2019 Adv Family Law Drafting.pdf

RECEIVERSHIPS AND DRAFTING REQUIREMENTS

MARY EVELYN McNAMARA, Austin

Rivers McNamara, PLLC

State Bar of Texas

ADVANCED FAMILY LAW DRAFTING

December 12-13, 2019

Dallas

CHAPTER 11.2

ACKNOWLEDGMENTS

The author thanks John Eck for giving permission to use portions of his Receiverships and Property Enforcement

article, 18

Annual New Frontiers in Marital Property Law 3.1 (2013).

The author also thanks Chris Nickelson for sharing briefing about receiverships in family law cases.

Receiverships and Drafting Requirements Chapter 11.2

TABLE OF CONTENTS

I.@ INTRODUCTION TO RECEIVERSHIPS ............................................................................................................. 1@

II.@ DO YOU NEED A RECEIVERSHIP? ................................................................................................................... 1@

A.@ Costs and Benefits of Homestead Receivership .............................................................................................. 1@

B.@ Selling the House of Horrors ........................................................................................................................... 1@

C.@ Business Receivership ..................................................................................................................................... 1@

III.@ REQUESTING APPOINTMENT OF A RECEIVER ............................................................................................ 1@

A.@ Temporary Orders in Dissolution Cases .......................................................................................................... 1@

1.@ Generally ................................................................................................................................................. 1@

2.@ Applicant’s Burden .................................................................................................................................. 2@

3.@ No Appointment of Receiver for Benefit of Third-Party Creditors ......................................................... 2@

4.@ No Appointment of Receiver on Petition of Business Entity or Individual ............................................ 2@

5.@ Notice of Appointment ............................................................................................................................ 2@

6.@ Selected Appellate Cases ......................................................................................................................... 3@

B.@ To Effectuate Property Division ...................................................................................................................... 3@

1.@ Generally ................................................................................................................................................. 3@

2.@ Selected Appellate Cases ......................................................................................................................... 4@

C.@ Temporary Orders During Appeal ................................................................................................................... 5@

D.@ Chapter 9 Enforcement .................................................................................................................................... 5@

1.@ Generally ................................................................................................................................................. 5@

2.@ Selected Appellate Cases ......................................................................................................................... 6@

E.@ Agreed Receivership Appointments ................................................................................................................ 7@

IV.@ POWERS AND DUTIES OF RECEIVER ............................................................................................................. 8@

A.@ Generally ......................................................................................................................................................... 8@

B.@ Qualifications .................................................................................................................................................. 8@

C.@ Activities ......................................................................................................................................................... 8@

D.@ Ability to Bring Suits ...................................................................................................................................... 8@

E.@ Receiver’s Oath ............................................................................................................................................... 8@

F.@ Receiver’s Bond .............................................................................................................................................. 8@

G.@ Custodia Legis ................................................................................................................................................. 8@

H.@ Lis Pendens...................................................................................................................................................... 9@

I.@ Inventory ......................................................................................................................................................... 9@

J.@ Receiver’s Fees ................................................................................................................................................ 9@

K.@ Receiver’s Report ............................................................................................................................................ 9@

V.@ CHALLENGING APPOINTMENT OF RECEIVER .......................................................................................... 10@

A.@ General Immunity .......................................................................................................................................... 10@

B.@ Jury Trial ....................................................................................................................................................... 10@

C.@ Termination by Parties .................................................................................................................................. 10@

VI.@ APPEALING RECEIVERSHIP ORDER ............................................................................................................. 10@

A.@ On Temporary Orders in Pending Case ......................................................................................................... 10@

1.@ Interlocutory Appeal .............................................................................................................................. 10@

2.@ Findings of Fact and Conclusions of Law Required No Later Than Seven Days After Receiver

Appointed .............................................................................................................................................. 11@

3.@ Interlocutory Appeal Accelerated: Notice of Appeal Due Within Twenty Days After Receiver

Appointed .............................................................................................................................................. 11@

4.@ Standard of Review ............................................................................................................................... 11@

5.@ Certain Orders Not Appealable ............................................................................................................. 11@

B.@ On Final Orders .............................................................................................................................................

11@

1.@ Generally ............................................................................................................................................... 11@

2.@ Order Approving Receiver’s Final Report and/or Final Fees Appealable ............................................. 11@

C.@ On Temporary Orders During Appeal ........................................................................................................... 12@

Receiverships and Drafting Requirements Chapter 11.2

D.@ Mandamus ..................................................................................................................................................... 12@

VII.@ APPENDIX ........................................................................................................................................................... 12@

Receiverships and Drafting Requirements Chapter 11.2

RECEIVERSHIPS AND DRAFTING

REQUIREMENTS

I. INTRODUCTION TO RECEIVERSHIPS

It is well settled in Texas that receivership is an

extraordinarily harsh remedy and one that courts are

particularly loath to use. Independent Am. Sav. Ass’n v.

Preston 117 Joint Venture, 753 S.W.2d 749, 750 (Tex.

App.—Dallas 1988, no writ); Parness v. Parness, 560

S.W.2d 181, 182 (Tex. Civ. App.—Dallas 1977, no

writ); Readhimer v. Readhimer, 728 S.W.2d 872, 873

(Tex. App.—Houston [1

Dist.] 1987, no writ) (trial

court abused discretion in appointing receiver in divorce

case in which no evidence demonstrated that

receivership was necessary for preservation and

protection of property). See Norem v. Norem, 105

S.W.3d 213, 216 (Tex. App.—Dallas 2003, no pet.)

(finding that Texas Family Code does not set out

predicate to support receivership order, Norem rejected

holding under Readhimer that appointment of receiver

in dissolution case requires showing that parties’

property is in danger and that less harsh remedy is

unavailable). Judicial seizure and court management of

any asset should be a last resort. Rusk v. Rusk, 5 S.W.3d

299, 306 (Tex. App.—Houston [14

Dist.] 1999, pet.

denied); see Parness, 560 S.W.2d at 182.

II. DO YOU NEED A RECEIVERSHIP?

In a divorce case, subjects of a receivership can

include the homestead, commercial property,

businesses, and personalty. Beaty v. Beaty, 186 S.W.2d

88, 88 (Tex. Civ. App.—Eastland 1945, no writ). One

common scenario in a divorce case involves the client

who advises the home mortgage has not been paid in

months, the home may or may not be upside down in

what it is worth, and foreclosure is imminent. A reaction

can be immediately to request the appointment of a

receiver for the property. Under these and other

scenarios, before a hasty trip to the courthouse with your

motion, consider the following:

A. Costs and Benefits of Homestead Receivership

In the instance of a receivership for homestead, it

is important to know what the home is worth. Has the

home value decreased to the point it is worth less than

the mortgage? Will the costs of receivership exceed the

net proceeds from the sale of the home? Costs involved

in a receiver’s sale of the home can include the

receiver’s fees in addition to the realtor’s fees and/or

commissions, other typical closing costs, and attorney’s

fees. Costs of receivership can also include insurance,

taxes, repairs, and maintenance during the pendency of

the receivership. Add the missed note payments or a

decrease in the value of the home and it is easy to see

that if the equity in the home is small or nonexistent,

there is little benefit of a receivership.

Assessing the value of the home is not always easy.

A spouse may not always know the current balance of

the note. Even if known, spouses may still dispute the

selling price. A market analysis is a quick and cheap

way to ascertain the home’s value compared to other

homes of comparable value in the area. However, a

market analysis does not consider the specific condition

of the home. If condition is an issue, then an appraisal

may be necessary. An appraisal may provide a more

thorough comparison of the home to past sales of

comparable properties, but it will be more expensive,

time consuming, and likely require the cooperation of

the parties.

