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Appellate Court Affirmed Receivership Order Where Appellant Waived His Complaints By Not Securing Rulings And By Not Challenging All Potential Grounds Upon Which The Order Was Based

In In re Estate of Vines, a probate court appointed a receiver over a business that was owned by a decedent. No. 01-21-00003-CV, 2022 Tex. App. LEXIS 2327 (Tex. App.—Houston [14th Dist.] April 12, 2022, no pet. history). After the decedent died, her grandchildren challenged a new will and other documents that were executed by their grandmother in favor of the grandmother’s nephew. The trial court appointed a temporary administrator and later appointed a receiver over a business that was owned by the grandmother, but that was now controlled by the nephew. The nephew appealed the receivership order on multiple grounds.

The nephew first argued that the business had been transferred to him outside of probate, and that the probate court had no jurisdiction to appoint a receiver over that non-probate asset. The court of appeals held that he waived that argument by not securing a ruling on it, and the court held that the issue was still before the trial court. The nephew also challenged the appointment of a receiver under Texas Civil Practice and Remedies Code Section 64.001(3). That provision provides that a court may appoint a receiver:

(1) in an action by a vendor to vacate a fraudulent purchase of property; (2) in an action by a creditor to subject any property or fund to his claim; (3) in an action between partners or others jointly owning or interested in any property or fund; (4) in an action by a mortgagee for the foreclosure of the mortgage and sale of the mortgaged property; (5) for a corporation that is insolvent, is in imminent danger of insolvency, has been dissolved, or has forfeited its corporate rights; or (6) in any other case in which a receiver may be appointed under the rules of equity.

Id. (citing Tex. Civ. Prac. & Rem. Code § 64.001(a)). The court of appeals noted that the trial court’s receivership order simply cited to Section 64.001 and did not specify which subsection it was basing its ruling on. The court then held that the nephew waived his complaint by not challenging all grounds upon which the trial court based its ruling:

The probate court’s January 11, 2021 order appointing a receiver stated it was appointing a receiver pursuant to Chapter 64 of the Texas Civil Practice and Remedies Code, but it did not specify which subsection it was relying on in granting the appointment of a receiver. Thus, on appeal, it was incumbent on Kenneth to attack all possible grounds. Here, Kenneth does not attack all independent grounds that support the probate court’s order. Specifically, Kenneth assigns no error to subsection (a)(6), which generally allows a probate court to appoint a receiver under the rules of equity. By failing to attack this independent ground, Kenneth has waived error, if any

Id. The nephew also challenged the order under Texas Business Organizations Code Section 11.404, but the court similarly held that he waived that argument by not challenging all grounds thereunder. The court affirmed the receivership order.

Original author: David Fowler Johnson
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