in Re Lorie A. Pfeil and Pfeil Fitness, Inc. ( 2015 )

ACCEPTED
01-15-00433-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
5/12/2015 10:21:11 AM
CHRISTOPHER PRINE
CLERK
CASE NO. 01–15–00433–CV
FILED IN
1st COURT OF APPEALS
HOUSTON, TEXAS
IN THE FIRST COURT OF APPEALS,
5/12/2015 10:21:11 AM
HOUSTON, TEXAS CHRISTOPHER A. PRINE
_____________________________________________ Clerk
IN RE LORIE A. PFEIL AND PFEIL FITNESS, INC., Relators
_____________________________________________
Original Proceeding from the
County Court at Law Number Three, Harris County, Texas
Trial Court Cause Number 791725
_____________________________________________
MOTION TO STAY POST–JUDGMENT DISCOVERY
LEYH, PAYNE & MALLIA, PLLC
Sean M. Reagan
Texas Bar No. 24046689
sreagan@lpmfirm.com
9545 Katy Freeway, Suite 200
Houston, Texas 77024
(713) 785-0881
(713) 784-0338 (Fax)
Counsel for Relators, Lorie A. Pfeil and Pfeil Fitness, Inc.
TO THE HONORABLE FIRST COURT OF APPEALS:
Lorie A. Pfeil and Pfeil Fitness, Inc. move to stay any post–judgment
discovery that real–party–in–interest Carlyle/FR Houston Investors, L.P. is
attempting to conduct or will attempt to conduct in Cause No. 791725.
Carlyle/FR Houston Investors has propounded written post–judgment
discovery on both Pfeil and Pfeil Fitness which are due this month (May 13
and May 20), and obtained an order compelling Pfeil to appear for a
deposition by May 13. But Carlyle/FR Houston Investors has no right or
authority to conduct such post–judgment discovery because (1) it claims to
have assigned away all of its interest in the judgment at issue and (2) it hasn’t
existed as a legal entity for more than five years.
A. Background
Carlyle/FR Houston Investors obtained a judgment against Pfeil
Fitness and Lorie Pfeil in February 2006. (MR 2). On April 13, 2015,
Carlyle/FR Houston Investors propounded post–judgment discovery
requests on Pfeil and noticed her deposition, along with a subpoena duces
tecum. (MR 3, 4, 5). A week later, Carlyle/FR Houston Investors propounded
post–judgment discovery upon Pfeil Fitness. (MR 6). Pfeil timely quashed
the deposition. (MR 7). Carlyle/FR Houston Investors responded by filing a
motion to compel and a motion for sanctions. (MR 8). Pfeil replied by filing a
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supplemental motion to quash and response to the motion to compel
asserting that Carlyle/FR Houston Investors had no right to conduct any
discovery because it had not existed since 2009. (MR 9).
The parties attended a hearing on the motions on April 29, 2015. At the
hearing, Carlyle/FR Houston Investors’ counsel did not dispute that his
client’s legal existence terminated in 2009. Rather, he produced a purported
assignment in which Carlyle/FR Houston Investors allegedly assigned “all of
its right, title, and interest” in its judgment against Pfeil to a third party. (MR
10). Carlyle/FR Houston Investors’ counsel curiously claimed that the
assignment—which assigned away any interest his client may have had in the
judgment at issue—gave his client the right to conduct post–judgment
discovery. (See MR 11). The trial court agreed with Carlyle/FR Houston
Investors and stated that it was entitled to hire someone to collect its
judgment even though it didn’t exist.
So, despite the undisputed facts that (1) Carlyle/FR Houston Investors
purportedly assigned all of its interest in judgment, and (2) Carlyle/FR
Houston Investors hadn’t existed as a legal entity since 2009, the trial court
granted Carlyle/FR Houston Investors’ motion to compel and ordered Pfeil to
appear for a deposition within 14 days of the court’s order. (MR 1).
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B. Relators are entitled to a stay of all post–judgment
proceedings so that the Court can decide the petition for
writ of mandamus.
Texas Rule of Appellate Procedure 52.10 allows this Court to stay “any
underlying proceeding” pending this Court’s action on a mandamus
petition. Relators ask this Court to stay the arbitration proceedings while it
considers their mandamus petition.
Carlyle/FR Houston Investors claims that it “assign[ed] all of its right,
title, and interest” in the judgment at issue to a third party. (MR 10, 11).
Because Carlyle/FR Houston Investors claims to have assigned all of its
interest in the judgment at issue, it has no right to conduct post–judgment
discovery. Arthur v. Driver, 127 S.W. 891, 891 (Tex. Civ. App. 1910) (“the
owner of the judgment has exclusive control over its collection.”). Rather, the
purported assignee, as the current owner of the judgment, has the “exclusive
control” and “dominion” over the collection of the judgment at issue. Id.; see
also, River Consulting, Inc. v. Sullivan, 848 S.W.2d 165, 169 (Tex. App.—
Houston [1st Dist.] 1992, writ denied) (assignor who fully transferred all
rights and interests in causes of action had no right or interest in a suit that
sought to recover on the causes of action assigned); see also, Gulf Ins. Co. v.
Burns Motors, Inc., 22 S.W.3d 417, 420 (Tex. 2000) (an assignee stands in
the shoes of the assignor and may assert those rights that the assignor could
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assert); Jackson v. Thweatt, 883 S.W.2d 171, 175 (Tex. 1994) (“[A]n assignee
receives the full rights of the assignor *** .”).
Additionally, Carlyle/FR Investors hasn’t existed as a legal entity since
2009. Thus, it has no authority to conduct post–judgment discovery. See TEX.
BUS. ORG. CODE § 11.356(a) (terminated entity continues to exist for three
years after termination so it can prosecute a claim).
Thus, rather than having Relators respond to post–judgment
discovery—including appearing for a deposition—from a defunct entity that
claims to have assigned all of its interest in the very judgment it now seeks to
enforce, the Court should issue a stay. A stay would prevent Relators from
incurring unnecessary fees and costs and from wasting valuable time and
resources in what amounts to an exercise in futility.
C. Prayer
FOR THESE REASONS, Relators requests that the Court grant their
motion to stay and stay all post–judgment discovery in the underlying
proceeding while the Court considers their mandamus petition.
{Signature on next page}
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Respectfully submitted,
LEYH, PAYNE & MALLIA, PLLC
By: /s/ Sean M. Reagan
Sean M. Reagan
sreagan@lpmfirm.com
Texas Bar No. 24046689
9545 Katy Freeway, Suite 200
Houston, Texas 77024
Telephone: 713-785-0881
Facsimile: 713-784-0884
ATTORNEY FOR RELATORS
Certificate of Service
I certify that a true and correct copy of this document has been served
under the Texas Rules of Civil Procedure to all interested parties of record
on this the 12th day of May 2015:
Richard T. Howell, Jr. Via Email and facsimile
Buckley, Mathews, White & Howell, LLP
2401 Fountainview, Suite 1000
Houston, Texas 77057
Honorable Linda Storey Via U.S. Mail
County Court at Law Number Three
of Harris County, Texas
201 Caroline, 5th Floor
Houston, Texas 77002
/s/ Sean M. Reagan
Sean M. Reagan
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Certificate of Conference
I conferred with counsel for Carlyle/FR Houston Investors, LP
regarding whether his client is opposed to this motion to stay. Carlyle/FR
Houston Investors is opposed.
/s/ Sean M. Reagan
Sean M. Reagan
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