B. Selling the House of Horrors

The home’s history often results in the home

selling for less than a comparable property with no legal

problems. The home may be in disrepair or damaged.

Rooms may be partially or fully emptied of contents

because a party moved out. As a result, the home is less

attractive to potential buyers. The sale price may have

to be lowered to rebate the cost of repairs or poor

aesthetics. Further, prospective buyers are often

unwilling to endure the delays, clouds on title, court

hearings, and court approval of sale, unless the house is

sold for drastically below market value.

C. Business Receivership

Imposing a receivership on a business is more

complex than sale of a home through receivership. Can

a receiver run the business on a day-to-day basis? Does

it make sense to exclude a party from running the

business? What if the party tries to scuttle the business?

How might a receiver use the party’s special knowledge

or skills? In many cases, the receiver acts in a

supervisory position, allowing the party to continue to

operate the business. The receiver reviews the business

records for accuracy and irregularities and may be

involved in major decisions in the operation of the

enterprise while marketing it for sale.

III. REQUESTING APPOINTMENT OF A

RECEIVER

A. Temporary Orders in Dissolution Cases

1. Generally

Requesting the appointment of a receiver while a

suit for dissolution of marriage is pending is governed

by Texas Family Code section 6.502(a)(5). After a

petition has been filed, the court, on the motion of any

party or on the court’s own motion, may appoint a

receiver for the preservation and protection of the

property of the parties. Tex. Fam. Code § 6.502(a)(5);

Norem v. Norem, 105 S.W.3d 213, 216 (Tex. App.—

Dallas 2003, no pet.). Section 6.502 allows a receiver to

be appointed to effectuate the Court’s orders when such

an order is necessary and equitable “to protect” one or

both spouses and “to preserve” their marital estate from

Receiverships and Drafting Requirements Chapter 11.2

being lost to creditors. See, e.g., In re C.F.M., 360

S.W.3d 654, 658 (Tex. App.—Dallas 2012, no pet.)

(affirming order appointing receiver to take charge of

husband’s assets so that husband’s court-ordered

obligations, to pay interim support and attorney’s fees,

would be paid in a timely manner); Norem, 105 S.W.3d

at 215, 217 (affirming order appointing receiver to take

charge of husband’s shares of corporate stock after

husband defied court order to liquidate financial account

and borrow money from IRA to pay interim attorney’s

fees); Sparr v. Sparr, 596 S.W.2d 164, 165 (Tex. Civ.

App.—Texarkana 1980, no writ) (affirming

appointment of pre-trial receiver to sell spouses’ home);

Hursey v. Hursey, 147 S.W.2d 968, 970 (Tex. Civ.

App.—Dallas 1940, no writ) (affirming appointment of

pre-trial receiver to manage rental properties, collect

rent, and apply same as directed by court).

2. Applicant’s Burden

The applicant’s burden in requesting a receiver in

a divorce proceeding is to make a proper showing of

entitlement to a receiver. Norem, 105 S.W.3d at 216. For

the trial court to appoint a receiver, there must be

evidence that the receivership is for the protection and

preservation of the property of the parties. Id. at 216;

Tex. Fam. Code § 6.502(a). The burden of establishing

the right to a receivership is by a preponderance of the

evidence. H & R Oils v. Pioneer Am. Ins., 541 S.W.2d

665, 668-69 (Tex. Civ. App.—Fort Worth 1976, no

writ). The appointment of a receiver must be supported

by evidence and not solely on the argument of counsel.

Tex. Fam. Code § 6.502(a); Tugman v. Tugman, No. 13-

08-00194-CV (Tex. App.—Corpus Christi May 22,

2008, no pet.) (mem. op.); Stoker v. Stoker, No. 12-07-

00334-CV (Tex. App.—Tyler May 14, 2008, no pet.)

(mem. op.).

The Texas Family Code controls the appointment

of a receiver in a divorce case, and the requirements that

exist under the Texas Civil Practice and Remedies Code

do not apply. Norem, 105 S.W.3d at 216. There are no

pleading requirements of insolvency of the party,

inadequacy of a legal remedy, or equitable grounds. Id.

Further, there is no requirement that the party seeking a

receiver prove that the property is in danger of being

lost, removed, or materially injured and that a less harsh

remedy is not available. Id. A trial court appoints a

receiver when it deems it necessary and equitable for the

preservation and protection of the marital property. Id.

This is the only evidence that must be presented. Section

6.502 gives trial courts the broadest discretion in

granting temporary orders, including orders appointing

a pre-trial receiver. In re C.F.M., 360 S.W.3d at 658;

Norem, 105 S.W.3d at 216. Under section 6.502(a)(5),

the trial court’s broad discretionary power to act as

necessary for the preservation and protection of the

parties’ property serves the ultimate responsibility of the

court to divide the community property in a just and

right manner, and its order cannot be disturbed unless

there is a clear abuse of discretion. Norem, 105 S.W.3d

at 216.

3. No Appointment of Receiver for Benefit of Third-

Party Creditors

The appointment of a receiver under the Texas

Family Code may not be for the benefit of third-party

creditors. Mallou v. Payne & Vendig, 750 S.W.2d 251,

254 (Tex. App.—Dallas 1988, writ denied). Because the

spouses are the only parties whose interests in the

property the court may seek to protect through the

appointment of a receiver under the Texas Family Code,

a trial court’s refusal to terminate a receivership upon

the request of both spouses constitutes an abuse of

discretion. Id. at 255. Further, it is improper to appoint

a receiver over partnership property, which is not

property of the spouses. In re Gray Law, L.L.P., No. 02-

05-00379-CV, at *4 (Tex. App.—Fort Worth Apr. 20,

2006, no pet.) (mem. op.).

4. No Appointment of Receiver on Petition of

Business Entity or Individual

A court may not appoint a receiver for a

corporation, partnership, or individual on the petition of

the same corporation, partnership, or individual. Tex.

Civ. Prac. & Rem. Code § 64.002(a). This section does

not prohibit the appointment of a receiver over all or part

of the marital estate in a suit filed under Title 1 or Title

5 of the Texas Family Code. Id. § 64.002(c)(2).

5. Notice of Appointment

Not later than the 30th day after the date a receiver

is appointed under section 6.502(a)(5), the receiver shall

give notice of the appointment to each lienholder of any

property under the receiver’s control. Tex. Fam. Code §

6.502(b). Not later than the seventh day after the date a

receiver is appointed, the court shall issue written

findings of fact and conclusions of law in support of the

receiver’s appointment. Id. § 6.502(c). If the court

dispenses with the issuance of a bond between the

spouses as provided by section 6.503(b) in connection

with the receiver’s appointment, the court shall include

in the court’s findings an explanation of the reasons the

court dispensed with the issuance of a bond. Id.

The Texas Family Code requires notice only to the

parties before the issuance of an order for receivership.

See Tex. Fam. Code §§ 6.502(a), 6.709(a). By inference,

section 6.502(b) only requires notice to lienholders after

the appointment of the receiver because it requires the

receiver to give notice of the receiver’s appointment

within 30 days to all lienholders of the property in the

receiver’s possession. Therefore, it is unclear whether

the lienholder must be given notice before a hearing

under the Texas Family Code. But see Rusk v. Rusk, 5

S.W.3d 299, 308 (Tex. App.—Houston [14

Dist.]

