Hamilton Metals v. Global Metal Services, Ltd. ( 2019 )

Reversed and Remanded and Opinion on Rehearing filed August 13, 2019.
In The
Fourteenth Court of Appeals
NO. 14-17-00670-CV
HAMILTON METALS, INC., Appellant
V.
GLOBAL METAL SERVICES, LTD., Appellee
On Appeal from the 11th District Court
Harris County, Texas
Trial Court Cause No. 2016-32078
OPINION ON REHEARING 1
In this appeal a judgment debtor challenges the trial court’s order appointing
a receiver under section 31.002(b) of the Texas Civil Practice and Remedies Code.
Because evidence in the record shows that the judgment debtor had certain assets,
we conclude that the trial court did not err in granting the receivership order as to
1
On January 8, 2019, this court granted rehearing, vacated our judgment of November 27, 2018,
withdrew the opinion in this case issued on November 27, 2018, and ordered this case
resubmitted to a panel consisting of Chief Justice Frost and Justices Wise and Zimmerer.
these assets. Likewise, because the evidence does not show that the judgment
debtor owned any other property, we conclude the trial court abused its discretion
in granting the receivership order as to any other assets. We reverse and remand.
I. FACTUAL AND PROCEDURAL BACKGROUND
The trial court rendered a final money judgment on October 2, 2016, in favor
of appellee/plaintiff Global Metal Services, Ltd. and against appellant/defendant
Hamilton Metals, Inc. (“Judgment”). Global initiated a garnishment proceeding
against PNC Bank, N.A., a financial institution holding three accounts in the name
of Hamilton Metals, Inc. (“Hamilton”).
Global filed an “Amended Ex Parte Application for Turnover After
Judgment and for Appointment of Receiver,” asserting that it held and owned the
Judgment. According to Global, before seeking turnover relief Global made
several attempts to contact Hamilton, and Global recorded various abstracts of
judgment in the real property records of various Texas counties. Global also noted
that it had initiated the garnishment proceeding against PNC Bank. Global
asserted that none of these actions resulted in the collection of any money to be
credited against the Judgment. Global noted that it had come to Global’s attention
that some of Hamilton’s assets were pledged in connection with a Revolving
Credit and Security Agreement with PNC Bank. Global stated that this line of
credit “was subsequently foreclosed upon [by PNC Bank] under UCC Article 9
and [Hamilton’s] tangible and intangible assets . . . were made available to third
parties for purchase via private sale and were subsequently sold.” Global asserted
that at the time of the application, these assets were “not believed to be within the
scope of this Application,” but Global stated that it reserved the right to ask the
trial court for additional relief as to these assets. The record does not reflect that
Global ever sought such relief.
2
In its application, Global alleged that, upon information and belief, Hamilton
continues to exist. Global claimed to have made a good faith effort to collect the
Judgment but had been unsuccessful in doing so. Global asserted that Hamilton’s
failure to make any attempt to resolve the matter made it necessary for Global to
seek appointment of a receiver to facilitate the collection of the Judgment. Global
alleged that it had reason to believe that Hamilton, either directly or indirectly
through its Chief Executive Officer, owned property not exempt from attachment,
execution, or seizure for the satisfaction of liabilities and asked the trial court to
appoint a receiver under the Texas turnover statute. See Tex. Civ. Prac. & Rem.
Code Ann. § 31.002 (West, Westlaw through 2017 1st C.S.).
The trial court signed an order appointing a receiver. In the order the trial
court gave the receiver the power to take possession of “any non-exempt property .
. . of [Hamilton] necessary to pay judgments outstanding against [Hamilton],
including, but not limited to” the following:
(1) all documents or records, including financial records, related to
such property that is in the actual or constructive possession or control
of [Hamilton]; (2) all financial accounts (bank accounts), certificates
of deposit, money market accounts, accounts held by any third-party;
(3) all securities; (4) all real property, equipment, vehicles, boats and,
planes; (5) all safety deposit boxes, private storage spaces and vaults;
(6) all cash; (7) all negotiable instruments, including promissory
notes, drafts and checks; (8) causes of action or choices [sic] of
action; (9) contract rights whether present or future; and (10) accounts
receivable.
