Receivership Supersession Doctrine: Superseding Turnover Orders and Mootness in Fifth Circuit

Introduction

In Weslease 2018 Operating, L.P. v. Behan, Nos. 24-10246 et al., the United States Court of Appeals for the Fifth Circuit reviewed a series of turnover and enforcement orders entered by the District Court for the Northern District of Texas. Weslease 2018 Operating (a judgment creditor) sought to satisfy two prior money judgments—totaling roughly $7 million—by seizing Texas‐law nonexempt property held by Linda and Dale Behan (the judgment debtors). After two failed turnover applications against real property owned by a third‐party corporation (River North Farms, Inc.), Weslease obtained a third turnover order commanding the Behans to surrender their stock interest in River North. Subsequent enforcement orders imposed injunctive relief, attorneys’ fees, and sanctions. On appeal, before the Fifth Circuit could decide the merits, the district court appointed a receiver who “superseded” all prior turnover and enforcement directives (except fee and sanction awards). The panel was thus confronted with the threshold question: can any meaningful relief still be granted?

Summary of the Judgment

The Fifth Circuit issued a per curiam opinion on June 5, 2025, and dismissed the consolidated appeals of the turnover order and four enforcement orders as moot. Because the later receivership order expressly “supersede[d] and/or amend[ed]” the earlier directives, the district court’s appointment of a receiver placed all previously targeted assets into the hands of the receiver. Thus, any appellate relief against Weslease would be ineffectual. The only survivors of this dismissal are the awards of attorneys’ fees and sanctions, which the district court intentionally left intact and which were neither challenged nor rendered moot by the receivership order.

Analysis

Precedents Cited

Federal Rule of Civil Procedure 69(a)(1) – authorizes federal courts to use state execution procedures (here, Texas turnover law) to enforce judgments.
Texas Civil Practice & Remedies Code § 31.002 – permits seizure of nonexempt property from a judgment debtor to satisfy a judgment, and authorizes awards of attorneys’ fees and sanctions.
Hewlett-Packard Co. v. Quanta Storage, Inc., 961 F.3d 731 (5th Cir. 2020) – held that turnover and enforcement orders under Texas law are final, appealable orders under 28 U.S.C. § 1291.
Pool v. City of Houston, 978 F.3d 307 (5th Cir. 2020) – reaffirmed that a case is moot when intervening events make it impossible to grant any effectual relief.
SEC v. Barton, No. 22-11242, 2024 WL 1087366 (5th Cir. Mar. 13, 2024) – dismissed an appeal from the ratification of a receivership‐settlement agreement as moot once a subsequent receivership order became the operative ruling.
In re Ondova Ltd. Co., 619 F. App’x 362 (5th Cir. 2015) – concluded that appeals are moot when post-judgment orders effectively vacate the underlying order.
DeOtte v. Nevada, 20 F.4th 1055 (5th Cir. 2021) – emphasized that mootness is a threshold jurisdictional inquiry.
Flast v. Cohen, 392 U.S. 83 (1968) – reinforced that courts cannot render advisory opinions on unappealed orders.

Legal Reasoning

The Fifth Circuit framed its decision around Article III justiciability and the doctrine of mootness. Once the district court appointed a receiver with exclusive custody over “all entities owned in whole or in part by the Behans,” it expressly superseded the prior turnover and enforcement orders. Under binding precedent, this intervening event extinguished any live controversy: the Behans could no longer obtain reversal of the turnover or enforcement orders, because all affected assets now belonged to the receiver rather than the original judgment creditor, Weslease. The panel thus concluded that without an available remedy against Weslease, the appeals were moot.

The court reserved jurisdiction over the undisturbed fee and sanction awards because the receivership order did not vacate those aspects of the earlier orders. It noted, however, that the district court retains the authority to revisit fees and sanctions in subsequent receivership proceedings, and that the Behans—or their counsel—may seek relief at that stage.

Impact

Creditor Strategy: Judgment creditors relying on state statutory turnover procedures must be aware that subsequent receivership proceedings can moot appeals from turnover or enforcement orders.
Receiver Authority: A receivership order that expressly supersedes prior orders can become the “operative” district‐court ruling, effectively consolidating asset control and cutting off appellate avenues directed at earlier orders.
Appellate Practice: Appellate courts will dismiss as moot any appeal rendered ineffectual by post‐appeal events, reinforcing that relief must be “effectual” to preserve justiciability.
Fee & Sanctions Proceedings: Awards under Texas Civ. Prac. & Rem. Code § 31.002 may survive a receivership‐based mootness dismissal, but remain subject to later district‐court review.

Complex Concepts Simplified

Mootness: If events after a lawsuit is filed—or after an appeal—is lodged eliminate the court’s ability to grant relief, the case is moot and must be dismissed.
Turnover Order: A statutory device under Texas law allowing a judgment creditor to seize nonexempt assets of a debtor to satisfy a money judgment.
Receivership: A court‐appointed fiduciary (the receiver) takes charge of specified assets or entities, operating them for the benefit of creditors and stakeholders.
Supersession Clause: A provision in a receivership order stating that it replaces or amends all prior orders with respect to asset control, thereby shifting legal and practical authority to the receiver.

Conclusion

Weslease 2018 Operating, L.P. v. Behan stands as a clear application of the mootness doctrine in the turnover and receivership context. By appointing a receiver and expressly superseding earlier turnover and enforcement orders, the district court removed any avenue for the Behans to obtain relief on appeal from those orders. The Fifth Circuit’s dismissal underscores that an appeal requires more than a procedural filing—it demands the possibility of meaningful relief. Only the unappealed awards of attorneys’ fees and sanctions remain intact, subject to potential modification in subsequent receivership proceedings. This decision thus cements the principle that post-appeal receivership orders can render earlier judgment‐enforcement appeals moot, reshaping the strategic landscape for creditors and debtors in federal courts.