1999, no pet.) (notice provision of rule governing

Receiverships and Drafting Requirements Chapter 11.2

receiverships is applicable to appointment of receivers

in marriage dissolution cases involving fixed and

immovable property).

6. Selected Appellate Cases

In re C.F.M., 360 S.W.3d 654 (Tex. App.—Dallas 2012,

no pet.):

The appellate court in C.F.M. held that

“property” under section 6.502(a)(5) includes

both community and separate property. Id. at

659-60 (no error in placing all property under

protection of receiver because section

6.502(a)(5) refers to “the property of the

parties”). In C.F.M., the husband had not

identified any separate property by clear and

convincing evidence. Id. at 659. But even if

the husband had successfully identified

separate property, Texas law would not limit

the receiver to preserve and protect only

community assets. Id. The Court in C.F.M.

determined that section 6.502 speaks to “the

property of the parties.” Id. It does not employ

the terms “separate property” or “community

property,” both of which are defined in the

Texas Family Code. Id. The court went on to

say that had the legislature intended to limit a

receivership to community property, as the

husband contended, it would have used its

defined term to do so. Id.

The underlying issue in C.F.M. was

management of property during the pendency

of the divorce. The wife filed a motion for the

appointment of a receiver after the husband

had failed to comply with court orders to pay,

among other items, spousal support, child

support, expert fees, and the wife’s attorney’s

fees. After three hearings, the trial court

appointed a receiver after the court found that

the husband repeatedly failed to comply with

court orders, had sole control of the parties’

financial assets and accounts, his financial

support was necessary to protect the wife and

the children, and the husband was

incompetent to manage his affairs. The court

of appeals affirmed, finding that the

appointment of a receiver would ensure that

payments of fees and costs were timely and

that any transfers of property had prior

approval.

Norem v. Norem, 105 S.W.3d 213 (Tex. App.—Dallas

2003, no pet.):

In Norem, the wife presented evidence that the

value of the community estate had diminished

during the pendency of the divorce and that

the husband had not followed orders to deliver

property and pay attorney’s fees from

community property. Id. at 217. Further, the

evidence showed that the husband had moved,

sold, transferred, and encumbered property in

violation of court orders and injunctions. Id.

The court determined that the evidence

supported the appointment of a receiver. Id.

Finding that the Texas Family Code does not

set out a predicate to support a receivership

order, the Norem court rejected the holding

under Readhimer that appointment of a

receiver in a dissolution case requires a

showing that the parties’ property is in danger

and that a less harsh remedy is unavailable.

Readhimer v. Readhimer, 728 S.W.2d 872,

873 (Tex. App.—Houston [1

Dist.] 1987, no

writ).

Ortiz v. Ortiz, No. 13-15-00556-CV (Tex. App.—

Corpus Christi Oct. 20, 2016, no pet.) (mem. op.):

In Ortiz, the trial court appointed a receiver

after three interim hearings, finding that the

husband was diverting company funds for

personal use, including fertility treatment

when the couple was not trying to get

pregnant. The husband made over $26,000 in

personal purchases with a business credit card,

made over $14,000 in payments to his

personal credit card with corporate funds, and

withdrew over $72,000 from one of the

businesses. The trial court considered less

harsh remedies before resorting to

receivership, first ordering the parties not to

use business funds for personal expenses and

later ordering the husband to reimburse the

wife for personal expenses that he paid with

business funds. The husband did not comply

with either order. The court of appeals

affirmed, holding that the evidence was

sufficient to support a finding that the

appointment of a receiver was necessary for

the preservation and protection of the parties’

property.

B. To Effectuate Property Division

1. Generally

The trial court has broad authority to divide the

marital estate in a manner it deems just and right. Tex.

Fam. Code § 7.001. That authority includes the power

to appoint a receiver. See Rusk v. Rusk, 5 S.W.3d 299,

306 (Tex. App.—Houston [14

Dist.] 1999, pet.

denied); Vannerson v. Vannerson, 857 S.W.2d 659, 673

(Tex. App.—Houston [1

Dist.] 1993, writ denied). In

In re Marriage of Edwards, for example, at the final

Receiverships and Drafting Requirements Chapter 11.2

divorce trial, the trial court named a receiver to liquidate

the community estate and pay the debts. 79 S.W.3d 88,

93 (Tex. App.—Texarkana 2002, no pet.). The court

may order a homestead sale to accomplish a just and

right property division between the parties to the

divorce. Mallou v. Payne & Vendig, 750 S.W.2d 254,

257 (Tex. App.—Dallas 1988, writ denied).

2. Selected Appellate Cases

Rusk v. Rusk, 5 S.W.3d 299 (Tex. App.—Houston [14

Dist.] 1999, pet. denied):

After a request in final argument for

appointment of a receiver, the trial court

appointed a receiver to take charge of certain

real and personal, separate and community

property awarded to the husband until he

satisfied payment of a $150,000 judgment to

the wife. The husband appealed and among

other issues asserted that the trial court abused

its discretion by appointing a receiver over

property without proper notice or pleadings

and with no showing that any property was in

jeopardy of being lost, removed, or materially

injured; divesting him of his separate property

by placing it in receivership; and placing

certain exempt properties in receivership for

the purpose of satisfying the judgment.

The court of appeals held that the trial court

abused its discretion in appointing the receiver

without proper notice, citing Texas Rule of

Civil Procedure 695, requiring three days’

notice before a hearing on an application for

appointment of a receiver to take possession

of fixed and immovable property. It was also

error for a receivership to be placed over the

husband’s separate property, depriving him

from the use and enjoyment of the property.

Vannerson v. Vannerson, 857 S.W.2d 659 (Tex. App.—

Houston [1

Dist.] 1993, writ denied):

The husband appealed from a post-answer

default judgment and among many issues

asserted that the trial court erred in appointing

a receiver to sell the parties’ marital residence

and supervise the division of the personal

property. He argued that receivership is a

drastic remedy, to be exercised only in

extraordinary circumstances and only in those

situations in which the property is in present

danger of being lost, removed, or materially

injured, citing Texas Civil Practice &

Remedies Code section 64.001(b). The court

of appeals disagreed, finding that the relevant

statute was the predecessor to Texas Family

Code section 7.001, under which the trial

court has broad powers to enlist the aid of a

receiver to effectuate its property division

orders. There was no abuse of discretion in

appointing a receiver based on this broad

authority and because the marital residence

could not be partitioned in kind.

Nelson v. Nelson, 193 S.W.3d 624 (Tex. App.—

Eastland 2006, no pet.):

In Nelson, the trial court awarded to each

spouse an undivided one-half interest in a

12.03-acre tract of land and conditionally

appointed a receiver to sell the land if neither

party was able to purchase the other party’s

interest after the decree was entered.

Appellant asserted that the trial court abused

its discretion by not considering whether the

property was partitionable in kind and by

appointing the receiver without notice. The

court of appeals held that a trial court’s

discretion to appoint a receiver to sell a

property should not be exercised until the trial

court first determines if the property is subject

to partition in kind, citing Hailey v. Hailey,

331 S.W.2d 299, 303 (Tex. 1960). The trial

court’s findings of fact and conclusions of law

did not address whether the property could be

partitioned in kind, or otherwise explain the

basis for the court’s ruling. Therefore, the

conditional appointment of a receiver to sell

the property constituted an abuse of

discretion.