The trial court gave the receiver the discretion to liquidate any of Hamilton’s non-
exempt property necessary to pay judgments outstanding against Hamilton. The
trial court also ordered Hamilton to turn over to the receiver within five days of
receiving a copy of the order “all checks, cash, securities (stocks and bonds),
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interest in any business and/or partnerships, promissory notes, documents of title
and contracts owned by or in the name of [Hamilton].”
On appeal from the trial court’s order, Hamilton asserts various appellate
arguments in an attempt to show that the trial court abused its discretion in issuing
the receivership order.
II. ISSUE AND ANALYSIS
A. Did the judgment creditor have to prove that the judgment debtor
owned property that could not readily be attached or levied on by
ordinary legal process?
Hamilton asserts that even if Global submitted evidence that Hamilton
owned property, Global did not present evidence that Hamilton owned any
property that could not readily be attached or levied on by ordinary legal process.
Hamilton argues that Global had to make this showing to be entitled to
appointment of a receiver under section 31.002(b).
When Global filed its amended application on May 11, 2017, the turnover
statute provided in pertinent part as follows:
(a) A judgment creditor is entitled to aid from a court of appropriate
jurisdiction through injunction or other means in order to reach
property to obtain satisfaction on the judgment if the judgment debtor
owns property, including present or future rights to property, that:
(1) cannot readily be attached or levied on by ordinary legal
process; and
(2) is not exempt from attachment, execution, or seizure for the
satisfaction of liabilities.
(b) The court may:
(1) order the judgment debtor to turn over nonexempt property that
is in the debtor’s possession or is subject to the debtor’s control,
together with all documents or records related to the property, to a
designated sheriff or constable for execution;
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(2) otherwise apply the property to the satisfaction of the judgment;
or
(3) appoint a receiver with the authority to take possession of the
nonexempt property, sell it, and pay the proceeds to the judgment
creditor to the extent required to satisfy the judgment.
Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 1, 1985 Tex. Gen. Laws 3242,
3269 (amended 2017, 2019) (current version at Tex. Civ. Prac. & Rem. Code Ann.
§ 31.002) (emphasis added). If this statute were to apply, Global would have the
burden of proving that Hamilton owns property that cannot readily be attached or
levied on by ordinary legal process. See Stephenson v. LeBoeuf, No. 14-02-00130-
CV, 2003 WL 22097781, at *2 (Tex. App.—Houston [14th Dist.] Sept. 11, 2003,
no pet.) (mem. op.). Hamilton asserts that this version of the statute applies and
that Global presented no evidence that any of Hamilton’s property could not
readily be attached or levied on by ordinary legal process.
The trial court held a hearing on the amended application on June 5, 2017.
The trial court gave Hamilton time to file a response and did not rule on the
application at the hearing. Hamilton filed a response, and Global filed a reply.
After these events and after Global had submitted all of its evidence but before the
trial court ruled on the application, the Texas Legislature amended section
31.002(a) effective June 15, 2017, by deleting the text emphasized in the statute
quoted above. See Act of May 24, 2017, 85th Leg., R.S., ch. 996, § 1, 2017 Tex.
Sess. Law Serv. 4026, 4026 (eff. June 15, 2017). The trial court signed the order
on July 25, 2017. In the order, the trial court granted the application as of this date,
and the trial court did not state that it considered or ruled on the application before
June 15, 2017 — the statutory amendment’s effective date.
We review the trial court’s interpretation of applicable statutes de novo. See
Johnson v. City of Fort Worth, 774 S.W.2d 653, 655–56 (Tex. 1989). In
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construing a statute, our objective is to determine and give effect to the
Legislature’s intent. See Nat’l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527
(Tex. 2000). If possible, we must ascertain that intent from the language the
Legislature used in the statute and not look to extraneous matters for an intent the
statute does not state. Id. If the meaning of the statutory language is unambiguous,
we adopt the interpretation supported by the plain meaning of the provision’s
words. St. Luke’s Episcopal Hosp. v. Agbor, 952 S.W.2d 503, 505 (Tex. 1997).
We must not engage in forced or strained construction; instead, we must yield to
the plain sense of the words the Legislature chose. See id.
