Steven Spiritas, Individually and as Trustee of the Spiritas SF 1999 Trust, Spiritas Ranch Enterprises, LLP, and J. Spiritas Land & Cattle Company v. Susan Davidoff, Individually and as Trustee of the Spiritas SC 1999 Trust
459 S.W.3d 224
| Tex. App. | 2015Background
- SRE (Spiritas Ranch Enterprises, LLP) owns ~745 acres; SRE and JSLC are equally owned (50/50) by Steven Spiritas and Susan Davidoff (each also trustees of respective family trusts). JSLC operates a cattle business on SRE property.
- Davidoff sought court authority (Nov 2013) to sell the property or, alternatively, appointment of a receiver, asserting market interest (letters of intent, MUD approvals) and that Spiritas refused to cooperate, causing a deadlock and risking loss of value.
- Parties submitted affidavits and exhibits by stipulation; three valuation/LOI documents were admitted in camera for general interest but were objected to as hearsay for valuation.
- Trial court (Jan 2, 2014) found no withdrawal by Davidoff, found an event requiring winding up had occurred, found the parties deadlocked, and ordered a receiver to wind up and liquidate SRE and JSLC (appointment effective Feb 4 unless parties agreed a winding-up plan).
- Spiritas appealed interlocutorily under Tex. Civ. Prac. & Rem. Code § 51.014(a)(1), challenging the receiver appointment as unsupported by statutory prerequisites; the court of appeals reversed the receiver portion of the order and remanded.
Issues
| Issue | Plaintiff's Argument (Spiritas) | Defendant's Argument (Davidoff) | Held |
|---|---|---|---|
| Whether trial court abused its discretion by appointing a receiver for SRE and JSLC | No statutory basis or evidentiary support for appointment under the Business Organizations Code; Davidoff failed to prove required elements (danger to property, irreparable injury, deadlock causing irreparable harm, insolvency, or inadequacy of other remedies) | Deadlock between 50/50 owners and evidence of LOIs/market interest showed threatened irreparable injury; court may appoint receiver to wind up or rehabilitate under multiple code provisions | Reversed: record did not show required statutory prerequisites (no evidence of irreparable injury or other bases under §§11.403, 11.404, or 11.405); appointment was unsupported and thus an abuse of discretion |
| Whether winding up/ liquidation was properly ordered (and whether July 30, 2013 letter constituted withdrawal) | Argues appointment and liquidation improper; asserts Davidoff’s alleged withdrawal should instead trigger redemption procedures | Asserts event requiring winding up occurred; therefore receiver or court-appointed person may wind up and liquidate | Not reached by court of appeals (they resolved appeal on first issue and reversed receiver appointment); trial court had found no withdrawal by Davidoff but ordered winding up — appellate court remanded for further proceedings consistent with opinion |
Key Cases Cited
- Bocquet v. Herring, 972 S.W.2d 19 (Tex. 1998) (standard for abuse of discretion/review of trial-court rulings).
- Benefield v. State, 266 S.W.3d 25 (Tex. App.—Houston [1st Dist.] 2008, no pet.) (review standard for receiver appointments).
- Stephens Cnty. v. J.N. McCammon, Inc., 52 S.W.2d 53 (Tex. 1932) (appellate review limited to record before trial court at time of challenged ruling).
- Tanner v. McCarthy, 274 S.W.3d 311 (Tex. App.—Houston [1st Dist.] 2008, no pet.) (appellate courts should not consider evidence presented after entry of the challenged order).
- Art Inst. of Chicago v. Integral Hedging, L.P., 129 S.W.3d 564 (Tex. App.—Dallas 2003, no pet.) (statutory interlocutory appeal provisions are strictly construed).
- Astoria Indus. of Iowa, Inc. v. SNF, Inc., 223 S.W.3d 616 (Tex. App.—Fort Worth 2007, pet. denied) (interlocutory orders appealable under §51.014 cannot be used to bootstrap other nonappealable orders).