Allen v. Allen, No. 02-17-00031-CV (Tex. App.—Fort

Worth Jan. 25, 2018, no pet.) (mem. op.):

In Allen, the court of appeals affirmed the trial

court’s appointment of a receiver to partition

the parties’ residence by sale. In the appeal,

the wife asserted that the partition of the

residence by sale divested her of her separate

property interest in the residence, in violation

of Eggemeyer v. Eggemeyer, 554 S.W.2d 137,

138 (Tex. 1977) (holding that trial court may

not in a decree divest one spouse of that

spouse’s separate realty and transfer title to

the other spouse). The decree confirmed to

each spouse an undivided one-half separate

property interest in the residence. The trial

court’s appointment of a receiver to sell the

residence arose from the husband’s request to

partition the residence by sale. The court of

appeals held that the trial court had authority,

under the general laws pertaining to partition

suits between cotenants, to order, concurrently

Receiverships and Drafting Requirements Chapter 11.2

with the divorce proceeding, that the residence

be partitioned by sale. The trial court

implicitly found that the residence was

incapable of partition in kind and that equity

required a partition by sale. Having the

authority to order a partition by sale, the trial

court was also authorized to appoint a receiver

to accomplish the sale.

Brawley v. Huddleston, No. 02-11-00358-CV (Tex.

App.—Fort Worth Dec. 6, 2012, no pet.) (mem. op.):

The trial court appointed a receiver to sell a

property. At a subsequent hearing about the

receiver’s fees, the receiver testified about her

fees and the problems that she had

encountered dealing with the spouses when

attempting to perform her duties as receiver.

Although she acknowledged that both

spouses’ attorneys had told her not to proceed

with the sale of the property, she explained

that she only takes instructions from the trial

court and that she had continued to perform

services as receiver because she was abiding

by the order of the court to do so.

The appellate court determined that because

there was no testimony or evidence relating to

whether the appointment of a receiver was

necessary for the preservation and protection

of the property, see Tex. Fam. Code section

6.502(a)(5), the appointment of the receiver

was reversed and rendered.

C. Temporary Orders During Appeal

Under Texas Family Code section 6.709(a)(3),

during an appeal, the trial court may appoint a receiver

for the preservation and protection of the property of the

parties. The trial court retains jurisdiction to enforce

such an order unless the appellate court supersedes the

order. Tex. Fam. Code § 6.709(b). After an appeal is

perfected, the trial court retains jurisdiction for sixty

days to conduct a hearing and sign an original temporary

order. Id. § 6.709(i).

The trial court retains jurisdiction

to modify and enforce a temporary order under section

6.709 unless the appellate court, on a proper showing,

supersedes the trial court’s order. Id. § 6.709(j). On the

motion of a party or on the court’s own motion, after

notice and hearing, the trial court may modify a previous

temporary order rendered under section 6.709 if the

circumstances of a party have materially and

Reminder: When deadlines are at stake, review the

current statute or rule! Do not rely on the time limits for

issuing temporary orders during an appeal set out in

Fuentes v. Zaragoza, 534 S.W.3d 658 (Tex. App.—

substantially changed since the rendition of the previous

order, and modification is equitable and necessary for

the preservation of the property or for the protection of

the parties during the appeal. Id. § 6.709(k).

D. Chapter 9 Enforcement

1. Generally

A trial court has inherent authority to appoint a

receiver to enforce its orders. See Young v. Young, 765

S.W.2d 440, 444 (Tex. App.—Dallas 1988, no writ);

Elliott v. Elliott, 422 S.W.2d 757, 758 (Tex. Civ. App.—

Fort Worth 1967, writ dism’d). The court that renders a

decree of divorce “retains the power” to enforce the

property division in the decree or in an agreement

incident to divorce that was approved by the court. Tex.

Fam. Code § 9.002; Pearson v. Fillingim, 332 S.W.3d

361, 363 (Tex. 2011). The court may enforce the

division of property made or approved in the divorce

decree by rendering further orders “to assist in the

implementation of or to clarify the prior order.” Tex.

Fam. Code. § 9.006(a). It may also “specify more

precisely the manner of effecting the property division

previously made or approved if the substantive division

of property is not altered or changed.” Id. § 9.006(b); see

also Walston v. Lockhart, 62 S.W.3d 257, 259 (Tex.

App.—Waco 2001, pet. denied). However, “[a]n order

to enforce the division is limited to an order to assist in

the implementation of or to clarify the prior order and

may not alter or change the substantive division of the

property.” Tex. Fam. Code § 9.007(a); see Young, 765

S.W.2d at 444; Sloan v. Sloan, 474 S,W.2d 272, 275

(Tex. Civ. App.—Waco 1971, no writ); Elliott, 422

S.W.2d at 758-59. An order that “amends, modifies,

alters or changes the actual, substantive division of

property made or approved in a final divorce decree” is

unenforceable and beyond the court’s power. Elliott,

422 S.W.2d at 758-59; McDowell v. McDowell, 705

S.W.2d 345, 347 (Tex. App.—Dallas 1986, no writ)

(appointment of receiver to enforce property division,

when appointment changed time at which property

would be sold, held unenforceable modification).

In a post-divorce petition for enforcement, the

application should first state one or more causes of

action within the jurisdiction of the court and then allege

facts that would entitle the applicant to relief. Associated

Bankers Credit Co. v. Meis, 456 S.W.2d 744, 749 (Tex.

Civ. App.—Corpus Christi 1970, no writ). Generally,

the application must show the necessity for the

appointment, the probability of ultimate recovery by the

applicant, and accurately describe the property to be

placed in receivership. Id.

Houston [1

Dist.] 2017, no pet.), which opinion

predates the 2017 amendments to Texas Family Code

section 6.709.

Receiverships and Drafting Requirements Chapter 11.2

2. Selected Appellate Cases

Perry v. Perry, 512 S.W.3d 523 (Tex. App.—Houston

Dist.] 2016, no pet.):

In Perry, the court of appeals held that the trial

court improperly modified the division of

property when it, in a post-divorce order,

appointed a receiver to sell a house in the

receiver’s sole discretion and upon terms and

conditions determined by the receiver. Id. at

529. The decree had not specified by when or

for how much the house must be sold. Under

the rules of contract construction, when

construing an agreement to avoid forfeiture,

the court may imply terms that can reasonably

be implied. If a divorce decree orders that

property be sold, but fails to specify a price,

the law presumes that the parties intended a

reasonable price. Likewise, if the decree fails

to specify a time for performance, the law

implies a reasonable time. Because the

divorce decree’s provisions did not specify by

when or for how much the house had to be

sold, the law provided these two missing

terms: the house had to be sold at a reasonable

time and for a reasonable price. Id. at 528. By

appointing a receiver to sell the house “in his

sole discretion ... upon terms and conditions

determined by him,” the trial court improperly

modified the division of property in the decree

of divorce. Id. at 528-29.

In re Lewis, 223 S.W.3d 756 (Tex. App.—Texarkana

2007, orig. proceeding):

The parties’ decree awarded each party an

undivided one-half separate property interest

in a tract of land. The decree also included that

a receiver would be appointed to sell the

mobile home and improvements on the land.

The trial court appointed a receiver to take and

sell a list of property. The receiver was not

ordered to take possession of or sell the land.

After the land was sold at auction, the receiver

filed a motion for authority to sell the real

estate “in his hands as Receiver.” The trial

court authorized the sale of the land.

The husband filed a mandamus action.

Because the decree did not provide for sale of

the land, the trial court was not authorized to

order the receiver to sell the land as part of an

enforcement action. Although the decree

provided for partition of the land, it did not

order sale of the land. The trial court abused

its discretion by issuing orders approving the

sale of the husband’s separate property.