Under the unambiguous language of the amended statute, a judgment
creditor no longer has the burden of proving that a judgment debtor’s property
cannot readily be attached or levied on by ordinary legal process. See Act of May
24, 2017, 2017 Tex. Sess. Law Serv. at 4026. Though Global had this burden
when it applied for the relief, before the trial court ruled on the application the
Legislature amended the statute to remove this burden. See id. The Legislature
stated that the amended statute “applies to the collection of any judgment,
regardless of whether the judgment was entered before, on, or after the effective
date of this Act.” Act of May 24, 2017, 85th Leg., R.S., ch. 996, § 2, 2017 Tex.
Sess. Law Serv. 4026, 4026. The amendment took effect on June 15, 2017. See
Act of May 24, 2017, 85th Leg., R.S., ch. 996, § 3, 2017 Tex. Sess. Law Serv.
4026, 4026. We conclude that the Legislature made this amendment applicable to
judgments entered before the effective date of June 15, 2017, and that the amended
statute applies to all applications considered after that date, even if the application
was filed before the effective date of the statute. See id. Thus, under the amended
statute, Global did not have the burden of proving that property owned by
Hamilton could not readily be attached or levied on by ordinary legal process.
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Instead, Global had to prove only that Hamilton owned property not exempt from
attachment, execution, or seizure for the satisfaction of liabilities. See id.
Hamilton asserts that applying the amended version of section 31.002(a) to
this case would constitute a retroactive application of the amended statute that
would be improper because the Legislature did not clearly provide for a retroactive
application. Hamilton concedes that the amended statute applies to the collection
of the Judgment, but Hamilton asserts that the amended statute does not apply to
applications for relief under section 31.002 that were pending on June 15, 2017.
Applying the amended version of section 31.002(a) to the trial court’s
granting of the application on July 25, 2017, does not amount to a retroactive
application of the amended statute because the trial court’s determination as to
whether Global satisfied its burden of proof under section 31.002(a) occurred after
the effective date of the statute. The Legislature did not provide that the prior
version of the statute would continue in effect and apply to all applications pending
on the statute’s effective date. In addition, it would not be reasonable to construe
the 2017 statute as requiring all pending applicants to refile their applications and
resubmit evidence to obtain the benefit of the lesser burden of proof the 2017
statute provided.
Hamilton also cites various cases decided after the statute’s effective date, in
which the courts of appeals have applied the pre-amendment version of section
31.002(a). See, e.g., Tidwell v. Roberson, No. 14-16-00170-CV, 2017 WL
3612043, at *6 (Tex. App.—Houston [14th Dist.] Aug. 22, 2017, pet. denied).
But, none of the cases Hamilton cites are on point. In most of the cases, the trial
court ruled on the application for relief under section 31.002(a) before the statute’s
effective date. See, e.g., Tidwell, 2017 WL 3612043, at *1. In addition, in none of
these cases did the court address the issue of whether the amended statute applied.
See, e.g., id. at *6–7. Thus, none of these cases stand for the proposition that the
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pre-amendment version of the statute applies to rulings by the trial court issued
after the statute’s effective date. See, e.g., id. at *1, 6–7.
Hamilton asserts that Global waived the applicability of the amended
version of section 31.002(a) by not raising this issue in the trial court. Hamilton
cites a case holding that an appellant failed to preserve error in the trial court on a
complaint the appellant raised on appeal. In this case Global is the appellee, and
we must use the applicable version of section 31.002 in our analysis of Hamilton’s
appellate complaints. When Global filed its amended application, the Legislature
had not yet enacted the statute amending section 31.002(a). See Act of May 24,
2017, 2017 Tex. Sess. Law Serv. at 4026. In any event, Global sought relief under
section 31.002, and the amended version of this statute applied when the trial court
granted Global’s request for relief. In this context, the law did not require Global
to make a specific request that the trial court apply the amended version of section
31.002(a) to get the benefit of this statute in Global’s request for relief.
