Buster Fitzgerald v. Tyler National Bank
12-16-00338-CV
| Tex. App. | Oct 18, 2017Background
- Cadle Company (assignee to Tyler National Bank) obtained an agreed judgment against Buster Fitzgerald in 1988 and sought collection in 2016 by filing an application for a turnover order.
- Cadle asked the court to order Fitzgerald to turn over royalty payments from a mineral lease on property at 13745 FM 315 N, Chandler, Texas.
- The trial court granted the turnover application without a hearing and ordered Fitzgerald to deliver past and future royalties and to make broad disclosures and monthly accountings.
- Fitzgerald moved to vacate, arguing the Chandler property is his homestead and the royalties are exempt proceeds, and that disclosure/accounting requirements exceeded the turnover statute’s scope.
- At the motion hearing counsel stipulated on the record that the Chandler property and the mineral interests were on Fitzgerald’s homestead.
- The trial court denied the motion to vacate; on appeal the court of appeals held the stipulation established the homestead status, the royalties are exempt proceeds not subject to turnover, and the disclosure/accounting provisions exceeded the court’s authority as applied here.
Issues
| Issue | Plaintiff's Argument (Fitzgerald) | Defendant's Argument (Cadle) | Held |
|---|---|---|---|
| Whether the turnover order was supported by evidence | Royalties are proceeds of homestead minerals and exempt from turnover; trial court lacked evidence of nonexempt property | Cadle argued Fitzgerald failed to prove exemption and that royalties are personal property not exempt | Court held parties’ on‑the‑record stipulation established homestead mineral ownership; royalties are exempt proceeds and turnover was improper |
| Whether proceeds from homestead minerals are subject to turnover | Proceeds from homestead minerals are protected by homestead exemption and §31.002(f) (no turnover of exempt property or its proceeds) | Cadle contended royalties are personal property and not covered by turnover exemption | Court held homestead exemption extends to minerals under the surface; proceeds from those minerals are exempt from turnover |
| Whether the turnover order could compel extensive disclosures and monthly accountings | Order exceeded §31.002 because it required disclosure of future assets and creation of documents tied to no nonexempt property | Cadle argued court may order accountings and other means to reach property under the turnover statute | Court held disclosure/accounting provisions were improper here because they related solely to the exempt royalties and no evidence of other nonexempt assets existed |
| Whether lack of a hearing on Cadle’s initial turnover application was reversible error | (Raised as issue on appeal) Trial court should have held hearing before granting turnover | Cadle relied on the court’s authority to issue turnover relief; no specific argument recorded in opinion | Court did not reach this issue after resolving exemption and disclosure issues (remanded for further proceedings consistent with opinion) |
Key Cases Cited
- Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223 (Tex. 1991) (standard of review for turnover orders and inquiry whether evidence supports exercise of discretion)
- Burns v. Miller, Hiersche, Martens & Hayward, P.C., 948 S.W.2d 317 (Tex. App.—Dallas 1997) (turnover statute authorizes compelling documents/accountings as "other means" to reach property)
- HSM Dev., Inc. v. Barclay Props., Ltd., 392 S.W.3d 749 (Tex. App.—Dallas 2012) (creditor must show debtor owns property sought in turnover)
- Newman v. Toy, 926 S.W.2d 629 (Tex. App.—Austin 1996) (monthly accountings can be within turnover relief when necessary to effectuate collection)
- Amoco Prod. Co. v. Tex. Elec. Serv. Co., 614 S.W.2d 194 (Tex. Civ. App.—Houston) (stipulations bind parties and the court when clear)
- Valdes v. Moore, 476 S.W.2d 936 (Tex. Civ. App.—Houston) (judicial admissions eliminate necessity of proof)
- Mitchell v. Geo–Western Petroleum Dev., Inc., 717 S.W.2d 734 (Tex. App.—Waco) (parties may stipulate facts and bound thereby)
- Ex parte Johnson, 654 S.W.2d 415 (Tex. 1983) (turnover relief historically included ordering accounting and return of items)