Young v. Young, 765 S.W.2d 440 (Tex. App.—Dallas

1988, no writ):

In Young, the trial court, in an enforcement

and clarification action, appointed a receiver

to divide undivided property. Id. at 442. The

appellant asserted that it was error to appoint

a receiver because there was no evidence that

the property was in danger of being lost,

removed, or injured (citing Tex. Civ. Prac. &

Rem. Code § 64.001(b)). The court of appeals

disagreed, saying that the applicable statute

was the predecessor to Texas Family Code

chapter 9. Finding that a trial court has broad

powers to enlist the aid of a receiver to

effectuate its orders and judgments, the court

of appeals found no error in the appointment

of a receiver. Id. at 444.

McDowell v. McDowell, 705 S.W.2d 345, 347 (Tex.

App.—Dallas 1986, no writ):

In a post-decree action, the wife sought to

clarify and enforce the terms of the decree

awarding the marital residence to the husband

and one-half of the proceeds of the sale of the

property to the wife. The decree provided that

the property would be sold on the husband’s

remarriage or death, if the husband did not

occupy the property as his sole residence for a

period of six months or more, or when the

youngest child turned 18 or was otherwise

emancipated, none of which events had

occurred. The trial court granted the wife’s

motion and rendered an order appointing a

receiver to sell the property immediately and

to divide the proceeds equally between the

husband and the wife. The husband appealed.

The court of appeals held that the appointment

of a receiver to sell property was an

impermissible modification of the decree. The

entry of the order of sale was beyond the trial

court’s power and unenforceable.

Shultz v. Shultz, No. 05-18-00876-CV (Tex. App.—

Dallas June 18, 2019, no pet.) (mem. op.):

In Shultz, the decree provided that if the

marital residence was not sold within the

prescribed period of time, a specific person

was appointed the receiver to sell the property.

The property was to be sold at a price agreed

to by the spouses. The trial court appointed a

receiver, but the receivership order did not

Receiverships and Drafting Requirements Chapter 11.2

incorporate that the spouses must agree to the

sales price.

The receiver filed a report of sale and motion

for confirmation of sale, asking that the court

confirm the sale of the marital residence to the

wife for $900,000. The receiver did not seek

the husband’s agreement on the sales price.

The husband filed an emergency motion for

continuance seeking discovery on the

purchase price, asserting that higher offers for

the property had been tendered. The trial court

denied the motion. At the confirmation

hearing, the receiver testified about his

reasoning for accepting a sales price of

$900,000 from the wife instead of accepting a

$965,000 offer. The husband testified that he

was not kept informed on the sale and was not

allowed to inspect the house so that he could

determine the value. A real estate agent

testified that she had clients interested in the

property, but neither the receiver nor his agent

returned her calls or answered her inquiries.

The trial court confirmed the sale of the

property.

The husband appealed on ground that the

decree was improperly modified. The court of

appeals agreed. The trial court was required to

adhere to the literal language of the

unambiguous divorce decree. The provision

providing for the appointment of a receiver

did not give the receiver the power to set the

price; rather, the decree required mutual

agreement by the parties on the price. The trial

court’s failure to adhere to the value imposed

on the property in the decree improperly

modified the division of property. The trial

court’s orders appointing the receiver and

confirming the sale of property were vacated.

The case was remanded.

Moseley v. Grandee, No. 02-18-00123-CV (Tex.

App.—Fort Worth Jun. 21, 2018, no pet.) (mem. op.):

In Moseley, the husband was ordered to make

an equalization payment to the wife and did

not do so. The wife filed a motion for

enforcement. The husband asserted ambiguity

and requested clarification. The court

appointed a receiver. The husband appealed,

asserting that because he acted in good faith in

interpreting the decree and not paying the

judgment (asserting that he consulted with

two lawyers), the trial court abused its

discretion in appointing a receiver. The court

of appeals affirmed, holding that the trial court

did not abuse its broad discretion by

appointing a receiver to effectuate the

decree’s equalization judgment.

Vats v. Vats, No. 01-12-00255-CV (Tex. App.—

Houston [1

Dist.] 2012, no pet.) (mem. op):

In Vats, the wife filed a petition for

enforcement of the property division,

asserting that the husband failed to make a

good-faith effort to sell two parcels of land in

India, which the decree stated would be sold

and that neither party would obstruct the sale.

The wife further asserted that the husband had

impeded the sale and requested the trial court

to request and authorize the Indian court to

appoint a receiver in India to take control of

the properties and sell or auction them and

distribute the proceeds. The trial court ordered

as the wife requested. The husband appealed,

asserting that the trial court’s order

improperly attempted to engage the

jurisdiction of a foreign court. The court of

appeals disagreed and affirmed. The trial

court’s order was permissive in nature, stating

only that the Indian court was “requested and

authorized” to order the parties to sell the

properties. The order sought to expedite a

ruling by an Indian court to reduce the wife’s

wait for a final judgment. Further, the order

was not a substantial modification of the

decree. The decree was clear that the parties

intended to sell the property. The trial court’s

order merely specified a more precise manner

of effectuating the property division.

E. Agreed Receivership Appointments

Parties to a dissolution proceeding can agree to the

appointment of a receiver. See generally Tex. R. Civ. P.

11; Tex. Fam. Code § 6.502. However, if an agreement

is reached to appoint a receiver, the appointment shall

not be set aside if one of the parties becomes dissatisfied

with the receivership or the receiver unless there is

evidence of accident, fraud, mistake, collusion, or a

change of conditions. Logan v. Mauk, 126 S.W.2d 513,

515 (Tex. Civ. App.—Amarillo 1939, writ dism’d); see

also In re Marriage of Davis, 418 S.W.3d 684 (Tex.

App.—Texarkana 2012, no pet.). In Davis, a receiver

was appointed pursuant to the parties’ Rule 11

Agreement, entered into while the divorce was pending,

to preserve and sell assets of a horse farm, Fox Crest

Farm, LLC. The husband complained on appeal that the

receiver was not qualified, but he waived that complaint

because he requested the appointment of the specific

receiver and did not raise any disqualification issue until

four months after the receiver’s appointment.

Receiverships and Drafting Requirements Chapter 11.2

IV. POWERS AND DUTIES OF RECEIVER

A. Generally

A receiver is a non-party and disinterested in the

outcome of the case, appointed by the court to receive

and preserve the property or fund in litigation pendente

lite. Tex. Civ. Prac. & Rem. Code § 64 .021(b); Wiley v.

Sclafani, 943 S.W.2d 107, 110 (Tex. App.—Houston

Dist.] 1997, no writ); Chemical Eng’g Serv., Inc. v.

Tomlinson, 750 S.W.2d 375 (Tex. App.—Beaumont

1988, no writ); Harmon v. Schoepple, 730 S.W.2d 376,

381 (Tex. App.—Houston [14

Dist.] 1987, no writ). A

receiver is an officer of the court charged with carrying

out the court’s orders. Ex parte Griffitts, 711 S.W.2d

225, 226 (Tex. 1986). All favorable presumptions must

be indulged as to the rectitude of the receiver’s official

conduct. DeWitt v. Republic Nat’l Bank of Texas, 168

S.W.2d 710, 716 (Tex. Civ. App.—Dallas 1943, writ

ref’d w.o.m.). The receiver is not appointed for the

benefit of the applicant but “to receive and preserve the

property for the benefit of all parties interested therein.”