Hamilton asserts that Global waived the applicability of the amended
version of section 31.002(a) by not raising this issue in its appellee’s brief on
original submission.2 In its appellant’s brief, Hamilton asserted that the trial court
erred in granting relief under section 31.002 because Global did not submit any
evidence to the trial court showing that Hamilton owned any property that could
not readily be attached or levied on by ordinary legal process. Because Hamilton
raised the issue of whether the statute required proof of this point, we cannot
conclude that this issue was not raised on original submission. Though Hamilton,
as appellant, has the burden to show that the trial court erred, Global, as appellee,
need not raise any issue to have this court consider what took place in the trial
court and determine whether Hamilton has shown that the trial court erred. See
2
Global raised this issue in the motion for rehearing that this court granted.
8
Tijerina v. Wysong, No. 14-15-00188-CV, 2017 WL 506779, at *1–2 (Tex. App.—
Houston [14th Dist.] Feb. 7, 2017, no pet.) (mem. op.). If under the applicable law
and the appellate record, an appellant has not shown that the trial court erred, we
may not reverse the trial court’s ruling, even if the appellee filed no brief or filed a
brief that does not present a proper basis for affirming the trial court’s ruling. See
id. A trial court’s issuance of a turnover order will not be reversed for abuse of
discretion if the order is sustainable for any reason, and that reason need not be
contained in the appellee’s brief. Gillet v. ZUPT, LLC, 523 S.W.3d 749, 754 (Tex.
App.—Houston [14th Dist.] 2017, no pet.); Tijerina, 2017 WL 506779, at *1–2.
Under the version of section 31.002(a) that applies to the trial court’s ruling,
Global did not have the burden of proving that any property owned by Hamilton
cannot readily be attached or levied on by ordinary legal process. See Act of May
24, 2017, 2017 Tex. Sess. Law Serv. at 4026. Thus, presuming that Global
presented no evidence to the trial court of any property owned by Hamilton that
cannot readily be attached or levied on by ordinary legal process, this failure does
not show any trial-court error. See id.
B. Did the judgment creditor prove that the judgment debtor owned any
property?
Hamilton also asserts that Global failed to prove that Hamilton owns any
assets. We review a trial court’s order requiring turnover and appointing a receiver
for an abuse of discretion. Gillet, 523 S.W.3d at 753. The trial court abuses its
discretion if it acts in an unreasonable or arbitrary manner. Id. A trial court’s
issuance of a turnover order, even if predicated on an erroneous conclusion of law,
will not be reversed for abuse of discretion if the order can be sustained for any
reason. Id. at 754.
A judgment creditor may pursue turnover relief against a judgment debtor if
the debtor owns property not exempt from attachment, execution, or seizure for the
9
satisfaction of liabilities. See Act of May 24, 2017, 2017 Tex. Sess. Law Serv. at
4026. To get turnover relief, the judgment creditor must carry the burden of
proving that the judgment debtor owns property that is not exempt from
attachment, execution, or seizure for the satisfaction of liabilities. See id.; Gillet,
523 S.W.3d at 757. Simply filing an application or motion for turnover relief does
not suffice; rather, the judgment creditor must submit evidence establishing these
elements. See Shultz v. Fifth Judicial District Court of Appeals at Dallas, 810
S.W.2d 738, 740 (Tex. 1991), abrogated on other grounds by, In re Sheshtawy,
154 S.W.3d 114, 124–25 (Tex. 2004); Gillet, 523 S.W.3d at 757.
Under section 31.002(b), the trial court may order the judgment debtor to
turn over non-exempt property to a designated sheriff or constable for execution,
may otherwise apply the property to satisfy the judgment, or may appoint a
receiver with the authority to take possession of the non-exempt property, to sell it,
and to pay the proceeds to the judgment creditor to satisfy the judgment. See Tex.
Civ. Prac. & Rem. Code Ann. § 31.002(b) (West, Westlaw through 2017 1st C.S.).
A court may enter or enforce an order under section 31.002 that requires the
turnover of nonexempt property without identifying in the order the specific
property subject to turnover. Tex. Civ. Prac. & Rem. Code Ann. § 31.002(h)
(West, Westlaw through 2017 1st C.S.); Gillet, 523 S.W.3d at 754. Moreover,
while there must be some evidence that the judgment debtor has non-exempt
property, section 31.002 does not specify, or restrict, the manner in which evidence
may be received for a trial court to determine whether the conditions of section
31.002(a) exist, nor does the statute require that such evidence be in any particular
form, that the evidence be at any particular level of specificity, or that the evidence
reach any particular quantum before the court may grant aid under section 31.002.
