Opinion
No. 01-07-00273-CV
Opinion issued January 17, 2008.
On Appeal from the 152nd District Court Harris County, Texas Trial Court Cause No. 2003-69942.
Panel consists of Justices TAFT, HANKS, and HIGLEY.
MEMORANDUM OPINION
In this interlocutory appeal, appellants, Diana Fite, M.D. and Patrick G. Woods, M.D., appeal the trial court's order reappointing James Raymond as receiver for Brazos Emergency Physicians Association, P.A. ("BEPA"), arguing that (1) no valid basis was established for placing BEPA into receivership; (2) James Raymond is unfit to serve as receiver; and (3) the bond provisions of the reappointment order rendered the order per se invalid. In raising a cross-issue, appellees contend that the trial court erred in finding that the original receivership expired and that appellants' proper remedy does not lie in this appeal. We agree with appellees and dismiss for want of jurisdiction.
TEX. CIV. PRAC. REM. CODE ANN. § 51.014(A)(1) (Vernon 2007).
Facts
The parties to this cause and its numerous related lawsuits, who have spent nearly four years battling each other in court, all share a connection to BEPA, a professional association formed in 1997 to provide hospitals with physicians for their emergency care facilities. In 1999, BEPA entered into an agreement for billing, marketing, and management services with appellee, Emtel, Inc., wherein Emtel would receive 30% from all fees collected on behalf of BEPA that are not associated with telemedicine contracts. Degioanni was the sole director of Emtel.
In 2003, appellant, Patrick G. Woods, M.D., a member of BEPA, filed a derivative suit against appellee, Joseph Degioanni, M.D., who, at the time, was BEPA's president and treasurer. Woods alleged that Degioanni had misappropriated funds to benefit Emtel. Shortly thereafter, after a "secret board meeting" that was conducted by cell phone in a parking garage, Degioanni was ousted as president of BEPA and Degioanni's and Emtel's access to the bank accounts and lock boxes was limited. Degioanni, along with Emtel, filed individual and derivative actions seeking injunctive relief against two members of the BEPA board of directors, appellant, Diana Fite, M.D. and Medford Cashion, M.D. The second derivative suit is the suit before us.
In this second derivative suit, Emtel and Degioanni, individually and on behalf of BEPA, applied for a temporary restraining order, temporary injunction, and motion to compel arbitration, asserting that "the harm caused by preventing Emtel from access to BEPA bank accounts and lock boxes is irreparable and imminent. The recent actions by Dr. Cashion on behalf of BEPA have caused BEPA to be in clear breach of the Agreement. . . ." Emtel and Degioanni sought a temporary injunction and restraining order requiring Cashion and Fite to "restore the status quo with regard to BEPA's bank accounts and lock boxes." On December 30, 2003, the trial court issued an ex parte temporary restraining order to "maintain status quo pending resolution of this case."
The court referred to it as an "ex parte" because Cashion's and Fite's counsel "apparently chose not to appear" at the hearing.
Almost two weeks later, the trial court heard Emtel and Degioanni's application for temporary injunction. On January 20, 2004, the parties agreed to and the trial court appointed a receiver, James Raymond, to act as BEPA's sole director and president and to take charge and conduct the affairs of BEPA. The trial court also ordered that the "receivership continue in effect until further order of this court."
The parties continued to litigate. Among other courses of action, Raymond negotiated, through his counsel, a series of agreements that, subject to the trial court's approval, would settle some of the litigation involving BEPA. On February 20, 2007, Raymond moved for approval of numerous settlement agreements releasing BEPA's claims against Degioanni and several other parties. Fite and Woods contested the motion and, relying on the Texas Civil Practice and Remedies Code's receivership provisions, argued that Raymond lacked the power to act on BEPA's behalf because his status as receiver had expired on January 20, 2007 — three years after his appointment. In response, Degioanni and Emtel argued that Raymond was appointed pursuant to the Business Corporations Act; therefore, his appointment did not terminate until "the condition necessitating the appointment of a receiver has been remedied." Degioanni and Emtel then enumerated several reasons why the receiver was still necessary. The trial court reappointed Raymond "under the same terms and conditions as in the [2004] original order" to continue until "90 days after the completion of the litigation that has been initiated by [Raymond] including any appeals which may arise from that litigation and the distribution of any funds obtained thereby." Fite appeals the reappointment order and Woods joins as an intervenor.
These agreements constituted: (1) a settlement agreement to settle BEPA's claims against Drs. Fite and Woods; (2) an allocation agreement to settle cross-claims between BEPA and Emtel, Inc. over potential proceeds from claims against The Methodist Hospital, Neptune, and the Neptune physicians; and (3) a settlement agreement to settle BEPA's claims against Drs. Eric Schroeder and Dan Burian.
Applicable Law
In a cross-issue, Degioanni and Emtel contend that the original appointment of Raymond as receiver never expired and that the trial court erred in considering the receivership vacated. We agree.
Drs. Fite and Woods contend that, because they did not file a notice of appeal, Degioanni and Emtel cannot assert cross-issues. The cross-issues, however, do not attempt to alter the judgment. We may not grant a party who does not file a notice of appeal more favorable relief than did the trial court except for just cause. TEX. R. APP. P. 25.1. Degioanni and Emtel agree that Raymond should remain as the receiver either by way of the original appointment or under the recent re-appointment.
