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    Cathy GURLEY, et al. v. Matt KING, et al.
    Court of Appeals of Tennessee, at Nashville.
    Feb. 11, 2005 Session.
    Aug. 18, 2005.

      D’Lesli Davis, Nashville, Tennessee, for the appellants, Cathy Gurley and Gurley & Company, Inc.

      Katherine R. Cloud, William D. Martin, Nashville, Tennessee, for the appellees, Matt King and King of the Hill, Inc.
   OPINION

WILLIAM B. CAIN, J.,

delivered the opinion of the court,

in which WILLIAM C. KOCH, JR., P.J., M.S., and FRANK G. CLEMENT, JR., J, joined.

This is- a breach of contract action wherein the trial court granted summary judgment to Defendant on the grounds that the contract was too uncertain and indefinite to be enforced. The action of the trial court is reversed, and the case remanded for trial on its merits.

I. FACTUAL BACKGROUND

Defendant, Matt King (“King”), is a Nashville performing artist and songwriter. In House, Inc. (“In House”) is an artist management company with Gary Morris being the principal owner of stock in the corporation. On December 4, 1995, King entered into a management agreement with In House for a two-year period. This Agreement provided that In House would have options to renew the Agreement for two additional one-year periods. The Agreement further provided that King would pay to In House 15% of his gross monthly earnings during the contract term and 10% of all monies received from the exploitation of any product created by King during the term of the Agreement and received following the termination of the Agreement.

Plaintiff, Gurley & Company, Inc. is a corporation also engaged in the business of musical artist management. Plaintiff, Cathy Gurley (“Gurley”) is principal and stock holder of Gurley & Company. On October 14, 1997, In House contracted with Gurley to assist in the management of King, with Gurley to have day-to-day personal contact with King because King and Morris were having personality conflicts. The relationship between King and Morris continued to deteriorate, and King informed Gurley that if she could get him out of the In House Agreement, King and Gurley could then work together. In March of 1999,.King and Gurley agreed that, following the expiration of the In House Agreement, Gurley would act as exclusive manager for King for a period of three years and receive a 15% commission from his gross income. On March 20, 1999, Gurley and King signed a memorandum of their agreement (the “King/Gurley Contract”) providing:

This letter will serve to state that I will sign an exclusive management agreement with Cathy Gurley for a period of three years. This will begin either when my agreement with In House ends (December 1999) or earlier if Cathy is able to persuade In-House to relinquish their contract. Gary Morris had indicated to Cathy that this might be a possibility, since Gary has relinquished the management responsibilities to Cathy for the past year.
The details of the agreement will be worked out later but will basically follow the same arrangement currently in place with In House.

In House had exercised each of its two one-year options, and the King/In House Agreement was set to expire December 4, 1999. Gurley continued to act as day-today manager for King until December 1, 1999, when King, at a pre-arranged meeting, suggested that they “part ways.” On December 6, 1999, Gurley wrote to King:

As promised here is the letter, to reconfirm our conversation of December 1, 1999. I understand it is your intention to no longer utilize my services or Gur-ley & Co. as your representative for your music career. I will no longer attempt any negotiations regarding publishing and/or recording contracts or projects, etc.
Not withstanding your current wishes, you acknowledge that we have performed services for the past year for which we have received no compensation. Additionally, you have a signed agreement with us which runs until December 1, 2002. You have agreed that when other arrangements are made in regards to management, recording or publishing, etc., we will meet to assign an appropriate buy-out amount, both for past services and for those which would have been maintained in the future.

King did not respond to the December 6, 1999, letter, and on May 18, 2001, Gurley filed suit against King for damages and declaratory relief relative to breach of the alleged March 20, 1999, King/Gurley Contract, breach of the alleged oral agreement between the parties and recovery in quantum servuit for value of services rendered. King answered denying that any valid and enforceable contract existed between Gur-ley and King.

Following discovery, King moved for summary judgment as to the alleged King/Gurley Contract on the basis that the purported Contract, at best, constituted only “an agreement to agree” and was not enforceable because essential elements were never agreed to and the alleged arrangements between the parties were too indefinite and uncertain to be enforceable. The trial court first overruled this Motion for Summary Judgment, but, shortly before trial by jury was to begin and while considering certain motions in limine filed by King, reversed itself as to the issue of uncertainty and enforceability of the alleged Contract and dismissed the Complaint for breach of contract on such grounds. Gurley then voluntarily dismissed their claim for quantum servuit and timely appealed the breach of contract ruling.

The first issue on appeal by Gurley is decisive. This issue poses the question:

Did the trial court err in ruling that the King/Gurley agreement was too indefinite and uncertain to be enforceable, and therefore, in dismissing the Gurley parties’ breach of contract claim against the King parties?