Gillet, 523 S.W.3d at 754. The lack of evidence supporting a turnover order does
not automatically invalidate the order, but is a relevant consideration in
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determining if the trial court abused its discretionary authority in issuing the order.
Id. Even so, under binding precedent from this court, a trial court abuses its
discretion if the court grants turnover relief and appoints a receiver under section
31.002(b) as to property without any evidence that the judgment debtor owns that
property. See id. at 754–57.
1. The Receivership Application
In its receivership application, Global alleged that it in good faith had reason
to believe that Hamilton, either directly or indirectly through its Chief Executive
Officer, owned property that is not exempt from attachment, execution, or seizure
for the satisfaction of liabilities. Global alleged that this property includes the
following:
funds at financial institutions, dividends, stocks, lines of credit,
interest in subsidiaries and/or affiliates, real property, leases, licenses,
permits, contract rights, royalties, patents, trademarks, instruments
(including promissory notes), chattel paper (including electronic
chattel paper), general intangibles relating to accounts, instruments,
drafts and acceptances, credit card receivables arising out of or in
connection with the sale or lease of inventory or the rendition of
services, and all supporting obligations, guarantees and other security
therefor, equipment and fixtures, payment intangibles and all
software, inventory, capital stock, securities, membership interests,
partnership interests, limited liability company interests or other
equity interests of each direct or indirect subsidiary of [Hamilton],
money, investment property, instruments and other property credited
to any subsidiary and/or any subsidiary of such subsidiaries, cash and
cash equivalents of [Hamilton] and any subsidiary, rights of payment
which have been earned under contract rights, commercial tort claims
(whether now existing or hereafter arising), warehouse receipts and
bills of lading, deposit accounts, goods, letters of credit, cash,
certificates of deposit, insurance proceeds (including hazard, flood
and credit insurance), security agreements, eminent domain proceeds,
condemnation proceeds, tort claim proceeds and all supporting
obligations, computers, computer software, computer programs,
proceeds and products of the property, receivables, leasehold interests;
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guarantor rights, title, and interest; merchandise returned or rejected
relating to, or securing, any receivables; all proceeds and products in
whatever form, and all other non-exempt assets (hereinafter “List of
Property”).
Global’s counsel verified the application, stating under oath that “every statement
contained [in the application] is within her personal knowledge as counsel for
[Global] and is true and correct to the best of her knowledge.” Hamilton failed to
get a ruling from the trial court on its objection that Global’s counsel only stated
that each statement is true and correct “to the best of her knowledge.” We presume
that this failure allowed the trial court to consider the application as evidence. In
this verified application, Global’s counsel stated that (1) Global in good faith had
reason to believe that Hamilton owns property not exempt from attachment,
execution, or seizure for the satisfaction of liabilities, including the general
categories of property listed in the application, and (2) the foregoing statement was
true and correct to the best of the knowledge of Global’s counsel.3 These tenuous
statements that to the best of counsel’s knowledge Global had reason to believe
that Hamilton owns property that falls within general categories is not legally
sufficient to support a finding that Hamilton owns property in any of these
categories. See Rohrmoos Venture v. UTSW DVA Healthcare, LLP, No. 16-0006,
2019 WL 1873428, at *24–25 (Tex. Apr. 26, 2019).
2. The Exhibits to Global’s Reply
In its reply to Hamilton’s response in opposition to the application, Global
submitted the following evidence: (1) a letter from an attorney for BioUrja
3
Hamilton asserts that at a hearing on Global’s application, Global’s counsel made a judicial
admission that directly contradicted the verified application. But none of counsel’s statements at
the hearing rise to the level of a clear, deliberate, and unequivocal statement that directly
contradicts the verified application. See Regency Advantage Ltd. P'ship v. Bingo Idea–Watauga,
Inc., 936 S.W.2d 275, 278 (Tex. 1996); In re S.A.M., 321 S.W.3d 785, 790, n. 1 (Tex. App.—
Houston [14th Dist.] 2010, no pet.).
