HSM Development, Inc. v. Barclay Properties, Ltd.
392 S.W.3d 749
| Tex. App. | 2012Background
- Barclay Properties, Ltd. sued HSM Development, Inc. and a jury found HSM liable for negligent misrepresentation in December 2009.
- Judgment awarded Barclay $334,471.89 in damages and costs; HSM did not appeal the judgment.
- Barclay sought post-judgment turnover relief on August 13, 2010, requesting turnover of HSM stock and related litigation rights.
- Barclay submitted no evidence supporting turnover beyond the judgment and order denying HSM’s motion to disregard; sanctions motion against HSM’s president was filed on August 18, 2010.
- During the August 31, 2010 hearing, the court deemed the sanctions motion within its jurisdiction and then granted the turnover request, despite Barclay offering no proof of HSM owning encumberable assets.
- This Court later vacated the turnover order as an abuse of discretion and remanded the case, noting no evidence was presented to show HSM owned property or rights subject to turnover.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether turnover was proper under §31.002 | Barclay: assets exist and are reachable | HSM: no proof assets owned by debtor | Turnover improperly granted; abuse of discretion |
| Whether the court could rely on materials outside Barclay's turnover application | Barclay: evidence from sanctions could be considered | Evidence from sanctions not admissible for turnover | Court abused discretion by not considering required evidence |
| Whether any other evidence supported turnover apart from the judgment | Barclay relied on judgment and related orders | No independent evidence of property or rights | No evidentiary basis; turnover not supported |
Key Cases Cited
- In re C.H.C., 290 S.W.3d 929 (Tex.App.-Dallas 2009) (abuse-of-discretion standard for turnover orders)
- Sutiles v. Vestin Realty Mortg. I, Inc., 317 S.W.3d 412 (Tex.App.-Houston [1st Dist.] 2010) (elements of turnover under §31.002)
- Eu ropa Int'l Ltd. v. Direct Access Trader Corp., 315 S.W.3d 654 (Tex.App.-Dallas 2010) (construction of property for turnover proceedings)
- McCain v. NME Hospitals, Inc., 856 S.W.2d 751 (Tex.App.-Dallas 1993) (evidence requirements for turnover orders)
- Delgado v. Kitzman, 793 S.W.2d 332 (Tex.App.-Houston [1st Dist.] 1990) (limits of considering ancillary motions in turnover rulings)