—not TCSM—to turn over TCSM assets of which George was the owner. In a supplemental turnover order, the court authorized the receiver to take possession of non-exempt property in George’s control even if situated on premises owned by a third party. The receiver found in his first report that TCSM had forfeited its corporate status and therefore George was its sole proprietor when the receivership began; the receiver also directed George—not TCSM—to turn over all turbine parts he or TCSM owned.9 These findings established that the property was owned or controlled by George as required for relief under the turnover statute. See Bay City Plastics, 106 S.W.3d at 325.10 The court then signed its September 24, 2014 order, which authorized the 8

We therefore need not address the extent to which a trial court may issue a turnover order directed to a third party—an issue that has divided Texas courts. See Maiz v. Virani, 311 F.3d 334, 343 n.9 (5th Cir. 2002); Parks, 957 S.W.2d at 668. 9

The second report documented George’s failure to turn over the parts as required by the turnover order. 10

We note that the master also made findings prior to the intervention that TCSM was George’s alter ego and that all property owned by Mitchell was community property subject to the 16 APP'X24

receiver to sell, “subject to third parties’ rights,” inventory located at a Conroe, Texas warehouse “belonging to George or TCSM.” These findings and orders alone would not have bound non-debtor third parties such as TCSM and Mitchell.11 See id. (“Any findings made by the trial court to facilitate the issuance of the turnover order will bind the judgment debtors only, and not third parties that the turnover order has not issued against.”). But Mitchell injected herself into the proceedings, filing several motions as an “interested third party” to protect her alleged interest in property subject to the receivership.12 Mitchell and TCSM then filed a plea in intervention, asserting claims to the vehicles and inventory and requesting a finding that this property should not be subject to the judgment. Intervention is a recognized option for a non-party seeking to protect its interest in property that is the subject of a turnover motion. E.g., Lerma v. Forbes, 166 S.W.3d 889, 893 (Tex. App.—El Paso 2005, pet. denied); Breazeale v. Casteel, 4 S.W.3d 434, 436–37 (Tex. App.—Austin 1999, pet. denied). Having chosen to pursue that option, however, Mitchell and TCSM cannot complain that the trial court thereafter ruled on the ownership issue. See Cre8 Int’l, LLC v. Rice, No. 05–14–00377–CV, 2015 WL 3492629, at *3 (Tex. App.—Dallas June 3, 2015, receivership. As we explain below, however, the master’s pre-intervention findings did not bind non-parties TCSM or Mitchell. We therefore need not address whether such findings could be made under the turnover statute or required a separate trial. Cf. B.Z.B., Inc. v. Clark, 273 S.W.3d 899, 904 (Tex. App.—Houston [14th Dist.] 2008, no pet.) (“The turnover statute cannot be used to make an alter ego determination which would subject a non-judgment debtor to a turnover procedure.”); Barrera v. State, 130 S.W.3d 253, 259–60 (Tex. App.—Houston [14th Dist.] 2004, no pet.) (holding trial court could order non-debtor spouse who was party to turnover proceeding to turn over community property subject to debtor spouse’s possession or control). 11

Turbine argues, however, that Mitchell agreed to the master’s reports through counsel. We address that argument below. 12

We need not address the parties’ arguments regarding whether these filings constituted an appearance because Mitchell and TCSM later intervened. 17 APP'X25

no pet.) (mem. op.). For these reasons, we conclude that the trial court had authority under the turnover statute and appellants’ plea in intervention to issue the orders of which appellants complain. We overrule appellants’ first issue. C.

Appellants intervened and therefore did not need to be served before the trial court signed the order of sale.

In their third and fourth issues, appellants argue that the trial court denied them due process by issuing the orders of sale without serving them with process or naming them as parties. Without proper service, appellants contend, the trial court did not have jurisdiction over them or their property, and the order of sale is void. Turbine responds that the order of sale is not void because Mitchell agreed to the first two master’s reports, and therefore she cannot attack the court’s adoption of those reports or subsequent orders based on them. According to Turbine, Mitchell’s counsel agreed to the second master’s report, which took judicial notice of the first report and incorporated its findings and conclusions. Turbine also contends that the report was introduced, without objection, at the September 19, 2014 hearing. The record does not clearly show whether Mitchell’s counsel agreed to the reports. Turbine cites findings to that effect in the January 2015 third master’s report (which the trial court did not adopt), but the record does not include a transcript of the September 19, 2014 hearing or documentary evidence of her counsel’s agreement. The record does, however, contain Mitchell’s objections to the master’s reports, which she filed in October 2014 and January 2015. Assuming without deciding that Mitchell did not agree to the reports, we conclude that the trial court’s orders did not offend the requirements of due process 18 APP'X26