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Trading, LLC and Hamilton Metals, LLC, (2) an answer PNC Bank filed in a
garnishment proceeding Global initiated, and (3) an affidavit of James Millman,
Hamilton’s Chief Executive Officer. Global submitted this evidence more than a
month before the trial court granted the application. On appeal, Hamilton asserts
that the trial court should not have considered this evidence because Global did not
present the evidence in a timely manner. Hamilton cites summary-judgment cases
applying Texas Rule of Civil Procedure 166a for the timely filing of summary-
judgment evidence. Hamilton does not cite any cases holding that these summary-
judgment rules apply to an application under section 31.002 or addressing the
deadline for filing evidence in a section 31.002 proceeding. We conclude that Rule
166a’s deadlines for filing summary-judgment evidence do not apply to the filing
of evidence in support of an application for relief under section 31.002 and that
Global filed its evidence in a timely manner. See Gillet, 523 S.W.3d at 754.
Hamilton asserts that the letter from the attorney for BioUrja Trading, LLC
and Hamilton Metals, LLC amounts to inadmissible hearsay. Hamilton waived the
hearsay objection by failing to get a ruling from the trial court. See Mock v. Nat’l
Collegiate Student Loan Trust 2007-4, No. 01-17-00216-CV, 2018 WL 3352913,
at *3 (Tex. App.—Houston [1st Dist.] Jul. 10, 2018, no pet.) (mem. op.).
Hamilton also asserts that the letter from the attorney for BioUrja Trading,
LLC and Hamilton Metals, LLC is inadmissible because there was no
authentication of this document. We presume for the sake of argument that the
trial court properly could have considered this document despite the lack of
authentication. In this letter, the attorney states that some, but not all of
Hamilton’s assets were sold on October 6, 2016. The attorney also states that, as
to the three accounts at PNC Bank in Hamilton’s name, Hamilton Metals, LLC has
taken control of one account, and as to the other two, “it is our understanding that
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these accounts still belong to, and are controlled by, [Hamilton] and that there may
only be a nominal, if any, amount of money in them, but this would need to be
discussed with [PNC Bank].” The attorney did not state which assets of Hamilton
were not sold on October 6, 2016. Though the attorney conveys his understanding
that two bank accounts still belong to and are controlled by Hamilton, the attorney
does not say that PNC Bank owes Hamilton any amount as to either of these two
accounts. This letter is not legally sufficient to support a finding that Hamilton
owns any property. See Rohrmoos Venture, 2019 WL 1873428, at *24–25; Gillet,
523 S.W.3d at 757.
Hamilton asserts that the answer PNC Bank filed in the garnishment
proceeding constitutes inadmissible hearsay. Hamilton failed to get a ruling on this
objection and thus waived it. See Mock, 2018 WL 3352913, at *3. The answer
indicates that PNC Bank still holds three accounts in Hamilton’s name. After
asserting various objections in its answer, PNC Bank stated that it was unable to
definitively determine whether it was indebted to Hamilton at the time of the
answer because PNC Bank was unable to definitively determine the ownership of
monies held in three Hamilton accounts. On appeal, Global asserts that the two
accounts at PNC Bank that counsel for BioUrja Trading, LLC and Hamilton
Metals, LLC understood were still owned and controlled by Hamilton are
“accounts subject to collections.” Yet, neither the garnishment answer nor any
other evidence before the trial court showed that PNC Bank was indebted to
Hamilton under any of the three accounts. See Gillet, 523 S.W.3d at 757. Thus,
the answer does not stand as legally sufficient to support a finding that Hamilton
owns any property. See id.
Hamilton asserts that the documents filed as part of Millman’s affidavit
amount to inadmissible hearsay and that there was no authentication of these
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documents. Hamilton waived the hearsay objection by failing to secure a ruling on
it from the trial court. See Mock, 2018 WL 3352913, at *3. The no-authentication
argument lacks merit because Millman stated that the attached notice containing
the documents was a true and correct copy of the original. See In re Estate of
Guerrero, 465 S.W.3d 693, 704 (Tex. App.–Houston [14th Dist.] 2015, pet.
denied) (en banc).
Millman testified by affidavit as follows:
 Hamilton was a Houston-based wholesaler of non-corrosive steel pipe used
in oil and gas exploration and production operations.