Sloan v. Sloan, 474 S.W.2d 272, 275 (Tex. Civ. App.—

Waco 1971, no writ); Abilene Sav. Ass’n v. Roderick,

418 S.W.2d 695, 696 (Tex. Civ. App.—Eastland 1967,

no writ).

B. Qualifications

The receiver must be both a Texas resident and

qualified voter. Tex. Civ. Prac. & Rem. Code §

64.021(a); Pena v. Sell, 760 S.W.2d 811, 812 (Tex.

App.—Amarillo 1988, no writ). Residency must be

maintained during the pendency of receivership. Tex.

Civ. Prac. & Rem. Code § 64.021(c). If these

qualifications are not met, the receivership is void as to

property in Texas. Id.

Although the receiver does not have to be a

licensed professional of any kind, such a person may be

preferred because of the professional’s expertise and

potential cost savings. It is also a good idea to inquire as

to whether the court has a pre-approved list of receivers.

C. Activities

Subject to the control of the court, a receiver may:

(1) take charge and keep possession of the

property;

(2) receive rents;

(3) collect and compromise demands;

(4) make transfers; and

(5) perform other acts in regard to the property as

authorized by the court.

Tex. Civ. Prac. & Rem. Code § 64.031. The duties of a

receiver are imposed as of the date the order is signed.

Conner v. Guemez, No. 02-10-00211-CV (Tex. App.—

Fort Worth Nov. 24, 2010, no pet.) (mem. op.). The

receiver must act within the powers conferred by the

order, and the order must operate within the confines of

the statute. Ex parte Hodges, 625 S.W.2d 304, 306 (Tex.

1981). If the receiver needs additional instructions, the

receiver should file with the court a motion requesting

the needed instructions.

D. Ability to Bring Suits

A receiver may bring suits in the receiver’s official

capacity without permission of the appointing court.

Tex. Civ. Prac. & Rem. Code § 64.033. Unless

inconsistent with Chapter 64 of the Civil Practice &

Remedies Code or other general law, the rules of equity

govern all matters relating to the appointment, powers,

duties, and liabilities of a receiver and to the powers of

a court regarding a receiver. Id. § 64.004.

E. Receiver’s Oath

Before a person assumes the duties of a receiver,

the person must be sworn to perform the duties

faithfully. Id. § 64.022. The oath is prepared and filed

with the court.

F. Receiver’s Bond

The receiver is also required to execute a bond in

an amount fixed and approved by the appointing court,

“conditioned on faithful discharge” of the receiver’s

duty. Id. § 64.023. However, the receiver is not required

to post a bond in all dissolution cases. Tex. R. Civ. P.

695a; Tex. Fam. Code § 6.503(b); see Poston v. Poston,

572 S.W.2d 800, 804 (Tex. Civ. App.—Houston [14

Dist.] 1978, no writ). When the receivership affects third

parties, a failure of the court to set the bond and the

receiver’s failure to post the bond may make the

receivership reversible. King Land & Cattle Corp. v.

Fikes, 414 S.W.2d 525, 525 (Tex. Civ. App.—Fort Worth

1967, no writ); O’Connor v. O’Connor, 320 S.W.2d 384,

391 (Tex. Civ. App.—Dallas 1959, writ dism’d); Bell v.

Bell, 204 S.W.2d 527, 528 (Tex. Civ. App.—San

Antonio 1947, no writ).

G. Custodia Legis

Property held by a receiver is in custodia legis (“in

the custody of the law”). Moody v. State, 538 S.W.2d

158, 161 (Tex. Civ. App.—Waco 1976, writ ref’d).

Consequently, the receivership property is not subject to

foreclosure, attachment, garnishment, sequestration,

levy, or sale under execution, unless the creditor

receives the permission of the court in which the

receivership is pending. Huffmeyer v. Mann, 49 S.W.3d

554, 560 (Tex. App.—Corpus Christi 2001, no pet.);

First S. Props., Inc. v. Vallone, 533 S.W.2d 339, 341

(Tex. 1976). The receivership suspends the rights of

other parties until the court having custody of the

property enforces those rights. Id. at 343.

Whenever a court has appointed a receiver for an

individual, corporation or partnership, the jurisdiction of

that court attaches to the property of said individual,

corporation or partnership, although the receiver has not

Receiverships and Drafting Requirements Chapter 11.2

qualified, or taken possession of the property.

Huffmeyer, 49 S.W.3d at 559-60 (citing Riesner v. Gulf,

C. & S.F. Ry. Co., 36 S.W. 53, 54 (Tex. 1896)); see also

Cline v. Cline, 323 S.W.2d 276, 282 (Tex. Civ. App.—

Houston [1

Dist.] 1959, writ ref’d n.r.e.). The

appointment of the receiver relates back to the

presentation of the application to the judge and the

judge’s recognition of the same by setting it down for

hearing. Huffmeyer, 49 S.W.3d at 560 (citing Baylor

Univ. v. Chester Sav. Bank, 82 S.W.2d 738, 744 (Tex.

Civ. App.—Waco 1935, writ ref’d)).

When a trial judge has determined that the matter

will be investigated and will appoint a receiver at some

future date, the property is thereafter considered in the

custody of the law, and is not liable to the possession or

jurisdiction of any other court. Huffmeyer, 49 S.W.3d at

560 (citing La Rue Holding Co. v. Essex, 45 S.W.2d

319, 320 (Tex. Civ. App.—Fort Worth 1931, no writ)).

Receivers have no greater right to the property than

the right of the property’s owner at the time the receiver

was appointed. In re Renfro, 273 S.W. 813, 814 (Tex.

1925). Consequently, the receiver does not have the

power to take possession of property if a stranger to the

litigation has possession of the property. Ex parte

Britton, 92 S.W.2d 224, 226 (Tex. 1936). In that

situation, the receiver can either bring suit to gain

possession of the property or the receiver can make the

third party a party to the proceeding in which the

receivership is pending. Id.

A court is also limited in its ability to appoint a

receiver for shares in a corporation. In Norem v. Norem,

105 S.W.3d 213 (Tex. App.—Dallas 2003, no pet.), the

trial court appointed a receiver at the request of the wife

for the community property shares in corporations

operated and controlled by the husband. The husband

was not the sole shareholder of the corporations at issue,

and there was no evidence admitted regarding what

rights the shareholders held. The court authorized the

receiver to call meetings, elect the board of directors,

sell corporate property, and negate corporate contracts.

The court of appeals found that the trial court abused its

discretion in granting certain rights to a receiver of

corporate shares, when there was no evidence of the

powers of the husband’s shares. The court may limit a

receiver’s rights and powers to less than that of a

shareholder but may not grant the receiver rights or

powers of which there is no evidence that the

shareholder possesses. Id. at 217.

H. Lis Pendens

In the case of a receivership over real property, it

may also be necessary to file a Notice of Lis Pendens

reflecting the appointment. A Notice of Lis Pendens

may avoid potential miscommunications and added

expense to undo a foreclosure. “No one has the

authority, even under a prior deed of trust or execution,

to sell property held in custodia legis by a duly

appointed receiver, unless the sale is authorized by the

court in which the receivership is pending.” First S.

Prop. Inc. v. Vallone, 533 S.W.2d 339, 341 (Tex. 1976).

The lien is not extinguished, but the enforcement of the

lien is suspended until enforcement is approved by the

court having custody. American Bank/West Side v.

Haven, 728 S.W.2d 102, 104 (Tex. Civ. App.—Fort

Worth 1987, no writ).

I. Inventory

A receiver is required to file an inventory as soon

as possible after appointment. Tex. Civ. Prac. & Rem.