II. STANDARD OF REVIEW

Since it is clear in this case that, in dismissing Gurley’s breach of contract claim sua sponte two days before the scheduled jury trial, the trial court simply revisited its previous denial of King’s Motion for Summary Judgment on this ground, we will review the action of the trial court under the familiar standards governing a grant of summary judgment. Byrd v. Hall, 847 S.W.2d 208 (Tenn.1993).

Applying summary judgment principles, the trial court erred in dismissing the Complaint on the basis that the King/Gur-ley Contract was too indefinite and uncertain to be enforceable. As the Court of Appeals of Massachusetts held in a similar context:

The question before us is not whether the parties to the letter of intent were, in a commercial sense, “merely hugging or engaged to be married,” Schwanbeck v. Federal-Mogul Corp., 31 Mass.App.Ct. 390, 394, 578 N.E.2d 789 (1991), S.C., [Schwanbeck v. Federal-Mogul Corp] 412 Mass. 703, 592 N.E.2d 1289 (1992), but rather if there is a genuine issue whether the letter incorporates in a binding manner all the essential terms of the contemplated transaction. The submissions under Mass.R.Civ.P. 56, 365 Mass. 824 (1974), viewed contextually, and with an indulgence in Hunneman’s favor, see Conley v. Massachusetts Bay Transp. Authy., 405 Mass. 168, 173, 539 N.E.2d 1024 (1989), demonstrate that such an issue exists.

Hunneman Real Estate Corp. v. Norwood Realty, Inc., 54 Mass.App.Ct. 416, 765 N.E.2d 800, 807 (2002).

III. LAW

A. Does a Contract Exist?

Destruction of contracts because of uncertainty has never been favored by the law, and with the passage of time, such disfavor has only intensified. This Court has held:

The Appellant argues in its brief that several important provisions were omitted from the letter of intent, including such matters as the store hours, the tax and insurance responsibility, and the contract duration. On the basis of such omissions, the Appellant would have us declare the letter of intent to be so indefinite as to be unenforceable.
“The determination that an agreement is sufficiently definite is favored. Therefore, the courts will, if possible so construe the agreement as to carry into effect the reasonable intention of the parties, if that can be ascertained. The law leans against the destruction of contracts for uncertainty, particularly where one of the parties has performed his part of the contract.” 17 Am.Jur.2d Contracts § 75 (1964).

APCO Amusement Co. v. Wilkins Family Rest. of Am., Inc., 673 S.W.2d 523, 528 (Tenn.Ct.App.1984); see also McClain v. Kimbrough Constr. Co., Inc., 806 S.W.2d 194, 198 (Tenn.Ct.App.1990).

As observed by the Supreme Court of Oregon:

[I]n suits for specific performance, as in other eases:
“The law does not favor, but leans against, the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements as to carry into effect the reasonable intentions of the parties if that can be ascertained.” (quoting 11 Williston on Contracts 813, § 1424 (3d ed.1968)).
Accord 5A Corbin on Contracts 279-83, § 1174 (1964):
“Courts should be ready to give those reasonable interpretations that ordinary businessmen are willing to give, seeking the aid of experts and giving heed to all the surrounding circumstances. * * * The fact that the parties omitted certain provisions that are commonly included may indicate an intention to be bound without them and the gaps may be provided for in the decree.
“ * * * Apparent difficulties of enforcement that arise out of uncertainties in expression often disappear in the light of courageous common sense and reasonable implications of fact.”
See also Restatement of Contracts § 370 (1932).
Essentially, then, the resulting standard becomes one of substantial fairness to both parties. Neither party to a contract should be required to perform additional, material terms to which he did not either explicitly or implicitly agree. On the other hand, however, neither party should be allowed to avoid his contractual duties merely because the language which was utilized to express the agreement is less specific and complete than that which a careful lawyer would ordinarily employ.

Van v. Fox, 278 Or. 439, 564 P.2d 695, 699 (1977).

In addressing an assertion by the defendant that an alleged agreement was not sufficiently certain to constitute an enforceable contract, the Court of Appeals of Ohio held:

The modern view of contractual certainty is well expressed in Restatement of the Law 2d, Contracts (1981) 92, Section 33:
“ § 33. Certainty
“(1) Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain.
“(2) The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.
“(3) The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance.”
See, also, Corbin, Contracts (1963), Section 95.
Comment a to Section 33 of the Restatement adds:
“ * * * [T]he actions of the parties may show conclusively that they have intended to conclude a binding agreement, even though one or more terms are missing or are left to be agreed upon. In such cases courts endeavor, if possible, to attach a sufficiently definite meaning to the bargain.
“An offer which appears to be indefinite may be given precision by usage or trade or by course of dealing between the parties. Terms may be supplied by factual implication, and in recurring situations the law often supplies a term in the absence of agreement to the contrary. * * * Where the parties have intended to conclude a bargain, uncertainty as to incidental or collateral matters is seldom fatal to the existence of the contract.”

