First State Bank Central Texas// Cross-Appellant,Lakeway Regional Medical Center Development, LLC v. Lakeway Regional Medical Center Development, LLC Security State Bank & Trust Daniel J. Brouillette and Robert Gerald Call// Cross-Appellee, First State Bank Central Texas
03-13-00058-CV
Tex. App.Feb 20, 2014Background
- FSB obtained a $3.1 million agreed judgment against Brouillette in Bell County; Brouillette had an ownership interest in Lakeway.
- FSB filed a post-judgment garnishment in Travis County seeking Brouillette’s assets in Lakeway’s possession.
- Lakeway answered that it had no indebtedness to Brouillette or his property; Lakeway later transferred $698,419.15 to Security State Bank.
- FSB contended the funds were Brouillette’s share of Lakeway’s development proceeds and that Lakeway’s answer was falsely stating no possession.
- Lakeway argued Brouillette assigned the funds to Security State before judgment and that the funds belonged to Security State under a security agreement.
- Lakeway filed a motion to dismiss for lack of jurisdiction; the district court dismissed the garnishment but awarded no costs; both sides appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the garnishment court had subject-matter jurisdiction | FSB argues the garnishment court had jurisdiction; King/King governs. | Lakeway argues the garnishment is the wrong forum; Bell County court has exclusive jurisdiction. | FSB’s first issue is overruled; garnishment jurisdiction lies with the court that issued the judgment. |
| Whether the conspiracy-to-defraud claim could proceed despite lack of garnishment jurisdiction | FSB asserts its tort claim is independent and valid even if garnishment is improper. | Lakeway contends lack of garnishment jurisdiction also defeats related claims. | FSB’s conspiracy-to-defraud claim survives as an independent suit despite garnishment dismissal. |
| Whether Lakeway is entitled to costs or sanctions given dismissal for lack of jurisdiction | FSB argues Rule 677 or Rule 13 sanctions may govern; costs may not be awarded. | Lakeway seeks costs under Rule 677 or sanctions for a groundless suit. | Rule 677 does not mandate costs for lack of jurisdiction; Rule 13 sanctions may be considered on remand. |
Key Cases Cited
- King v. Porter, 252 S.W. 1022 (Tex. 1923) (garnishment jurisdiction is vested in the court that rendered the original judgment)
- Kelly v. Gibbs, 19 S.W. 563 (Tex. 1892) (garnishment remains ancillary to the main action)
- Baca v. Hoover, Bax & Shearer, 823 S.W.2d 734 (Tex. App.—Houston [14th Dist.] 1992) (garnishment is ancillary; jurisdiction follows underlying suit)
- Williams v. National Mortgage Co., 903 S.W.2d 398 (Tex. App.—Dallas 1995) (separate independent claim may proceed despite related suit status)
- Nausler v. Coors Brewing Co., 170 S.W.3d 242 (Tex. App.—Dallas 2005) (fees may be awarded to prevailing party under rule 677 in appropriate circumstances)
- Spector Gadon & Rosen, P.C. v. Southwest Securities, Inc., 372 S.W.3d 244 (Tex. App.—Dallas 2012) (clarifies application of Rule 677 in garnishment contexts)