REVERSE and REMAND in part, AFFIRM in part; Opinion issued February 21, 2013
S In The
Court of Appeals
Fifth District of Texas at Dallas
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No. 05-10-00882-CV
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TURNER BROS. TRUCKING, L.L.C., Appellant
V.
KRISTAL M. BAKER, INDIVIDUALLY AND D/B/A K&D LOGISTICS CO., CLIFFORD
DWAYNE JACKS, INDIVIDUALLY AND D/B/A K&D LOGISTICS CO., S/W QUALITY
HAY, LLC, AND C.D. JACKS, INC., Appellees
═════════════════════════════════════════════════════════════
On Appeal from the 422nd District Court
Kaufman County, Texas
Trial Court Cause No. 74068-422
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OPINION
Before Justices Bridges, O=Neill, and Fillmore
Opinion By Justice Bridges
Turner Bros. Trucking, L.L.C. appeals the trial court's order granting in part Turner's
application for a turnover order. In three issues, Turner argues the trial court abused its discretion
in refusing to appoint a receiver, erred in concluding it lacked legal authority to order turnover of
certain life insurance proceeds, and abused its discretion in failing to award attorney=s fees. We
reverse the trial court=s denial of attorney=s fees and remand for a determination of Turner=s
reasonable attorney=s fees. In all other respects, we affirm the trial court=s judgment.
In July 2007, Turner sued Kristal M. Baker, individually and d/b/a K&D Logistics Co.,
Clifford Dwayne Jacks, individually and d/b/a K&D Logistics Co., S/W Quality Hay, LLC, and
C.D. Jacks, Inc., alleging claims of breach of contract, fraud, violations of the DTPA, theft of
services, quantum meruit, unjust enrichment, conspiracy, alter ego, declaratory judgment, punitive
damages, and sworn account claims. The petition alleged Baker and Jacks were co-owners of
K&D and, among other things, acted as an agent for their clients in transporting goods and
merchandise. In December 2006, Turner entered into a broker=s agreement with Baker and Jacks,
individually and doing business as K&D, a motor freight transport company. Under the terms of
the agreement, Turner was to invoice approved customers for transportation services, receive
payment, and pay K&D a commission. One customer was S/W Quality Hay. Among other
things, Turner alleged S/W Quality Hay refused to pay Turner for transportation services because
it considered itself K&D=s customer, not Turner=s customer. On February 23, 2009, the trial court
entered an interlocutory summary judgment in favor of Turner awarding Turner damages on
several of its claims, plus attorney=s fees. Following the parties= working out of certain
cross-claims, the trial court entered final judgment in favor of Turner against S/W Quality Hay,
among others, on November 4, 2009.
In March 2010, Turner filed an application for turnover by which Turner sought to join,
Awhether by notice or other legal process,@ the former managers and members of S/W Quality Hay,
identified as Janice Stevens, Richard Woods, and Shirley Woods. The application alleged
post-judgment discovery revealed Janice Stevens, Richard Woods, and Shirley Woods had taken
out life insurance policies on the lives of Richard Woods and Mark Stevens, the deceased husband
of Janice Stevens. The application alleged the insurance policies were acquired with monies from
S/W Quality Hay, but the members and managers agreed Ato specifically have the policy on the life
of Mark Stevens owned by Janice Stevens and the policy on Richard Woods, owned by Shirley
B2B
Woods, even though [S/W Quality Hay] was paying all of the premiums.@ In addition, the
members and managers of S/W Quality Hay Ahad agreed at the time of the acquisition of the
policies that Janice Stevens and Richard Woods would be the beneficiaries of the policy on Mark
Stevens= life and Shirley Woods would be the beneficiary of the policy on Richard Woods= life.@
Shortly after the life insurance policies were acquired, Mark Stevens passed away, and the
$500,000 death benefit was payable in the amounts of $300,000 to Janice Stevens and $200,000 to
Richard Woods. The members and managers Adivided up the proceeds of the policy, except that
they used a small portion of the proceeds to pay off all the known creditors of [S/W Quality Hay],
except [Turner].@
At the hearing on the turnover application, Turner argued the Woods paid $53,511.98 to
trade creditors of S/W Quality Hay, and Janice Stevens paid off a tractor that belonged to the
company and a truck that belonged to Richard Woods and was used by the company. Richard
Woods then conveyed the truck to Janice Stevens. Turner argued the life insurance policy on
Mark Stevens should have been Aissued to the company,@ and the funds from the policy Ashould
have been available as trust fund doctrines [sic] to pay creditors.@ Turner conceded that Janice
Stevens, Richard Woods, and Shirley Woods Awere not named as defendants prior to the time the
judgment [against S/W Quality Hay] had been obtained and [had] not since been named as
defendants.@ Turner argued the trial court was required to appoint a receiver because the relief
Turner sought from Janice Stevens, Richard Woods, and Shirley Woods would Ahave to be sued
for by the company, not by a creditor. Now, fraudulent transfer and alter ego a creditor can raise
at any time, but the other causes of action can only be asserted by the company or a receiver
appointed by the company against these individuals because those claims actually belong to the
company.@
B3B
Following the hearing, the trial court entered an order requiring the turnover of two desktop
computers, a Kubota tractor, and a Chevrolet pickup truck, all property of S/W Quality Hay. The
order further enjoined Janice Stevens, Richard Woods, and Shirley Woods from Adissipating,
spending, disbursing or using@ the proceeds from the insurance policy on Mark Stevens.
