George O. Zenner, Jr., Tommye H. Zenner, Thomas H. Zenner and Meredith Ellen McConn v. Lone Star Striping and Paving, LLC
2012 Tex. App. LEXIS 2462
| Tex. App. | 2012Background
- Lone Star obtained a $1,022,606 default judgment in 2005 against Eric Zenner, the Zenner Family Trust, and related entities, plus prejudgment interest and fees.
- The Zenner Family Trust owned a Galveston beach house; the house was deeded to the Trust in November 2001 by MKZ Land, L.P.
- In 2003 the Trust mortgaged the beach house for $400,000 and sold the property in 2004; proceeds were placed in a Compass Bank account in the Trust’s name.
- Between 2003–2004, George Zenner distributed funds from the Trust to family members and used proceeds to satisfy Eric Zenner’s debts; the Trust account was closed in January 2005.
- Lone Star learned of the Trust’s existence in 2004 and the beach house’s transfer and sale by 2005, but did not pursue asset-disposition information at that time.
- Lone Star sued the Zenners in May 2009 alleging TUFTA violations based on transfers and disbursements occurring before January 10, 2005; trial court found in Lone Star’s favor but applied TUFTA discovery-rule tolling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does TUFTA's discovery rule toll accrual for the four-year repose? | Lone Star argues discovery delayed accrual under TUFTA. | Zenners contend discovery rule does not apply to toll the four-year period. | Discovery rule does not toll accrual; claims barred by four-year repose. |
| Did Lone Star reasonably discover the TUFTA claims within four years after transfers? | Lone Star could not have discovered proceeds disposition earlier. | Lone Star had knowledge by 2004–2005 of the trust, transfer, and sale, triggering inquiry. | Lone Star should have discovered within four years; discovery rule not applicable. |
Key Cases Cited
- Cadle Co. v. Wilson, 136 S.W.3d 345 (Tex. App.—Austin 2004) (discovery rule did not apply where earlier facts prompted inquiry)
- Duran v. Henderson, 71 S.W.3d 833 (Tex. App.—Texarkana 2002) (discovery rule tolling in limited circumstances)
- Johnston v. Crook, 93 S.W.3d 263 (Tex. App.—Houston [14th Dist.] 2002) (discovery-rule considerations in TUFTA context)
- Wagner & Brown Ltd. v. Horwood, 58 S.W.3d 732 (Tex. 2001) (discovery rule framework from common law applied to TUFTA)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (credibility and sufficiency standards for bench trials)