Comment/to Section 33 notes at page 95:

“The more important the uncertainty, the stronger the indication is that the parties do not intend to be bound; minor items are more likely to be left to the option of one of the parties or to what is customary or reasonable.”
The legislature has adopted similar principles for sales of personalty, in the Uniform Commercial Code. R.C. 1302.07. That legislatively demonstrated public policy should apply equally here.

Mr. Mark Corp. v. Rush, Inc., 11 Ohio App.3d 167, 464 N.E.2d 586, 589-90 (1983).

In reversing a trial court’s grant of summary judgment because of uncertainty in the binding character of a letter of intent executed by the parties, the Court of Appeals of Texas discussed at length the governing principles of law.

To be enforceable, the parties must have agreed on essential terms. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex.1992). However, parties may agree on some of the contractual terms, understanding them to be an agreement, and leave other contract terms to be made later. Id. It is only when an essential term is left open for future negotiation that there is nothing more than an unenforceable agreement to agree. Oakrock Exploration Co. v. Killam, 87 S.W.3d 685, 690 (Tex.App.-San Antonio 2002, pet. denied) (citing T.O.Stanley Boot Co., 847 S.W.2d at 221). A party cannot accept an offer to form a contract unless its terms are reasonably certain. Id. (citing Texas Oil Co. v. Tenneco, Inc., 917 S.W.2d 826, 830 (Tex.App.-Houston [14th Dist.] 1994), rev’d on other grounds sub nom., Morgan Stanley & Co., Inc. v. Texas Oil Co., 958 S.W.2d 178 (Tex.1997)). Texas courts favor validating transactions rather than voiding them, but courts may not create a contract where none exists and they generally may not add, alter, or eliminate essential terms. Id. In construing an agreement, the courts may consider evidence of circumstances surrounding its execution. America’s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 622 (Tex.App.-San Anotonio 1996, writ denied) (citing Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex.1981)).
Under some circumstances, a binding contract may be formed if the parties agree on the material terms, even though they leave open other provisions for later negotiation. John Wood Group USA Inc. v. ICO, Inc., 26 S.W.3d 12, 19 (Tex.App.-Houston [1st Dist.] 2000, pet. denied) (citing Scott v. Ingle Bros. Pac., Inc., 489 S.W.2d 554, 555 (Tex.1972)). Similarly, a letter of intent may be binding even though it refers to the drafting of a future, more formal agreement. Id. (citing Foreca, S.A. v. GRD Dev. Co., Inc., 758 S.W.2d 744, 746 (Tex.1988)). As letters of intent may be binding, authorities are quick to warn parties of the risks involved with their use. Id. A party not wishing to be prematurely bound by a letter agreement is advised to include a provision clearly stating that the letter is nonbinding, as such negations of liability have been held to be effective. Id. (quoting E. Allan Farns-WORTH, FARNSWORTH ON CONTRACTS § 3.8b, at 193 (1990)). No such provision was included here.

Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759, 766-67 (Tex.App.2004).

In Hunneman Real Estate v. Norwood Realty, Inc., 54 Mass.App.Ct. 416, 765 N.E.2d 800 (2002), the trial court had granted summary judgment to the defendant, and the court of appeals posed the controlling question:

The central issue is whether the letter of intent presented a genuine issue as to whether it bound the signatories to perform their recited obligations or whether it was, as determined by the judge, “merely an agreement to agree” and, therefore, not enforceable as matter of law. See Rosenfield v. United States Trust Co., 290 Mass. 210, 217, 195 N.E. 323 (1935) (“An agreement to reach an agreement is a contradiction in terms and imposes no obligation on the parties thereto”).

Hunneman Real Estate, 765 N.E.2d at 803. In reversing the grant of summary judgment as to the contract question, the Court of Appeals of Massachusetts reasoned:

The most recent pronouncements in our cases on the subject of the enforceability of precontractual agreements place great reliance on the intention of the parties. McCarthy v. Tobin, 429 Mass. 84, 87, 706 N.E.2d 629 (1999) (“The controlling fact is the intention of the parties”). See Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 878, 724 N.E.2d 699 (2000), citing David J. Tierney, Jr., Inc. v. T. Wellington Carpets, Inc., 8 Mass.App.Ct. 237, 241, 392 N.E.2d 1066 (1979), for the proposition that a “party to [a] contract may be found to have entered [a] binding agreement if [that] party intended to be presently bound.” Here, the intent of the parties to be bound by the letter of intent is not left to inference from the terms of their agreement but is twice expressly stated in prominent parts of the letter of intent. Where intention is clearly stated or evident, the analytical focus generally turns to whether the inchoate or unresolved aspects of the parties’ agreement are “essential” or “material.” “It is axiomatic that to create an enforceable contract, there must be agreement between the parties on the material terms of that contract, and the parties must have a present intention to be bound by that agreement.... It is not required that all terms of the agreement be precisely specified, and the presence of undefined or unspecified terms will not necessarily preclude the formation of a binding contract.” Situation Mgmt. Sys. Inc. v. Malouf, Inc., supra at 878, 724 N.E.2d 699. (Citations omitted.)
Provision for the execution of a more formal document such as a purchase and sale agreement is not conclusive. Compare Coan v. Holbrook, 327 Mass. 221, 224, 97 N.E.2d 649 (1951), quoting from Restatement of Contracts § 26 (1932) (“Mutual manifestations of assent that are in themselves sufficient to make a contract will not be prevented from so operating by the mere fact that the parties also manifest an intention to prepare and adopt a written memorial thereof ... ”) with Rosenfield v. United States Trust Co., 290 Mass. 210, 216, 195 N.E. 323 (1935) (“Normally the fact that parties contemplate the execution of a final written agreement justifies a strong inference that the parties do not intend to be bound by earlier negotiations or agreements until the final terms are settled”). That the letter of intent looked to the parties’ respective attorneys to prepare a purchase and sale agreement containing “such additional terms as are normal” to an asset purchase and which could be signed as late as the closing of the transaction, smacks more of formality and legal boilerplate than a call for further negotiation of material terms. “Notwithstanding the importance of protecting negotiating parties from involuntary judicially imposed contract, it is equally important that courts enforce and preserve agreements that were intended as binding, despite a need for further documentation or further negotiation. It is, of course, the aim of contract law to gratify, not to defeat, expectations that arise out of intended contractual agreement, despite informality or the need for further proceedings between the parties.” Lafayette Place Assocs. v. Boston Redev. Authy., 427 Mass. 509, 518 n. 9, 694 N.E.2d 820 (1998), quoting from Teachers Ins. and Annuity Assn. v. Tribune Co., 670 F.Supp. 491, 497-498 (S.D.N.Y.1987) (Leval, J.).

Id., at 804-06; see also Arnold Palmer Golf Co. v. Fuqua Indus., Inc., 541 F.2d 584 (6th Cir.1976).

The court further observes in footnote that “ ‘The subsequent conduct and interpretation of the parties themselves may be decisive of the question as to whether a contract has been made, even though a document was contemplated and has never been executed.’ 1 Corbin § 2.9, at 154.” Hunneman Real Estate, 765 N.E.2d at 806 n. 11.

Three Tennessee cases are expositive of the general questions controlling this case. The first of these is Engenius Entertainment, Inc. v. Herenton, 971 S.W.2d 12 (Tenn.Ct.App.1997). In that case, a developer sued the city of Memphis, Shelby County and their respective mayors for, among others things, breach of contract. In determining that the bi’each of contract count of the complaint failed to state a cause of action, this Court reasoned:

In asserting its breach of contract claims, EnGenius relies on the existence of at least three documents to establish the existence of a contract: the RFP issued by the Defendants; EnGenius’s response to the RFP; and letters from the Defendants informing EnGenius that it had been selected as the successful developer. The allegations of EnGeni-us’s complaint and these documents, however, make clear that the parties also contemplated the subsequent execution of a formal contract memorializing the parties’ agreement. The Restatement (Second) of Contracts addresses the question of whether a contract exists at this stage in the parties’ negotiations:
§ 27. Existence of Contract Where Written Memorial is Contemplated
Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show that the agreements are preliminary negotiations.
Comment:
a. Parties who plan to make a final written instrument as the expression of their contract necessarily discuss the proposed terms of the contract before they enter into it and often, before the final writing is made, agree upon all the terms which they plan to incorporate therein. This they may do orally or by exchange of several writings. It is possible thus to make a contract the terms of which include an obligation to execute subsequently a final writing which shall contain certain provisions. If parties have definitely agreed that they will do so, and that the final writing shall contain these provisions and no others, they have then concluded the contract,
b. On the other hand, if either party knows or has reason to know that the other party regards the agreement as incomplete and intends that no obligation shall exist until other terms are assented to or until the whole has been reduced ■ to another written form, the preliminary negotiations and agreements do not constitute a contract.
Restatement (Second) of Contracts § 27 (1979).
As explained by another authority, It is quite possible for parties to make an enforceable contract binding them to prepare and execute a subsequent final agreement. In order that such may be the effect, it is necessary that agreement shall have been expressed on all essential terms that are to be incorporated in the document. That document is understood to be a mere memorial of the agreement already reached. If the document or contract that the parties agree to make is to contain any material term that is not already agreed on, no contract has yet been made; the so-called “contract to make a contract” is not a contract at all.
1 Arthur L. Corbin et al., Corbin on Contracts § 2.8, at 133-34 (Rev. ed.1993) (footnotes omitted).
In accordance with the foregoing authorities, we hold that EnGenius’s complaint fails to state a cause of action for breach of contract. When viewed in their entirety, the documents upon which EnGenius relies to establish the existence of a contract, as well as the allegations of EnGenius’s complaint, make clear (1) that the parties intended to enter into a written contract memorializing their agreement, but (2) that the parties had not yet reached agreement on certain essential terms of the agreement. Specifically, the RFP issued by the Defendants indicated that two essential terms of the lease agreement would be negotiated after the Defendants selected a developer. Although the RFP required the developer to propose a minimum rent and percentage of gross revenues to be paid the Defendants, the RFP also provided that the specific rent structure would be negotiated between the parties upon selection of a developer. The RFP further provided that the term of the lease would be negotiable, although the term could not exceed 20 years. In the absence of agreement as to these two terms, we conclude that, as a matter of law, no agreement existed between the parties regarding EnGeni-us’s development and lease of The Pyramid space. See Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69, 74 (2d Cir.1989) (holding that no binding contract existed where documents relied upon referred to possibility that negotiations might fail and to completion of binding sales agreement at some future date); Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 432-38 (7th Cir.1993) (affirming trial court’s dismissal of breach of contract claim where parties’ preliminary agreement specified that any final agreement was subject to preparation and execution of mutually satisfactory purchase agreement); Viking Broad. Corp. v. Snell Publ’g Co., 243 Neb. 92, 497 N.W.2d 383, 386 (1993) (affirming summary judgment in favor of defendant where “letter of intent was so cursory, indefinite, and conditional as to fail as a matter of law to establish an objective intent on the part of the parties to be bound thereby”). At most, the documents evinced an agreement between the parties to negotiate in good faith to reach a final lease agreement. See Arcadian Phosphates, 884 F.2d at 74; Venture Assocs. Corp., 987 F.2d at 433; see also Arnold Palmer Golf Co. v. Fuqua Indus., 541 F.2d 584, 588-89 (6th Cir.1976); United Magazine Co. v. Prudential Ins. Co., 877 F.Supp. 1076, 1083 (S.D.Ohio 1995).