Code § 64.032. Although the Texas Family Code does

not require an inventory, a careful receiver will comply.

J. Receiver’s Fees

A receiver’s fees are considered court costs and are

governed by the rules applicable to awarding court

costs. Hill v. Hill, 460 S.W.3d 751, 767 (Tex. App.—

Dallas 2015, pet. denied) (citing Jones v. Strayhorn, 321

S.W.2d 290, 293 (Tex. 1959)). Those rules provide that

the trial court is responsible for adjudicating which party

or parties will bear the costs of court. Diggs v. VSM Fin.,

L.L.C., 482 S.W.3d 672, 674 (Tex. App.—Houston [1

Dist.] 2015, no pet.); see Tex. R. Civ. P. 131, 141. Fees

and expenses of a receiver are entitled to top priority.

Jones, 321 S.W.2d at 293; State v. B & L Landfill, Inc.,

758 S.W.2d 297, 300 (Tex. App.—Houston [1

Dist.]

1988, no writ); Jordan v. Burbach, 330 S.W.2d 249, 252

(Tex. Civ. App.—EI Paso 1959, writ ref’d n.r.e.).

Further, the attorney’s fees and related expenses

incurred by a receiver also constitute “court costs.”

Jordan, 330 S.W.2d at 252; Mid-Continent Supply Co.

v. Conway, 240 S.W.2d 796, 807 (Tex. Civ. App.—

Texarkana 1951, writ ref’d n.r.e.). To the extent a

receivership generates any earnings, the receiver, along

with the receiver’s attorney’s fees, are entitled to be

preferentially paid from those earnings. Shell Petroleum

Corp. v. Grays, 87 S.W.2d 289, 293 (Tex. Civ. App.—

Waco 1935, writ dism’d). That same priority also

applies in cases in which the receiver sells the entire

corpus of the receivership. See, e.g., Mid-Continent

Supply, 240 S.W.2d at 807.

As long as the order appointing the receiver is not

void, the receiver is entitled to be paid even if it is

subsequently determined that the receivership is

adjudged to be wrongful. See Shell Petroleum, 87

S.W.2d at 293; Payne v. Little Kar Co., 266 S.W. 597,

598 (Tex. Civ. App.—Waco 1924, writ dism’d w.oj.).

K. Receiver’s Report

The receiver’s final report may be contained within

another pleading, such as the receiver’s application to

confirm sale. The final report is a requirement of case

law only. See generally Bergeron v. Sessions, 561

S.W.2d 551, 553 (Tex. Civ. App.—Dallas 1977, writ

ref’d n.r.e.); Harrington v. Schuble, 608 S.W.2d 253,

Receiverships and Drafting Requirements Chapter 11.2

256 (Tex. Civ. App.—Houston [14

Dist.] 1980, no

writ). The report should explain what was done by the

receiver, account for all remaining property in the

receiver’s possession, account for expenses paid, and

request the court to: direct the payment of expenses

(including the receiver’s fees) and the disposition of the

proceeds, confirm all acts of the receiver, discharge the

receiver and the receiver’s surety (if any), and release

the receiver of any liability.

V. CHALLENGING APPOINTMENT OF

RECEIVER

A. General Immunity

Absolute immunity extends to all judicial acts

unless such acts fall clearly outside of the judge’s

subject-matter jurisdiction. Hawkins v. Walvoord, 25

S.W.3d 882, 890 (Tex. App.—El Paso 2000, no pet.);

Garza v. Morales, 923 S.W.2d 800, 802 (Tex. App.—

Corpus Christi 1996, no writ). When judges delegate

their authority or appoint persons to perform services for

the court, their judicial immunity may follow that

delegation or appointment. Hawkins, 25 S.W.3d at 891;

Byrd v. Woodruff, 891 S.W.2d 689, 707 (Tex. App.—

Dallas 1994, writ dism’d by agr.).

In Texas, judicial immunity applies to officers of

the court who are integral parts of the judicial process,

such as court-appointed receivers. Hawkins, 25 S.W.3d

at 891; Byrd, 891 S.W.2d at 707. Court-appointed

receivers are entitled to share in the appointing judge’s

absolute immunity, provided that the challenged actions

were taken in good faith and were within the scope of

the authority granted to the receiver. Davis v. Bayless,

70 F.3d 367, 373 (5

Cir. 1995); see also Brewer v Hill,

453 F. Supp. 67, 69 (N.D. Tex, 1978); Byrd, 891 S.W.2d

at 708; Conner v. Guemez, No. 02-10-00211-CV, at *3

(Tex. App.—Fort Worth Nov. 24, 2010, no pet.) (mem.

op.) (receiver functioning as arm of court in divorce case

protected by derived judicial immunity).

A receiver is not required to have infallible

judgment in transacting the receivership business, but is

required only to exercise the same degree of discretion

in discharging the duties of the receivership as the

ordinarily prudent person of business would exercise in

the management of the receiver’s own affairs. Morrow

v. De Vitt, 160 S.W.2d 977, 985 (Tex. Civ. App.—

Amarillo 1942, writ ref’d w.o.m.). Thus, a receiver

acting within the authority granted is not personally

responsible for any loss accruing during the operation of

the receivership business unless the receiver acted in

bad faith or failed to use ordinary care and discretion in

the management of the business. Harrisan v. Coutret,

157 S.W.2d 454, 456 (Tex. Civ. App.—San Antonio

1942, writ ref’d).

A receiver’s actions may be set aside if the court

finds them sufficiently irregular. Harrington v. Schuble,

608 S.W.2d 253, 256 (Tex. Civ. App.—Houston [14

Dist.] 1980, no writ) (setting aside receiver’s actions for

failure to provide notice to all interested parties and

failure to set hearing and hearing on application for sale

of property).

B. Jury Trial

A party is not entitled to a jury trial on the factual

issue of whether a receiver should be appointed, nor is a

party entitled to have a jury decide virtually any other

issue in a receivership proceeding. Such power lies

solely within the court’s discretionary powers. Moody v.

State, 538 S.W.2d 158, 161 (Tex. Civ. App.—Waco

1976, writ ref’d); Bergeron, 561 S.W.2d at 269.

C. Termination by Parties

The court must terminate an order for a

receivership if requested to do so by both spouses,

because the only purpose of the receivership is to protect

the spouses in the dissolution proceeding and preserve

their property. Mallou v. Payne & Vendig, 750 S.W.2d

251, 255 (Tex. App.—Dallas 1988, writ denied).

VI. APPEALING RECEIVERSHIP ORDER

A. On Temporary Orders in Pending Case

1. Interlocutory Appeal

An order appointing a receiver on temporary orders

can be subject to an interlocutory appeal. Tex. Fam.

Code § 6.507. The filing of an interlocutory appeal will

not automatically stay the appointment of the receiver.

See, e.g., Fuentes v. Zaragoza, 534 S.W.3d 658, 666

(Tex. App.—Houston [1

Dist.] 2017, no pet.)

(appellant requested that court of appeals stay temporary

orders, including appointment of receiver). Failure to

challenge the appointment of a receiver under section

6.502 by interlocutory appeal can waive the right to

challenge the appointment. Sclafani v. Sclafani, 870

S.W.2d 608, 611 (Tex. App.—Houston [1

Dist.] 1993,

writ denied) (appeal of receivership order must be

exercised within 20 days after order entered; complaint

on appeal 5 years after receivership order entered

waived), but see Brawley v. Huddleston, No. 02-11-

00358-CV, at **7-8 (Tex. App.—Fort Worth Dec. 6,

2012, no pet.) (mem. op.) (direct appeal from

interlocutory order available because a person “may”

pursue an interlocutory appeal under Tex. Civ. Prac. &

Rem. Code § 51.014(a)). The appointment of a receiver

will not be disturbed on appeal, absent a clear abuse of

discretion. Chase Manhattan Bank v. Bowles, 52

S.W.3d 871, 879 (Tex. App.—Waco 2001, no pet.);

Smith v. Smith, 681 S.W.2d 793, 795 (Tex. App.—

Houston [14

Dist.] 1984, no writ).