regarding service and party status. “It is a basic tenet of American jurisprudence that before a court can affect a person’s interest in in personam litigation, that person must either be a party to litigation before the court or in privity to a party in litigation before the court.” AVCO Corp. v. Interstate Sw. Ltd., 145 S.W.3d 257, 263 (Tex. App.—Houston [14th Dist.] 2004, no pet.). As explained above, the turnover order and master’s reports that were issued before appellants injected themselves into the proceedings did not bind appellants.

Mitchell then filed

motions asserting her interest in property, and Mitchell and TCSM later filed a plea in intervention asserting claims to property. We are aware of no authority that requires an intervenor to be served before the trial court acquires jurisdiction to decide the intervenor’s own claims. Cf. Baker v. Monsanto Co., 111 S.W.3d 158, 160 (Tex. 2003) (per curiam) (discussing service on defendant against whom intervenor seeks relief). Because appellants intervened as parties, the trial court had jurisdiction thereafter to rule on their claims. Cf. Guaranty Fed. Savings Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 657 (Tex. 1990) (observing that intervenor is not required to secure court’s permission to intervene and party opposing intervention has burden to challenge it by filing motion to strike); Houston N. Properties v. White, 731 S.W.2d 719, 721 (Tex. App.—Houston [1st Dist.] 1987, orig. proceeding) (holding individuals “voluntarily submitted themselves to the jurisdiction of the [trial court] by way of their intervention in the case”). Following appellants’ intervention, the trial court held an evidentiary hearing in which Mitchell testified and the intervenors had an opportunity to present evidence. At the opening of Mitchell’s testimony, counsel for the receiver objected to “all statements that are made that contradict the two final master’s reports.” The trial court overruled the objection, stating: 19 APP'X27

THE COURT: . . . let me get something clear to you right now. And, again, I’m prepared to end this receivership. If you’re telling me that - - I understand that there is a master’s report; but if that master’s report has an error in it and that is being brought to my attention and you’re attempting to prevent this Court from correcting that error, then I’m going to end this receivership. Rather than treating the findings in the first two master’s reports as conclusive, the court heard Mitchell’s testimony on each of the receiver’s findings that appellants disputed, including those regarding her ownership of the vehicles, her ownership of TCSM, and the nature of her relationship with George. Mitchell admitted to dating George and living with him for approximately two years, but denied being married to him. Mitchell testified that she purchased TCSM in 2010 for approximately $100,000. But Mitchell was unable to produce a document memorializing the sale of the company, did not file any ownership or incorporation documents with the Secretary of State, and did not know that the company’s charter had been forfeited in 2005.13 At the conclusion of the hearing, the court denied appellants’ motions. The receiver then filed a motion to approve sale of the property that appellants contended was owned by TCSM. In response, appellants filed a motion objecting to the sale. Appellants did not assert that the procedure followed at the evidentiary 13

The trial court summarized Mitchell’s testimony regarding her ownership of TCSM as follows: THE COURT: All right. If I heard the testimony correct, the Court is to believe that someone who didn’t have any formal education or training purchased a business; didn’t describe how she obtained, you know, approximately a hundred thousand dollars in funds to fund a business but that she purchased a business that she had never been in before for a hundred thousand dollars; subsequent to that purchased a 2011 Ford, relatively new, and in 2012 purchased a 2009 Bentley for over a hundred thousand dollars, as well, if the evidence that presented by you is to be believed. Is that correct? Did I summarize it correctly? MR. PARDO: Yes, Your Honor. THE COURT: Okay. The Motion is denied. 20 APP'X28

hearing deprived them of due process or that the evidence was insufficient to support the trial court’s orders. Nor do they raise any such issue on appeal. Instead, appellants repeated the same arguments made in prior filings. The court granted the receiver’s motion and signed the order of sale on June 2, 2015. We conclude that given appellants’ intervention in the turnover proceeding, due process did not require appellants to be served. We overrule appellants’ third and fourth issues. III.