 Hamilton financed its operations in part by a revolving line of credit issued
by PNC Bank, N.A. that was secured by a duly-perfected, first-priority lien
on all of Hamilton’s assets.
 After encountering financial difficulties, Hamilton defaulted under the terms
of its credit agreement with PNC Bank.
 As a result of the default, PNC Bank exercised its remedies under the credit
agreement and disposed of its collateral at a private foreclosure sale
conducted on October 6, 2016.
 The buyer at the foreclosure sale was BioUrja Trading, LLC. Neither
Hamilton, nor any of its current or former officers and directors, have any
interest in BioUrja Trading, LLC or Hamilton Metals, LLC, the entity
formed by BioUrja to take ownership of Hamilton’s former assets.
 The sale price at the foreclosure sale did not satisfy the total amount of PNC
Bank’s secured indebtedness, and PNC Bank currently holds a deficiency
claim against Hamilton in excess of $6 million. PNC Bank’s deficiency
claim remains secured by a first-priority lien on any remaining assets,
although Millman is not aware of any such assets.
 After foreclosure and liquidation of Hamilton’s assets, Hamilton ceased
operations.
 Hamilton “is a dormant legal entity with no valuable assets or equity.”
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Global did not dispute that the private foreclosure sale of Hamilton’s assets
had occurred on October 6, 2016 (before the trial court rendered the Judgment). In
Global’s application for a receiver, Global stated that Hamilton’s line of credit
“was subsequently foreclosed upon [by PNC Bank] under UCC Article 9 and
[Hamilton’s] tangible and intangible assets . . . were made available to third parties
for purchase via private sale and were subsequently sold.” Global asserted that at
the time of the application, these assets were “not believed to be within the scope
of this Application,” but Global stated that it reserved the right to ask the trial court
for additional relief as to these assets. The record does not reflect that Global ever
sought such relief. Consistent with this part of the application, in the trial court’s
receivership order, the trial court excluded from the scope of the order the assets
and property formerly owned by Hamilton that were acquired by BioUrja Trading,
LLC and Hamilton Metals, LLC from PNC Bank through the foreclosure sale and
related transactions. The trial court stated that this exclusion was without prejudice
to Global’s or the receiver’s ability to petition the court for additional relief with
respect to such assets and property. The record does not reflect that Global or the
receiver petitioned for any such additional relief.
Global also cites “Schedule 5” to the notice attached to Millman’s affidavit.
Schedule 5 lists assets not included in the private sale by PNC Bank. Global
asserts that this schedule shows assets owned by Hamilton that were not sold on
October 6, 2016. According to Schedule 5, the private sale was not to include the
following items:
(1) any lease, license, contract, or agreement to which Hamilton is a
party to the extent that a security interest therein is prohibited by or in
violation of any applicable law or a term or condition of any such
lease, license, contract, or agreement;
(2) any equipment owned by Hamilton that is subject to a purchase-
money lien or a capital-lease obligation if the grant of a security
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interest therein would constitute a violation of a valid and enforceable
restriction in favor of a third party, unless any required consents have
been obtained;
(3) any monies, checks, securities or other items on deposit or
otherwise held in deposit accounts or trust accounts specifically and
exclusively used for payroll, payroll taxes, deferred compensation and
other employee wage and benefit payments to or for the direct benefit
of Hamilton’s employees.
Schedule 5 does not contain any statement that Hamilton owns or possesses
any of the above-described assets; rather, Schedule 5 and the notice document of
which it is a part provide that if Hamilton owns any such assets, the assets would
not be part of the private sale. No evidence before the trial court showed that
Hamilton owned any such assets.
The list of excluded assets in Schedule 5 also includes certain tubular goods
delivered to Hamilton as consignee and stored on Hamilton’s property, for which
ownership of the goods had not been transferred to Hamilton or its customers
under an agreement between Hamilton and another company. Hamilton would not
own any of these consigned goods.
The list of excluded assets in Schedule 5 also includes the following assets:
(1) six copiers, identified by serial number, securing Hamilton’s
obligations to Konica Minolta Business Solutions USA, Inc.;
(2) three Caterpillar assets, identified by serial number, securing
Hamilton’s obligations to De Lage Landen Financial Services, Inc.;
and
(3) one Chevy Traverse SUV, identified by VIN number.