Subsequently, the trial judge advised the parties that Athe Texas turnover statute cannot be utilized
to adjudicate the substantive property rights of the Third Parties (Ms. Stevens and Mr. And Mrs.
Woods) with respect to the ownership of the subject insurance proceeds.@ The trial judge noted
the following:
that Plaintiff=s judgment is against SW Quality Hay, LLC, not the Third Parties;
that the Third Parties were not joined in this action prior to judgment becoming
final; that the Third Parties are claiming an ownership interest in the insurance
proceeds; and the Court is without authority to order non-judgment debtors to turn
over funds in which they claim an interest.
This appeal followed.
In its first issue, Turner argues the trial court abused its discretion in refusing to appoint a
receiver to pursue, or at least evaluate, legal claims on behalf of S/W Quality Hay against Janice
Stevens, Richard Woods, and Shirley Woods. In its second issue, Turner argues the trial court
erred in concluding it lacked legal authority to order turnover of the life insurance proceeds at issue
and abused its discretion in failing to order such turnover.
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 judgment is sustainable for any reason.
Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991). A trial court=s legal
conclusions are reviewed de novo. El Paso Nat. Gas Co. v. Minco Oil & Gas, Inc., 8 S.W.3d 309,
B4B
312 (Tex. 1999). Texas courts do not apply the turnover statute to non-judgment debtors.
Beaumont Bank, 806 S.W.2d at 227. Here, the trial court=s original judgment imposed liability on
S/W Quality Hay, among others. However, the judgment did not make Janice Stevens, Richard
Woods, and Shirley Woods debtors in their individual capacities. Because Janice Stevens,
Richard Woods, and Shirley Woods were not parties to the November 4, 2009 judgment, the
turnover statute was not available to obtain relief from them in their individual capacities. See id.
Under these circumstances, the trial court did not err in denying Turner relief under the turnover
statute against Janice Stevens, Richard Woods, and Shirley Woods. See id. We overrule
Turner=s first and second issues.
In their third issue, Turner argues the trial court erred in failing to award its attorney=s fees.
Specifically, Turner argues it succeeded in obtaining turnover of Asignificant assets,@ and an award
of attorney=s fees was therefore mandatory under the turnover statute. A judgment creditor who
obtains turnover relief is entitled to reasonable costs, including attorney=s fees. Daniels v. Pecan
Valley Ranch, Inc., 831 S.W.2d 372, 386 (Tex. App.CSan Antonio 1992, writ denied). Here,
although Turner obtained turnover relief in the form of computers, a tractor, and a pickup truck, the
trial court awarded Turner no attorney=s fees. The record contains the affidavit of Turner=s
attorney stating $7500 was a reasonable and necessary attorney=s fee for the services rendered in
preparing the application for turnover order and other relief. However, as we have discussed,
Turner is not entitled to turnover relief related to the insurance policy. The affidavit does not
specify what part of the attorney=s fees are attributable to the turnover relief obtained.
Accordingly, we reverse the trial court=s order to the extent it denied Turner an award of attorney=s
fees and remand for a determination of the amount of reasonable attorney=s fees incurred by Turner
for legal services related to the turnover relief obtained. We sustain Turner=s third issue.
B5B
We reverse the trial court=s denial of attorney=s fees and remand for a determination of
Turner=s reasonable attorney=s fees. In all other respects, we affirm the trial court=s judgment.
/David L. Bridges/
DAVID L. BRIDGES
JUSTICE
100882F.P05
B6B
S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
TURNER BROS. TRUCKING, L.L.C.,, On Appeal from the 422nd Judicial District
Appellant Court, Kaufman County, Texas
Trial Court Cause No. 74068-422.
No. 05-10-00882-CV V. Opinion delivered by Justice Bridges.
Justices O'Neill and Fillmore participating.
KRISTAL M. BAKER, INDIVIDUALLY
AND D/B/A K&D LOGISTICS CO., S/W
QUALITY HAY, LLC, AND C.D. JACKS,
INC., Appellees
In accordance with this Court’s opinion of this date, the judgment of the trial court denying
Turner Bros. Trucking, L.L.C. an award of attorney’s fees is REVERSED and this cause is
REMANDED to the trial court for a determination of Turner Bros. Trucking, L.L.C.'s reasonable
attorney's fees. In all other respects, the judgment of the trial court is AFFIRMED.
Judgment entered February 21, 2013.
/David L. Bridges/
DAVID L. BRIDGES
JUSTICE
B7B
Turner Bros. Trucking, L.L.C. v. Baker, Kristal M.
Combined Opinion