Receivership Supersession of Turnover Orders and Mootness in Post-Judgment Proceedings

Introduction

In Weslease 2018 Operating, L.P. v. Behan, 24-10246 (5th Cir. June 5, 2025), the Fifth Circuit addressed whether appeals from Texas turnover and enforcement orders remained justiciable after the district court appointed a receiver over the judgment debtors’ assets. Weslease, the judgment creditor, had obtained a turnover order under Texas Civil Practice & Remedies Code § 31.002 requiring Linda and Dale Behan (“the Behans”) to transfer their stock in River North Farms, Inc., and to facilitate access to real property owned by that corporation. After the Behans appealed both the turnover order and subsequent enforcement orders, the district court—without any appeal by the Behans—appointed a receiver who “supersede[d] and/or amend[ed]” the prior orders. The Fifth Circuit, per curiam, dismissed the consolidated appeals as moot except as to remaining awards of attorneys’ fees and sanctions.

Summary of the Judgment

The Fifth Circuit’s unanimous per curiam opinion held that:

Once the district court appointed a receiver with “exclusive custody, control, and possession” of the Behans’ nonexempt property—explicitly superseding the prior turnover and enforcement orders—the appellants’ appeals were moot because no effective relief against Weslease remained.
The only aspects that survived were awards of attorneys’ fees and sanctions, which the district court did not disturb and which the Behans had not separately appealed. The Court declined to rule on those awards at this time, deferring any challenge to future proceedings or appeals arising from the receivership.

Analysis

Precedents Cited

Federal Rule of Civil Procedure 69(a)(1): Incorporation of state turnover law for judgment enforcement in federal court.
Tex. Civ. Prac. & Rem. Code § 31.002: Authorizes seizure of nonexempt judgment-debtor property and award of fees and sanctions.
Hewlett-Packard Co. v. Quanta Storage, Inc., 961 F.3d 731 (5th Cir. 2020): Recognized turnover and enforcement orders under Texas law as final and appealable under 28 U.S.C. § 1291.
DeOtte v. Nevada, 20 F.4th 1055 (5th Cir. 2021): Established that mootness is a threshold jurisdictional inquiry.
Pool v. City of Houston, 978 F.3d 307 (5th Cir. 2020): Confirmed that subsequent events eliminating the ability to grant meaningful relief render an appeal moot.
Env’t Conservation Org. v. City of Dallas, 529 F.3d 519 (5th Cir. 2008) and Knox v. SEIU, Local 1000, 567 U.S. 298 (2012): Articulated the general mootness principle that no “live” controversy exists if effective relief cannot be granted.
Securities & Exchange Comm’n v. Barton, 2024 WL 1087366 (5th Cir. Mar. 13, 2024): An appeal from a receivership-related order was moot where a new receivership order overtook the challenged ruling.
In re Ondova Ltd. Co., 619 F. App’x 362 (5th Cir. 2015): Dismissal of appeal when post-appeal orders effectively vacated the challenged order.
Flast v. Cohen, 392 U.S. 83 (1968): Supreme Court authority against issuing advisory opinions.

Legal Reasoning

The court’s reasoning proceeded in two steps:

Mootness Analysis
- Under Article III, federal courts may decide only live “cases” or “controversies.”
- The district court’s post-appeal appointment of a receiver expressly superseded the turnover and enforcement orders at issue, transferring all relevant assets—including River North stock and real property—into the receiver’s control.
- Because the Behans sought to reverse or modify those orders, but the orders no longer governed possession or control, the Court could not grant “any effectual relief.” Thus, the appeals were moot.
Disposition of Fees and Sanctions
- Section 31.002(c)–(e) authorizes awards of attorneys’ fees and sanctions in turnover proceedings.
- Although the underlying orders are moot, the awards remain effective and unchallenged in a separate appeal. The Court declined to entertain a collateral attack on those awards, deferring any remedy to future district court or appellate proceedings in the receivership context.

Impact

This decision of the Fifth Circuit clarifies several interrelated points in post-judgment Texas turnover practice:

Receivership vs. Turnover Orders: A receivership appointment can supersede prior turnover and enforcement orders, effectively mooting any appeals of those orders.
Mootness as Jurisdictional Bar: Even final, appealable turnover orders are vulnerable to mootness if intervening events eliminate the court’s ability to grant relief.
Fees and Sanctions Preservation: Awards of fees and sanctions under § 31.002 survive a receivership unless separately challenged, underscoring the importance of timely appellate strategy.
Strategic Considerations: Judgment creditors and debtors should anticipate that obtaining or securing a receivership may terminate ongoing appeals over turnover orders, shifting contested issues into the receivership.

Complex Concepts Simplified

Mootness: An appeal becomes moot when an intervening event or change in circumstances prevents the court from granting any meaningful relief.
Turnover Order: A judicial order requiring a judgment debtor to turn nonexempt assets over to a judgment creditor to satisfy a money judgment.
Receivership: A court-appointed fiduciary takes custody and control of a debtor’s assets to manage or liquidate them under court supervision.
Texas Civil Practice & Remedies Code § 31.002: State law permitting turnover of a debtor’s nonexempt property and allowing courts to award attorneys’ fees and sanctions to prevailing parties in turnover proceedings.

Conclusion

The Fifth Circuit’s decision in Weslease v. Behan underscores that post-judgment receivership orders may moot appeals of earlier turnover and enforcement orders by vesting control of the debtor’s assets in the receiver. While the court retained the district court’s awards of attorneys’ fees and sanctions for future challenge, it dismissed the substantive appeals as having no “live” controversy. This ruling reinforces the interplay between Texas turnover statutes, federal mootness doctrine, and the powerful effect of receiverships in post-judgment enforcement proceedings.