Engenius Entm’t, 971 S.W.2d at 17-18.

The second case from Tennessee is Davidson v. Holtzman, 47 S.W.3d 445 (Tenn.Ct.App.2000). In this case, Defendant appealed a jury verdict asserting that the two alleged oral contracts were too indefinite to be enforced. The defendant relied primarily on Jamestowne on Signal, Inc. v. First Federal Savings and Loan Association, 807 S.W.2d 559 (Tenn.Ct.App.1990), wherein this Court held that the parties’ dealings were too indefinite to create an enforceable contract because essential elements of a contract were unsettled. In affirming the jury verdict in favor of Davidson, this Court held:

We find that there is material evidence to support a finding of an oral contract by which Holtzman promised to pay Davidson five percent of the difference between the purchase price and the sales price of the Chattanooga franchise. Setting aside for the moment the issue of Feder’s testimony — which we will address separately — the only evidence presented at trial regarding the parties’ agreement was the testimony of the parties and their correspondence after the agreement was allegedly made. Because the parties’ testimony was sharply conflicting, the jury was required to assess the credibility of the witnesses. It is apparent from the verdict that the jury was not impressed with Holtzman’s version of the parties’ dealings or his explanation that his responses to Davidson’s correspondence were in regard to compensation owed for consultation. We are not in a position to assess witness credibility. See Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822, 823 (Tenn.1994).
The correspondence between the parties also supported the jury’s finding of an oral contract. In his responses to Davidson’s repeated requests for payment, Holtzman acknowledges that Davidson is owed some compensation; he refers to “the issue of the ‘benefits’ “ and states that he has “always tried to ‘do the right thing’ regarding financial issues.” Although Holtzman introduced three memoranda at trial in which he denies the existence of any agreement, the jury was free to disregard them.

Davidson, 47 S.W.3d at 454.

The third case from Tennessee is the opinion of this Court in Kandel v. Center for Urological Treatment and Research, P.C., No. M2000-02128-COA-R3-CV, 2002 WL 598567 (Tenn.Ct.App. April 17, 2002). This case contains an enlightening discussion of developments in the law following the landmark decision of a New York Federal District Court in Teachers Insurance and Annuity Association of America v. Tribune Co., 670 F.Supp. 491 (S.D.N.Y.1987). This historic New York decision delineated two types of preliminary agreements, the first type being where parties agree to later formalize a contract about which there has been complete agreement on all of the essential issues. The second type involves a situation where parties have committed themselves to some of the major terms, but other essential elements remain to be negotiated. As explained by the New York District Court:

