Supersession of Turnover and Enforcement Orders by Subsequent Receivership Appointment

Introduction

This commentary examines the United States Court of Appeals for the Fifth Circuit’s per curiam decision in Weslease 2018 Operating, L.P. v. Behan (No. 24-10246, consolidated with Nos. 24-10366, 24-10822, 24-10898), filed June 5, 2025. The appeal arose from a district court’s “Turnover Order” compelling appellants Dale and Linda Behan to surrender their stock in River North Farms, Inc. to satisfy multi-million-dollar judgments, followed by four “Enforcement Orders” imposing restrictions, attorneys’ fees, and sanctions. The central issue on appeal was whether these orders remained subject to review after the district court appointed a receiver over all the Behans’ non-exempt property, thereby superseding the prior orders.

Parties:

Weslease 2018 Operating, L.P. (Plaintiff–Appellee, judgment creditor)
Dale and Linda Behan (Defendants–Appellants, judgment debtors and former shareholders of River North)
J. Shelby Sharpe (Counsel for the Behans, jointly sanctioned in one order)

Summary of the Judgment

The Fifth Circuit dismissed as moot the consolidated appeals of the Turnover Order and four Enforcement Orders. The court held that, after the appellants filed their appeals, the district court appointed a receiver with “exclusive custody, control, and possession” of all of the Behans’ non-exempt assets, including River North. That receivership order expressly “supersede[d] and/or amend[ed]” the earlier turnover and enforcement directives (except fee and sanction awards). Because the receiver now holds the property instead of Weslease, there is no longer a live controversy over the orders Wadelease sought to overturn. The only surviving issues concern attorneys’ fees and sanctions, which the Behans did not challenge substantively on appeal.

Analysis

Precedents Cited

Texas Civil Practice & Remedies Code § 31.002 – Authorizes judgment creditors to pursue turnover of non-exempt property owned by judgment debtors.
Federal Rule of Civil Procedure 69(a)(1) – Incorporates state turnover procedures to execute federal judgments.
Hewlett-Packard Co. v. Quanta Storage, Inc. (5th Cir. 2020) – Held turnover and enforcement orders under Texas law are final, appealable decisions under 28 U.S.C. § 1291.
Pool v. City of Houston (5th Cir. 2020 & 2021) – Recognized that intervening events rendering relief impossible moot federal appeals.
SEC v. Barton (5th Cir. 2024) – Dismissed an appeal as moot where a superseding receivership order became the operative judgment.
In re Ondova Ltd. Co. (5th Cir. 2015) – Held appeals moot when higher court orders effectively vacated the challenged orders.

Legal Reasoning

The court applied the constitutional requirement that federal courts adjudicate only live “cases” or “controversies.” An appeal becomes moot when subsequent events make it impossible for the appellate court to grant any effectual relief. Here:

Weslease obtained turnover of the Behans’ River North stock and four enforcement orders requiring compliance and monetary sanctions.
The Behans appealed those orders to this Court.
While the appeals were pending, the district court appointed a receiver over all the Behans’ non-exempt property—explicitly superseding the turnover and enforcement directives.
Because the receiver, not Weslease, now holds the assets, vacating or modifying the original orders would not restore the Behans’ possession or alter their legal relations with Weslease under those orders.

Accordingly, under Pool and Barton, the appeals were moot. Only the fees and sanctions awards remained in force, but those were not substantively challenged on appeal. The court therefore dismissed the appeals without reaching the merits of the Behans’ res judicata or statutory objections.

Impact

This decision confirms that:

Appellate jurisdiction under 28 U.S.C. § 1291 ends when a subsequent receivership order entirely supplants prior turnover and enforcement orders.
Creditors and debtors cannot maintain appeals of turnover/enforcement if a receiver’s appointment transfers control of the assets in question.
Fee and sanction awards under Tex. Civ. Prac. & Rem. Code § 31.002 remain enforceable unless separately and timely appealed.

Practitioners should anticipate that receivership motions filed after turnover relief may moot pending appeals.

Complex Concepts Simplified

Turnover Order: A court directive under Texas law compelling a judgment debtor to hand over non-exempt property to satisfy a judgment.
Enforcement Order: A follow-up order requiring obedience to the turnover order, often including access mandates and sanctions for noncompliance.
Receivership: A remedy appointing a neutral third party (receiver) to take custody of contested assets, manage or liquidate them, and distribute proceeds under court supervision.
Mootness: A doctrine grounded in Article III of the U.S. Constitution that requires a live controversy; an appeal is moot if no judicial relief can alter the parties’ rights.
Res Judicata: A claim-preclusion principle barring relitigation of issues or claims already finally adjudicated.

Conclusion

The Fifth Circuit’s decision in Weslease 2018 Operating, L.P. v. Behan underscores the doctrine of mootness in the context of turnover and enforcement appeals. By appointing a receiver with exclusive custody of the debtors’ assets, the district court effectively nullified the operative effect of its earlier orders. As a result, the appeals of those orders became moot, leaving only unchallenged awards of attorneys’ fees and sanctions in place. This precedent clarifies that appellate review of turnover relief cannot proceed once a superseding receivership order is in effect, and reinforces strategic considerations for both creditors and debtors in post-judgment collection and preservation of appellate rights.