(collectively the “Ten Assets”). The evidence before the trial court when it signed
the receivership order was sufficient to show that Hamilton had an ownership
interest in each of the Ten Assets. The trial court did not abuse its discretion by
granting relief under section 31.002(b) as to Hamilton’s ownership interests in the
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Ten Assets. See Gillet, 523 S.W.3d at 756. To the extent that the trial court
granted relief under section 31.002(b) as to any other property, the order lacks
supporting evidence. See id. at 757; Great N. Energy, Inc. v. Circle Ridge Prod.,
Inc., No. 06-16-00029-CV, 2016 WL 7912458, at *11 n.16 (Tex. App.—
Texarkana Sept. 28, 2016, no pet.) (mem. op.); Stanley v. Reef Sec., Inc., 314
S.W.3d 659, 666–67 (Tex. App.—Dallas 2010, no pet.). Under the applicable
standard of review, we conclude that the trial court abused its discretion in signing
the receivership order to the extent the order applies to property other than
Hamilton’s ownership interests in the Ten Assets. See Gillet, 523 S.W.3d at 757;
Great N. Energy, Inc., 2016 WL 7912458, at *11 n.16; Stanley, 314 S.W.3d at
666–67.
The receivership order is thirteen pages long and contains various detailed
provisions, including one requiring Hamilton to turn over to the receiver 28
categories of documents within five days of Hamilton’s receipt of a copy of the
receivership order. The record does not reflect that Hamilton has superseded the
receivership order, and neither the appellate briefing nor the appellate record
reflect what actions have occurred vis-à-vis the receivership since the receiver filed
his oath and cash deposit in lieu of receiver bond soon after the trial court signed
the receivership order. Under these circumstances, we conclude that a remand is
necessary for further proceedings, and so we do not render judgment. See Tex. R.
App. P. 43.3. We reverse the receivership order and remand with instructions to
the trial court to issue a new order that applies only to Hamilton’s ownership
interests in the Ten Assets. See id.; Gillet, 523 S.W.3d at 757; Great N. Energy,
Inc., 2016 WL 7912458, at *11 n.16; Stanley, 314 S.W.3d at 666–67.
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C. Do the judgment debtor’s challenges to two specific parts of the order
have merit?
Hamilton also asserts that in the order the trial court impermissibly
adjudicated the rights of third parties by giving the receiver the “exclusive right,
power and authority to vote any shares of stock, partnership interest, or other
business interests of [Hamilton]” and “the exclusive right, power, and authority to
sign any orders, or minutes or resolutions of directors authorizing any action of
[Hamilton] requiring such resolution or signed minutes by [Hamilton’s] operating
agreement.” We need not address this complaint because, as explained above, we
are reversing the trial court’s receivership order and remanding with instructions to
the trial court to issue a new order that applies only to Hamilton’s ownership
interests in the Ten Assets, and none of the Ten Assets are shares of stock or equity
interests.
Hamilton also complains that in the order the trial court provides that, “if it
is discovered that Hamilton . . . or any of its owners and/or officers both former
and present, held or hold an interest in the entities that purchased [Hamilton’s]
assets and property,” Global and the receiver need not provide notice to BioUrja
Trading, LLC, Hamilton Metals, LLC, and LogiBio Port Allen, LLC of any
petition or request for additional relief with respect to the assets acquired from
Hamilton by BioUrja Trading, LLC, Hamilton Metals, LLC, and LogiBio Port
Allen, LLC. No evidence in the record shows that the condition stated in this part
of the order has occurred, and we are reversing the trial court’s order. We
conclude that this complaint is not ripe for adjudication, and we do not address it.
See Patterson v. Planned Parenthood of Houston & Se. Tex., Inc., 971 S.W.2d 439,
442 (Tex. 1998).
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III. CONCLUSION
The trial court abused its discretion in signing the receivership order to the
extent the order applies to property other than Hamilton’s ownership interests in
the Ten Assets. We reverse the receivership order and remand with instructions to
the trial court to issue a new order that applies only to Hamilton’s ownership
interests in the Ten Assets.
/s/ Kem Thompson Frost
Chief Justice
Panel consists of Chief Justice Frost and Justices Wise and Zimmerer.
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