Preliminary contracts with binding force can be of at least two distinct types. One occurs when the parties have reached complete agreement (including the agreement to be bound) on all issues perceived to require negotiation. Such an agreement is preliminary only in form — only in the sense that the parties desire a more elaborate formalization of the agreement. The second stage is not necessary; it is merely considered desirable. As the Court of Appeals stated with respect to such preliminary agreements in V’Soske v. Barwick, 404 F.2d 495, 499 (2d Cir.), cert denied, 394 U.S. 921, 89 S.Ct. 1197, 22 L.Ed.2d 454 (1969), “the mere fact that the parties contemplate memorializing their agreement in a formal document does not prevent their informal agreement from taking effect prior to that event.... Restatement (Second) of Contracts, § 26 (then Tert. Draft No. 1, 1964); 1 Corbin on Contracts § 30 (1950); 1 Williston on Contracts § 28 (3d ed.1957).”
The second and different sort of preliminary and binding agreement is one that expresses mutual commitment to a contract on agreed major terms, while recognizing the existence of open terms that remain to be negotiated. Although the existence of open terms generally suggests that binding agreement has not been reached, that is not necessarily so. For the parties can bind themselves to a concededly incomplete agreement in the sense that they accept a mutual commitment to negotiate together in good faith in an effort to reach final agreement within the scope that has been settled in the preliminary agreement. To differentiate this sort of preliminary agreement from the first, it might be referred to as a binding preliminary commitment. Its binding obligations are of a different order than those which arise out of the first type discussed above. The first type binds both sides to their ultimate contractual objective in recognition that that contract has been reached, despite the anticipation of further formalities. The second type — the binding preliminary commitment — does not commit the parties to their ultimate contractual objective but rather to the obligation to negotiate the open issues in good faith in an attempt to reach the alternate objective within the agreed framework. In the first type, a party may lawfully demand performance of the transaction even if no further steps have been taken following the making of the “preliminary” agreement. In the second type, he may not. What he may demand, however, is that his counter-party negotiate the open terms in good faith toward a final contract incorporating the agreed terms. This obligation does not guarantee that the final contract will be concluded if both parties comport with their obligation, as good faith differences in the negotiation of the open issues may prevent a reaching of final contract.

Teachers Ins. and Annuity Ass’n v. Tribune Co., 670 F.Supp. 491, 498 (S.D.N.Y.1987).

After characterizing the Kandel preliminary agreement to be of the second type, the Court pretermits any further discussion of the first type and declines to commit Tennessee as to the second type with the observation that:

In this case, we need not determine whether such a preliminary agreement would be enforceable under Tennessee law. Even if Tennessee courts would recognize a cause of action based on such a provision, our review of the record indicates that no reasonable trier of fact could find that the defendants breached their duty under the circumstances.

Kandel, 2002 WL 598567, at *6.

In the case at bar, we are dealing with the first type under Teachers Ins. and Annuity Ass’n since it is alleged that all material provisions of the Gurley/King Contract had been agreed to and the parties intended to formalize that agreement by a later writing. No “good faith” negotiation of essential elements of contract is involved.

B. Partial Performance

Finally, a factual issue exists as to part performance by Gurley. “Part performance under an agreement may remove uncertainty and establish that a contract enforceable as a bargain has been formed.” Restatement (Second) of Contracts § 84(2) (1979); see Scott v. Ingle Bros. Pac., Inc., 489 S.W.2d 554 (Tex.1972); see Somont Oil Co., Inc. v. Nutter, 228 Mont. 467, 748 P.2d 1016 (1987).

In reversing a case in which the trial court had granted summary judgment because of uncertainty, the United States District Court of New Jersey held:

The law generally and in New Jersey does not favor voiding a contract for vagueness. See E. Allen Farnsworth, Contracts § 3.27 at 208-09 (2d ed.1990); Paley v. Barton Sav. & Loan Ass’n, 82 N.J.Super. 75, 83, 196 A.2d 682 (App.Div.), certif. denied, 41 N.J. 602, 198 A.2d 446 (1964). The courts will not scruple at filling gaps or interpreting ambiguous terms where there is evidence of a manifestation of assent to enter into a bargain. See Paley, 82 N.J.Super. at 83, 196 A.2d 682; Heim v. Shore, 56 N.J.Super. 62, 73, 151 A.2d 556 (App.Div.1959); 4 Samuel Williston, Williston on Contracts, § 4:18 at 421-22 (4th ed.1990). Thus, a promise to provide “the usual sponsorship fees” for a bowling team was sufficient. Leitner v. Braen, 51 N.J.Super. 31, 39-40, 143 A.2d 256 (App.Div.1958). Likewise, an agreement by a savings and loan association to hold $100,000 available to buy mortgages that a real estate developer hoped to obtain from the future buyers of un-built houses was sufficiently definite. Paley, 82 N.J.Super. at 82-84, 196 A.2d 682.
A contract may be sufficiently certain even though one party has discretion to choose between material terms. Kleckner v. Mutual Life Ins. Co., 822 F.2d 1316, 1319 (3d Cir.1987). Partial performance by one side of the bargain may, by the specifics of that performance, cure an indefinite term of the agreement. Merrick v. United States, 846 F.2d 725, 726 (Fed.Cir.1988); Restatement (Second) of Contracts, § 34(2) (1979); Joseph M. Perillo, Corbin on Contracts, § 4.7 at 606-08 & n. 2 (rev. ed.1993). Likewise, even if uncertainty remains, where one party has acted in reliance on an indefinite agreement the courts will act to protect that reliance whether through a contractual or non-contractual remedy. Restatement, supra § 34(3); see also Heim, 56 N.J.Super. at 73, 151 A.2d 556.