Mitchell and TCSM are not entitled to mandamus relief from the trial court’s orders adopting the first and second master’s reports. Mitchell and TCSM did not timely appeal the trial court’s orders adopting

the first and second master’s reports, which is not surprising given that they had not yet filed any motions or intervened at the time those orders were signed. Instead, after noticing their appeal, Mitchell and TCSM filed a motion to set aside the master’s reports, which the trial court denied. In their petition for writ of mandamus, relators Mitchell and TCSM argue that the trial court’s orders adopting both reports are void because the reports affected relators’ rights at a time when the court had no jurisdiction over relators or their property. Relators ask that we order the trial court to set aside the master’s reports or, in the alternative, grant their motion to set aside the reports. A.

Mandamus standard

Mandamus is appropriate when the relator demonstrates that the trial court clearly abused its discretion and there is no adequate remedy by appeal. In re Eurecat US, Inc., 425 S.W.3d 577, 582 (Tex. App.—Houston [14th Dist.] 2014, orig. proceeding). Mandamus review of legal issues is not deferential. A trial court abuses its discretion if it clearly fails to analyze the law correctly or apply the law to the facts of the case. See In re Cerberus Capital Mgmt. L.P., 164 S.W.3d 21 APP'X29

379, 382 (Tex. 2005) (orig. proceeding). Signing a void order is a clear abuse of discretion, and a relator is entitled to mandamus relief from such an order without establishing the lack of an adequate appellate remedy. In re Stern, 436 S.W.3d 41, 46 (Tex. App.—Houston [14th Dist.] 2014, orig. proceeding). B.

The trial court did not clearly abuse its discretion by denying the motion to set aside the master’s reports.

Relators Mitchell and TCSM argue in two issues that the trial court had no jurisdiction to adopt master’s reports affecting their rights because they were not parties at the time, there were no pleadings against them, and no separate trial was held. Relators contend that the January 2, 2014 order adopting the first master’s report and the September 5, 2014 order adopting the second master’s reports are therefore void, and the trial court clearly abused its discretion in denying their motion to set aside the orders. We conclude, however, that the trial court orders adopting the master’s reports are not void. An order or judgment is void only when it is apparent that the court rendering it had no jurisdiction of the parties, no jurisdiction of the subject matter, no jurisdiction to enter the judgment, or no capacity to act as a court. Mapco, Inc. v. Forrest, 795 S.W.2d 700, 703 (Tex. 1990) (orig. proceeding). The parties do not dispute that the trial court had jurisdiction over George throughout the turnover proceedings. As explained in Part II.B. above, the turnover orders and the first two master’s reports—which led to the September 24, 2014 order of sale “subject to third parties’ rights”—did not bind third parties Mitchell or TCSM. See Bay City Plastics, 106 S.W.3d at 325. Only after they intervened and asserted claims to property did the trial court rule on their claims, which it had jurisdiction to do. See Part II.C., infra. Because the orders adopting the first two master’s reports are not void, the 22 APP'X30

trial court did not clearly abuse its discretion in denying relators’ motion to set those orders aside. Accordingly, we hold that relators failed to establish their entitlement to mandamus relief and overrule their two issues. CONCLUSION We affirm the orders of April 14 and June 2, 2015, and we deny the petition for writ of mandamus.

/s/

J. Brett Busby Justice

Panel consists of Justices Jamison, Busby, and Wise.

23 APP'X31

March 30, 2017

JUDGMENT

The Fourteenth Court of Appeals JENNIFER MITCHELL AND TCSM, LLC, Appellants NO. 14-15-00417-CV

V.

TURBINE RESOURCES UNLIMITED, INC. AND TOM GEORGE & INTERNATIONAL A., INC., Appellees

________________________________ This cause is a consolidated appeal from two orders by the trial court in a post-judgment receivership proceeding. The first order, signed April 14, 2015, denied appellant’s fourth motion to modify court orders and emergency motion for reconsideration. The second order, signed June 2, 2015, approved the sale of property. This cause was heard on the transcript of the record. We have inspected the record and find no error in the judgment. We order the post-judgment orders below AFFIRMED. We order appellants, Jennifer Mitchell and TCSM, LLC, jointly and severally, to pay all costs incurred in this appeal. We further order this decision certified below for observance.

APP'X 32