A state Court of Appeals in Texas has reversed a trial court order appointing a post-judgment receiver to collect on a credit card judgment, ruling that the plaintiff offered no evidence to support its motion.
The background: The plaintiff sued the defendant over an unpaid balance on a credit card account, and after a bench trial four years ago, the trial court entered a final judgment awarding the plaintiff its damages, court costs, and post-judgment interest.
- The judgment allegedly went unpaid. Last year, the plaintiff served the defendant with several post-judgment discovery requests.
- About a month later, the defendant served his responses and filed a notice with the trial court, backed by a certificate of service, stating that he “serves this day … RESPONSES to the set of discovery requests served by the Plaintiff.”
- The plaintiff then filed a motion to appoint a post-judgment receiver, asserting that the defendant had failed to respond to the discovery requests at all and relying on deemed admissions to establish its right to relief. The motion was not verified, sworn, or supported by an affidavit.
- The motion was actually filed by a company claiming to be the plaintiff’s successor by merger. The defendant argued on appeal that the company lacked standing because there was no evidence of any merger in the record.
- The trial court granted the motion and appointed a receiver, and the defendant appealed.
The ruling: The Appeals Court reversed the order and sent the case back for further proceedings, ruling that the trial court abused its discretion because the plaintiff never met its evidentiary burden.
- Under the Texas turnover statute, a judgment creditor must show that a judgment exists, that it remains unpaid, and that the debtor owns non-exempt property. Quoting one of its earlier rulings, the Appeals Court noted that “[s]imply filing an application or motion for turnover relief does not suffice.”
- The defendant’s certificate of service created a legal presumption that his discovery responses were served on time. The plaintiff’s unsworn assertion that he “failed to respond” was not evidence and could not rebut that presumption, so the plaintiff was not entitled to rely on deemed admissions.
- The plaintiff never argued that the responses were incomplete, inadequate, or made in bad faith, only that they did not exist. The plaintiff also did not file a brief on appeal, leaving unchallenged the parts of the record showing the responses were actually served.
- With the deemed admissions off the table, the plaintiff offered no other evidence that the judgment remained unpaid or that the defendant owned non-exempt property.
- Because the case was being sent back anyway, the Appeals Court did not address the defendant’s argument that the successor company lacked standing to seek the receiver.