Lo Bosco v. Kure Eng’g Ltd., 891 F.Supp. 1020, 1026 (D.N.J.1995); see also Hanna v. Glover, No. CA 03-939, 2004 WL 848329 (Ark.Ct.App.2004).

It is not disputed in this record that Gurley performed services for King during the management period. The dispute arises as to whether or not Gurley’s performance was as an employee of In House under the In House Agreement with King or as manager for King under the alleged Gurley/King Contract of March 20, 1999. On this question, the evidence is conflicting, particularly as it relates to the testimony of Gurley and King. This factual determination involving- the credibility of witnesses is for the trier of fact.

IV. ANALYSIS

With this insight into what we consider to be the controlling law, we now turn to the merits of the appeal. We are not concerned at this point with whether or not a contract, in fact, exists between the parties, but rather with whether or not reasonable minds could differ on that question. If reasonable minds could so differ, summary judgment must be reversed and the case remanded for trial on its merits under principles laid down in APCO Amusement.

It is undisputed that the seven-page written management contract between King and In House expired by its terms on December 4, 1999. On March 20, 1999, Gurley and King signed a document providing:

This letter will serve to state that I will sign an exclusive management agreement with Cathy Gurley for a period of three years. This will begin either when my agreement with In House ends (December 1999) or earlier if Cathy is able to persuade In-House to relinquish their contract. Gary Morris had indicated to Cathy that this might be a possibility, since Gary has relinquished the management responsibilities to Cathy for the past year.
The details of the agreement will be worked out later, but will basically follow the same arrangement currently in place with In House.

In dismissing the breach of contract action, the trial court held that the March 20, 1999, letter was too indefinite and uncertain and that there was an absence of essential terms to form a management contract. In order to uphold this ruling of the trial court, it must appear as a matter of law that “the details of the agreement” to be worked out later were “essential terms” rather than details not essential to the formation of a contract. Clearly, the language used by the parties in the March 20, 1999, document does not establish, as a matter law, that such “details” involved “essential elements” of a contract. See Engenius Entertainment, 971 S.W.2d 12. Material factual questions remain which must be considered by the trier of fact under settled principles of law.

“Broadly speaking, preliminary negotiations as to terms of an agreement do not constitute a contract, although this does not preclude the formation of a binding contract during the negotiations.” 17 Am.Jur.2d Contracts § 25 (1964). In this regard, “[i]t is well settled that a binding contract may be entered into through the medium of correspondence by letter or telegraph.” Neilson & Kittle Canning Co. v. F.G.Lowe & Co., 149 Tenn. 561, 564, 260 S.W. 142 (1924). Therefore, merely because the document signed by the parties was expressly designated to be a “letter of intent” does not preclude it from constituting a valid contract.
In determining whether or not the letter should be construed as a binding contract, we must keep in mind that
“[t]he primary test as to the actual character of a contract is the intention of the parties, to be gathered from the whole scope and effect of the language used, and mere verbal formulas, if inconsistent with the real intention, are to be disregarded. It does not matter by what name the parties chose to designate it. But the existence of a contract, the meeting of the minds, the intention to assume an obligation, and the understanding are to be determined in case of doubt not alone from the words used, but also the situation, acts, and the conduct of the parties, and the attendant circumstances.”
17 Am.Jur.2d Contracts § 1 (1964).
This same approach, examining the conduct of the parties, was adopted by this court in the case of Bailey v. Brister, 49 Tenn.App. 191, 353 S.W.2d 564 (1961). In determining whether certain correspondence, in the form of letters sent between the parties, constituted a contract or was merely a part of the negotiations leading to a potential contract, we stated that “[t]he practical interpretation of a contract by the parties thereto is entitled to great, if not controlling influence, and will be adopted by the courts.” Id. at 568. The court explained this rule of interpretation, quoting from Williston on Contracts, § 623, as follows: “ ‘ “The interpretation given by the parties themselves to the contract as shown by their acts will be adopted by the court, and to this end not only acts but the declarations of the parties may be considered.” ’ ” Bailey, 353 S.W.2d at 568. In the present case, reviewing the conduct of the parties, we believe the parties acted upon the letter in such a way as to suggest that they believed a binding agreement had been reached.

APCO Amusement, 673 S.W.2d at 527.

