Case Updates from the Fourteenth Court of Appealsby Kyle Lawrence, Beck Redden LLP
Hamilton Metals, Inc. v. Global Metal Services, Ltd., — S.W.3d –, 2018 WL 6174321, No. 14-17-00670-CV (Tex. App.—Houston [14th Dist.] Nov. 27, 2018, no pet. h.)
The Texas “turnover” statute (Civil Practice and Remedies Code § 31.002) authorizes certain relief if the judgment debtor “owns property” that “cannot readily be attached or levied on by ordinary legal process” and “is not exempt from attachment, execution, or seizure for the satisfaction of liabilities.”
After obtaining a money judgment against Hamilton Metals, Global Metal Services filed an application for turnover relief and the appointment of a receiver under the turnover statute. Global asserted that it had already tried to collect on the judgment by attempting to contact Hamilton, recording abstracts of judgment in various counties’ real property records, and initiating a garnishment proceeding against a bank holding three accounts in Hamilton’s name, but that none of these efforts were successful. The trial court issued an order appointing a receiver, giving the receiver the power to take possession of Hamilton’s property, and commanding Hamilton to turn over various financial instruments and documents.
Hamilton appealed the order, arguing that Global failed to present evidence that Hamilton owned property subject to turnover. Relying on its CEO’s affidavit submitted in response to Global’s turnover application, Hamilton contended that all of its assets had been liquidated in a foreclosure sale.
The court of appeals presumed without deciding that Global presented evidence of two categories of property owned by Hamilton: (1) a schedule of “Excluded Assets” that were not subject to the foreclosure sale, and (2) the bank accounts in Hamilton’s name. Nevertheless, the court determined that there was no evidence that either type of property could not readily be attached or levied on by ordinary legal process.
As to the Excluded Assets, the court observed that Global did not conduct any post-judgment discovery or submit any affidavit testimony concerning the Excluded Assets. The court further noted that Global did not allege that a writ of execution had been requested, issued, or unsuccessfully sought to be enforced.
Furthermore, the court concluded, there was no evidence that funds in the bank accounts could not readily be attached or levied on by ordinary legal process. Rather, the evidence showed that the accounts were already the subject of a garnishment proceeding. Although Global asserted that the proceeding had not been successful, the court noted that no evidence addressed the status of the proceeding or the likelihood that the proceeding would ultimately lead to the recovery of money.
Accordingly, the court held that the trial court abused its discretion by issuing the turnover and receivership order.
Landry’s, Inc. v. Animal Legal Defense Fund, No. 14-17-00207-CV, 2018 WL 5075116 (Tex. App.—Houston [14th Dist.] Oct. 18, 2018, no pet. h.)
In this appeal of an anti-SLAPP dismissal and corresponding sanctions award, a divided panel of the Fourteenth Court of Appeals outlined the standard for determining the appropriate amount of mandatory sanctions under the Texas Citizens Participation Act. The panel majority held that the trial court abused its discretion by imposing monetary sanctions greater than the award of attorney’s fees, which was the “only monetary guidepost in evidence.”
The underlying suit concerned Cheryl Conley’s notice of intent to sue Landry’s under the Endangered Species Act—and other public statements related to the planned suit–for the allegedly inadequate care of four white tigers. After Landry’s sued Conley, her attorney, and the attorney’s employer (the Animal Legal Defense Fund) for the publications, the Defendants moved to dismiss under the Texas Citizens Participation Act.
The trial court granted the Defendants’ motion to dismiss and awarded trial attorney’s fees: $71,295 to Conley and $103,191.26 to ALDF. The trial court also ordered Landry’s to pay sanctions: $200,000 to Conley and $250,000 to ALDF.
On appeal, Landry’s argued (among other things) that the sanctions award of $450,000 was excessive. The court of appeals agreed that the amount of sanctions was excessive. The panel split, however, as to the amount of remittitur.
Recognizing that the “TCPA does not expressly list the guideposts” by which the amount of sanctions is determined, the majority analogized to the factors for assessing sanctions for frivolous pleadings under Chapter 10 of the Civil Practice and Remedies Code. After concluding that the evidence supported some amount of sanctions under this analysis, the majority looked to “two case-specific monetary guideposts that are objectively quantifiable” to establish a “specific figure, beyond which the sanctions become excessive: (1) the amount of attorney’s fees, and (2) the number of similar actions by Landry’s in the past. Because Landry’s had never filed a similar action, the majority held that the trial court abused its discretion by imposing sanctions in an amount more than twice as large as the award of attorney’s fees—the “only monetary guidepost in evidence.” Accordingly, the majority suggested a remittitur to make the sanctions equal to the attorney’s fees.
Justice Jewell dissented from the analysis of the sanctions award. To begin, he criticized the analogy of the TCPA to Chapter 10, because the latter “explicitly contemplates a punitive component to sanctions,” while the TCPA “does not.” But even assuming the Chapter 10 analysis controlled, he would have held that the evidence was insufficient to support more than a “nominal sum” of sanctions.