Carolyn Gerdes v. John Kennamer, Mora Kennamer, and Laguna Vista International, Inc. ( 2007 )

NUMBER 13-06-175-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

CAROLYN GERDES, Appellant,

v.

JOHN KENNAMER, MORA

KENNAMER, AND LAGUNA

VISTA INTERNATIONAL, INC., Appellees.

On appeal from the 23rd District Court of Matagorda County, Texas.

MEMORANDUM OPINION

Before Justices Yañez, Benavides and Vela Memorandum Opinion by Justice Vela

Carolyn Gerdes, appellant, appeals an order issued pursuant to section 31.002 of the Texas Civil Practice and Remedies Code, ordering the Matagorda County District Clerk to deliver a cash deposit to John Kennamer ("Kennamer"), one of the appellees, to be applied as a credit on a debt owed by Roger Gerdes, Jr., appellant's husband. Tex. Civ. Prac. & Rem. Code Ann. § 31.002 (Vernon Supp. 2006). ⁽¹⁾ The court also awarded appellees' counsel attorneys' fees. By one issue, appellant complains that the trial court abused its discretion in ordering the turnover of the cash deposit because appellees failed to meet the procedural requirements of the statute. We agree and reverse and remand the case to the trial court.  

I.

BACKGROUND

The underlying case arose from a claim that Roger Gerdes, appellant's husband, breached his fiduciary duty to appellee, John Kennamer, while operating a hunting lodge for Kennamer in Mexico. There were additional claims of conversion, fraud and conspiracy to defraud. Gerdes v. Kennamer, 155 S.W.3d 523 (Tex. App.-Corpus Christi 2004, pet. denied). The trial court entered a final judgment on July 31, 2002, awarding Kennamer $915,392.65 against Roger Gerdes. The final judgment also awarded appellant $22,484.93 based on quantum meruit. Certain awards were offset in the judgment, but the award in favor of appellant was not offset.

Both sides appealed the judgment to this Court. Kennamer filed a cash deposit to suspend the enforcement of the portion of the final judgment against him and in favor of appellant. Roger Gerdes did not supersede the judgment against him. This Court affirmed the final judgment on December 6, 2004. ⁽²⁾ The Texas Supreme Court denied the Gerdeses' motion for rehearing of the denial of the petition for review on December 9, 2005. The judgment in Kennamer's favor was affirmed. Likewise, appellant's judgment against Kennamer was affirmed which would allow her to satisfy her judgment from the proceeds of the cash deposit.

Through this turnover order Kennamer sought to use the funds he deposited to supersede the judgment toward the debt owed to him by Roger Gerdes. The parties have brought several actions related to Kennamer's attempts to satisfy the judgment in his favor. ⁽³⁾ Roger Gerdes has been incarcerated due to his failure to comply with previous court orders.

In the appeal now before the Court, Carolyn Gerdes contests the procedural mechanism used by Kennamer to attempt to retrieve the cash deposit he made in the underlying appeal and to utilize that amount in partial satisfaction of the debt appellant's husband owes to him.

II.

AUTHORITIES

Kennamer brought this action pursuant to Texas Civil Practice and Remedies

Code section 31.002(a) which provides, in part:

(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 (Vernon Supp. 2006).

The trial court's judgment is reviewed under an abuse of discretion standard. Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991). An abuse of discretion occurs when the trial court acts without reference to any guiding rules and principles. Id. Whether there is evidence to support the turnover award is a relevant consideration in determining if the trial court abused its discretionary authority in issuing the order. Id.

The statute may be used when non-exempt property cannot be readily attached or levied. Childre v. Great Southwest Life Ins. Co., 700 S.W.2d 284, 288 (Tex. App.-Dallas 1985, no writ). It is the judgment creditor's burden to show that the property cannot be readily attached or levied on by ordinary legal process. Clayton v. Wisener, 169 S.W.3d 682, 684 (Tex. App.-Tyler 2005, no pet.). A creditor does not meet its evidentiary burden under the statute when the creditor provides no evidence of the necessary facts. See Main Place Custom Homes, Inc. v. Honaker, 192 S.W.3d 604, 628 (Tex. App.-Fort Worth 2006, pet. denied).

III.

ANALYSIS

Counsel for Kennamer offered no evidence at the turnover hearing. In fact, counsel told the court that the turnover motion would allow the court "in any easy step, what I think we could accomplish anyway, in a couple of step process..." He further informed the court that he was trying to accomplish in a practical way what he could accomplish in another way through other procedural devices. Motions and arguments of counsel are not evidence. Clayton, 169 S.W.3d at 684.

Kennamer not only failed to introduce evidence to establish that the funds in question could not be levied or attached by ordinary legal process, he suggests in his argument that the funds in question could be attached by ordinary legal process. Absent evidence to support the required element that the property cannot be readily attached or levied by ordinary legal process, we believe that the trial court abused its discretion in ordering the cash to be released pursuant to the turnover statute. Although the trial court was clearly familiar with the underlying issues because of the many attempts of Gerdes to thwart collection of appellees' judgment, we do not find this knowledge to be a substitute for evidence supporting the specific statutory elements. While we do not necessarily disagree with Kennamer's arguments that the trial court could have offset the award in the final judgment and may have had inherent power to accomplish what it did, these arguments are not persuasive in view of appellees' pleadings which clearly request relief and attorneys' fees based specifically on the turnover statute.

We sustain appellant's issue and reverse and remand to the trial court for proceedings consistent with this opinion.

ROSE VELA

Justice

Memorandum Opinion delivered and

filed this 5^th day of April, 2007.

1.

The style of the case lists John Kennamer, Mora Kennamer and Laguna Vista International, Inc. as plaintiffs. The turnover application suggests that it is only brought by John Kennamer.

2.

Gerdes v. Kennamer, 155 S.W.3d 523 (Tex. App.-Corpus Christi 2004, pet. denied)

3.

The proceedings were docketed as follows:

(1) No. 13-02-00657-CV (appeal of final judgment),

(2) No. 13-03-00046-CV (appeal of turnover order),

(3) No. 13-03-00297-CV (petition for writ of mandamus),

(4) No. 13-03-00537-CV (petition for writ of habeas corpus),

(5) No. 13-03-00584-CV (petition for writ of habeas corpus),

(6) No. 13-04-00427-CV (appeal of turnover order),

(7) No. 13-05-00172-CV (appeal from denial of recusal),

(8) No. 13-05-00198-CV (appeal from contempt order), and

(9) No. 13-05-00487-CV (petition for writ of habeas corpus).