The two statutes, the Texas Civil Practice and Remedies Code ("CPRC") and the Texas Business Corporation Act ("the Act"), that potentially control the resolution of this question, differ substantially. Under the CPRC, receiverships expire three years after the receiver is appointed and can only be extended in certain circumstances, and even then, only upon the application of a party and after a hearing. See TEX. CIV. PRAC. REM. CODE ANN. § 64.072 (Vernon 1997). Section 64.072(a) specifically provides as follows:
Limited Duration
(a) Except as provided by this section, a court may not administer a corporation in receivership for more than three years after the date the receiver is appointed, and the court shall wind up the affairs of the corporation within that period.
Id.
Article 7.05 of the Act, on the other hand, is much more open-ended; it provides only that a receivership shall be terminated by the court when the condition necessitating the appointment of a receiver is remedied. See TEX. BUS. CORP. ACT ANN. art. 7.05, § B, art. 7.06, § B (Vernon 2003). Article 7.05 specifically provides as follows:
Appointment of Receiver to Rehabilitate Corporation
A. A receiver may be appointed for the assets and business of a corporation . . ., whenever circumstances exist deemed by the court to require the appointment of a receiver to conserve the assets and business of the corporation and to avoid damage to parties at interest. . . .
. . .
B. In the event that the condition of the corporation necessitating such an appointment of a receiver is remedied, the receivership shall be terminated forthwith and the management of the corporation shall be restored to the directors and officers. . . .
Id. Because the Act does not discuss durational limits, we must conclude that receiverships created under the Act do not expire. See Neurobehavioral Assocs., P.A. v. Cypress Creek Hosp., Inc., 995 S.W.2d 326, 330 (Tex.App.-Houston [1st Dist.] 1999, no pet.) ("[E]very word excluded from a statute must be presumed to have been excluded for a purpose.") (citing Cameron v. Terrell Garrett, Inc., 618 S.W.2d 535, 540 (Tex. 1981)).
In their reply brief, Drs. Fite and Woods argue that the time limits on corporate receiverships imposed by the CPRC apply to all corporate receiverships, even those established under the Act. We disagree. The Bar Committee comments accompanying the Act explain that the Act's receivership provisions are meant to stand alone and not to be subject to those of other statutes:
Heretofore receiverships for corporations or their assets have not been the subject of separate treatment in the statutes but have been governed by Articles 2293 et seq., Tex.R.C.S. (1925), relating generally to receiverships. These general provisions will continue to be applicable to receiverships other than those for corporations subject to the Act or their assets. . . .
The referenced provisions were the statutory predecessors to Chapter 64 of the CPRC. Former Article 2317 of the Revised Civil Statutes became § 64.072 in 1985. See TEX. CIV. PRAC. REM. CODE ANN. § 64.072 historical note (Vernon 1997).
TEX. BUS. CORP. ACT ANN. art. 7.04 cmt. (Vernon 2003) (emphasis added).
Degioanni and Emtel argue that the receivership of BEPA was created under the Act, not the CPRC. We agree that the Act applies.
In 1969, the Texas Legislature passed a statute, the Texas Professional Association Act ("TPAA") that generally governs professional associations such as BEPA. See TEX. REV. CIV. STAT. ANN. art. 1528f (Vernon 2003 Supp. 2006). However, Section 25 of the TPAA incorporates the Act, mandating that the Act shall be applicable to professional associations unless there is a conflict between it and the TPAA. See id. § 25. Based on the plain language of Section 25, we have previously held that the legislature intended for the Act to resolve issues unaddressed by the TPAA. See Neurobehavioral, 995 S.W.2d at 331 ("[W]e believe the legislature intended for the [Act] to fill in the gaps where the TPAA was silent.") (citing Mem'l Hosp. — The Woodlands v. McCown, 927 S.W.2d 1, 4 (Tex. 1996) ("Where a statute is unambiguous, a court must seek the intention of the Legislature as found in the plain and common meaning of the words and terms used.")). The TPAA makes no mention of receiverships or, for that matter, the CPRC. See TEX. REV. CIV. STAT. ANN. art. 1528f. We, therefore, hold that the Act controls the administration of the receivership of a professional association formed under the TPAA, including BEPA. Because Raymond's receivership could not expire and had never been otherwise vacated, the trial court's order reappointing Raymond was a legal nullity.
In relevant part, Section 25 reads: "The Texas Business Corporation Act shall be applicable to professional associations, except to the extent that the provisions of the Texas Business Corporation Act conflict with the provisions of this Act. . . ." Fite contends that Degioanni and Emtel "attempt to manufacture a conflict between the provisions of the CPRC and the TBCA regarding expiration of receiverships." The "conflict" anticipated by the statute would arise between the TPAA and the TBCA/"the Act." There is no reference to the CPRC. Accordingly, the Act applies, and Degioanni and Emtel need to show any conflict with the CPRC.
Degioanni and Emtel further contend that Drs. Fite and Woods's proper remedy lies in a motion to terminate or modify the original receivership in the trial court, and not in the instant appeal. Again, we agree. A party must appeal an interlocutory order no more than 20 days after the order is signed. See TEX. R. APP. P. 26.1(b), 28.1. Because the reappointment order complained of is essentially nonexistent and cannot form the basis of an appeal, the only effective interlocutory order relating to the creation of the BEPA receivership is the January 20, 2004 order originally appointing Raymond. A timely appeal of that order is no longer possible, and Drs. Fite and Woods' appeal is untimely filed. Accordingly, we sustain Degioanni and Emtel's cross-issue.
Conclusion
Having held that the appeal is untimely filed, we cannot address Drs. Fite and Woods's points of error. We dismiss the appeal for want of jurisdiction.