Note: If you request a de novo hearing of an

appointment of a receiver by an associate judge, a

proposed order or judgment of the associate judge is in

full force and effect and is enforceable as an order or

judgment of the referring court, except for an order

providing for the appointment of a receiver. Tex. Fam.

Code § 201.013(a).

Receiverships and Drafting Requirements Chapter 11.2

2. Findings of Fact and Conclusions of Law Required

No Later Than Seven Days After Receiver

Appointed

If a receiver is appointed on temporary orders, the

trial court must issue findings of fact and conclusions of

law no later than seven days after the receiver is

appointed. Tex. Fam. Code § 6.502(a)(5).

If the trial

court dispenses with the issuance of a bond between the

spouses as provided by Texas Family Code section

6.503(b) in connection with the receiver’s appointment,

the court shall include in the court’s findings an

explanation of the reasons the court dispensed with the

issuance of a bond. Id.

3. Interlocutory Appeal Accelerated: Notice of

Appeal Due Within Twenty Days After Receiver

Appointed

An appeal from an interlocutory order, which in the

family law context is limited to the appointment of a

receiver, must be accelerated. Tex. Fam. Code § 6.507;

Tex. R. App. P. 28.1. Accelerated appeals are given

preference over other appeals and are put on a faster

track in the appellate court. See Tex. R. App. P. 26.1. An

accelerated appeal is perfected by filing a notice of

appeal in the trial court, Tex. R. App. P. 25.1(a), within

20 days after the order appointing the receiver is signed.

Tex. R. App. P. 26.1(b). Filing a motion for new trial,

any other post-trial motion, or a request for findings of

fact and conclusions of law will not extend the time to

perfect an accelerated appeal. Tex. R. App. P. 28.1(b).

4. Standard of Review

An appellate court reviews an appointment of a

receiver for an abuse of discretion. Sheikh v. Sheikh, 248

S.W.3d 381, 386 (Tex. App.—Houston [1

Dist.] 2007,

no pet.); Moyer v. Moyer, 183 S.W.3d 48, 51 (Tex.

App.—Austin 2005, no pet.); Vannerson v. Vannerson,

857 S.W.2d 659, 673 (Tex. App.—Houston [1

Dist.]

1993, writ denied).

5. Certain Orders Not Appealable

a. Order Denying Appointment of Receiver

An order denying the appointment of a receiver is

an interlocutory order not subject to appeal. Holman v.

Stephen F. Austin Hotel, 599 S.W.2d 679, 679 (Tex.

Civ. App.—Austin 1980, writ dism’d); but see Balias v.

Balias, Inc., 748 S.W.2d 253, 255 (Tex. App.—Houston

[14

Dist.] 1988, writ denied) (holding that denial of

appointment of receiver appealable if appointment is

sole issue) (op. on reh’g).

For a great example of Findings of Fact and

Conclusions of Law supporting the appointment of a

receiver on temporary orders, see Appendix 2 to Chris

b. Order Dissolving Receivership

An order dissolving a receivership also is not

appealable. Waite v. Waite, 76 S.W.3d 222, 223 (Tex.

App.—Houston [1

Dist.] 2002, no pet.).

c. Order Directing Receiver to Sell Receivership

Property

An order directing a receiver to sell receivership

property is an interlocutory order not subject to appeal,

but it may be challenged in a mandamus action. See

Plaza Court, Ltd. v. West, 879 S.W.2d 271, 275-76 (Tex.

App.—Houston [14

Dist.] 1994, orig. proceeding).

d. Property Sold After Appeal Perfected Renders

Appeal Moot

When a court appoints a receiver to sell real

property, and the real property is sold after the appellant

has perfected its appeal, the appeal of the appointment

of the receiver becomes moot. See Beard v. Beard, 49

S.W.3d 40, 72 (Tex. App.—Waco 2001, pet. denied)

(concluding that appeal of appointment of receiver was

moot when real property that was sole subject of

receivership had been foreclosed upon after appellant

perfected appeal).

B. On Final Orders

1. Generally

Procedures for the appeal of the appointment of a

receiver in a final order are the same as with appeals of

other final orders. Usually, a notice of appeal must be

filed within thirty days after the judgment is signed. Tex.

R. App. P. 26.1. The notice must be filed within ninety

days after the judgment is signed if any party timely files

a motion for new trial, a motion to modify the judgment,

a motion to reinstate after a dismissal for want of

prosecution, or a request for findings of fact and

conclusions of law if findings and conclusions are

required by the Texas Rules of Civil Procedure or, if not

required, could be properly considered by the appellate

court. Tex. R. App. P. 26.1(a).

2. Order Approving Receiver’s Final Report and/or

Final Fees Appealable

An order approving the receiver’s final report and

order to discharge receiver are appealable. Theatres of

America, Inc. v. State, 577 S.W.2d 542, 547 (Tex. Civ.

App.—Tyler 1979, no writ). An order approving the

final receiver’s fees is also appealable. Pink v. State, 105

S.W.2d 265 (Tex. Civ. App.—Austin 1937), aff’d, 124

S.W.2d 981, 987 (Tex. 1939).

Nickelson’s Findings of Fact and Conclusions of Law,

State Bar of Texas Advanced Family Law Drafting 12

(2015).

Receiverships and Drafting Requirements Chapter 11.2

C. On Temporary Orders During Appeal

A temporary order issued during an appeal under

Texas Family Code section 6.709 is not subject to

interlocutory appeal. Tex. Fam. Code § 6.709(m).

D. Mandamus

Occasionally, mandamus may be available to

challenge receivership orders authorizing the seizure

and sale of assets. See, e.g., Plaza Court, Ltd v. West,

879 S.W.2d 271, 275-76 (Tex. App.—Houston [I4

Dist.] 1994, no writ) (finding that the parties in

receivership had no adequate remedy by appeal because

their assets could have been completely disposed of by

the receiver before the conclusion of appeal); Sheikh v.

Sheikh, 248 S.W.3d 381, 394 (Tex. App.—Houston [1

Dist.] 2007, no pet.) (post-judgment order appointing

master in chancery, even one that is embedded in

turnover and receivership order, is interlocutory and

unappealable but may be challenged by mandamus).

Mandamus will not issue when there is a clear and

adequate remedy by a normal appeal, because

mandamus is intended to be an extraordinary remedy

available only in limited situations. Plaza Court, Ltd.,

879 S.W.2d at 275-76. A writ of mandamus will issue

to correct a clear abuse of discretion when there is no

adequate appellate remedy. In re North Cypress Med.

Ctr. Oper. Co., 559 S.W.3d 128, 130 (Tex. 2018); In re

State Farm Lloyds, 520 S.W.3d 595, 604 (Tex. 2017).

VII. APPENDIX

Attached to this paper are the following sample

forms:

A. Motion to Appoint Receiver

B. Sample Order: Appointment of Receiver on

Temporary Orders

C. Sample Order: Post-Decree Appointment of

Receiver

D. Checklist for the sale of a residence by a

receiver