In reaching the conclusion that a genuine issue of material fact exists, we review the actions taken in the trial court, which are, procedurally, somewhat unique. On May 19, 2003, King filed his Motion for Summary Judgment asserting that the King/Gurley agreement was unenforceable as a matter of law. On June 23, 2003, Gurley filed their opposition to Defendants Motion for Summary Judgment together with an Additional Statement of Undisputed Material Facts. On June 25, 2003, King responded to the Additional Statement of Undisputed Material Facts, which response, in relevant part, provided:

32. In March of 1999, Gurley and King agreed that Gurley would attempt to get King out of the In House Agreement. Gurley Aff.
RESPONSE:
Admit.
33. They also agreed that following the In House Agreement, Gurley would act as exclusive manager of King for three years and that she would receive a 15% commission on his gross income. At the time that Gurley and King orally made that agreement, Gurley believed that she would act as King’s manager following the In House agreement.
RESPONSE:
Admit
34. The Gurley-King management agreement would begin either when Gurley got King out of the In House agreement or when it expired. Gurley Aff.
RESPONSE:
Admit
35. Deposition Exhibit 4 is a true and correct copy of a memorandum signed by King on March 20, 1999 (“the March 20, 1999 document”). King Dep. 43.24-44.9.
RESPONSE:
Admit
36. The March 20, 1999 document states:
“This letter will serve to state that I will sign a exclusive management agreement with Cathy Gurley for a period of three years. This will begin either when my agreement with In House ends (December 1999) or earlier if Cathy is able to persuade In House to relinquish their contract. Gary Morris had indicated to Cathy that this might be a possibility, since Gary has relinquished the management responsibilities to Cathy for the past year.
The details of the agreement will be worked out later but will basically follow the same arrangement currently in place with In House.”
Kind Deposition Exhibit 4.
RESPONSE:
Admit.
37. The March 20, 1999 memorandum also reflected at least partially the oral agreement Gurley and King made. Gurley Aff. King Dep. Ex. 4.
RESPONSE:
Admit.
38. As of March 20, 1999, King had asked Gurley to get him out of the King/In House Agreement, and there had not at the time been any confirmation that he could or would not get out of the King/In House Agreement. King Dep. 47.6-48.22.
RESPONSE:
Admit.
39. King signed the March 20, 1999 document, “in hopes that I could get out of my contract.” King Dep. 47.6-48.22
RESPONSE:
Admit.
40. King “really” wanted to be out of “his contract with Gary” and was interested in a Nascar sponsorship. King Dep. 51.25-52.17.
RESPONSE:
Admit.
41. In fact, King understood that after signing the March 20, 1999 document, his obligation was to sign an exclusive management agreement with Gurley. King Dep. 54.3-54.7.
RESPONSE:
Admit.
42. King acknowledges that — whatever else the March 20, 1999 memorandum may represent — on March 20, 1999, he agreed to sign a management agreement with Cathy Gurley for a three-year term. King Dep. 44.13—14.25.
RESPONSE:
Admit.
43. The March 20, 1999 document, notes that “the details of the agreement” would be worked out later “but will basically follow the same arrangement currently in place with In House.” King Dep. 47.23-48.4.
RESPONSE:
Admit.
44. While Gurley and King agreed that a more detailed written agreement would follow, King agreed to the essential terms of: a three-year term, exclusivity and price (15%) in March, 1999. Gurley Aff.
RESPONSE:
Admit.

Following these submissions, the trial court on July 14, 2003, entered an Order providing in pertinent part:

The summary judgment record contains testimony by Mr. King concerning his understanding of the effect of the March 20, 1999 memo. This testimony raises genuine issues of material fact as to whether the memo was simply preliminary negotiations and, therefore, unenforceable, or whether it documented an enforceable meeting of the parties’ minds that King had an exclusive contract for Gurley to manage King upon the expiration of the King/In House Agreement and on the same terms as the King/In House Agreement_Ad-ditionally, if at trial the Court finds that the March 20, 1999 memo constituted a contract with Gurley on the same terms as the King/In House Agreement, the memo does not violate the statute of frauds. Use of the same terms as the King/In House Agreement renders the memo subject to performance within a year because the contract terminates upon death.

The trial court then overruled Defendant’s Motion for Summary Judgment.

With the case set for trial before a jury on August 18, 2003, King, on August 12, 2003, filed two motions in limine seeking to exclude Gurley’s evidence and to rely upon the statute of frauds to bar the contract action. On August 14, 2003, Gurley filed her responses to these motions in limine.

At pretrial conference on August 15, 2003, the motions in limine were argued before the court, and, on August 15, 2003, the trial court entered an order providing:

This matter came before the Court on a pretrial conference, two business days before the jury trial of this case. During the conference, in conjunction with arguments on motions in limine, the defendant asserted various dispositive defenses which he argued were established of record as a matter of law. Although the defendant had previously filed and argued a motion for summary judgment and that motion was denied, the defendant presented the Court with new authorities and characterizations of legal arguments contending they were dispos-itive of the plaintiffs claims.
The deadline for dispositive motions having already passed and the Court having denied the defendant’s motion for summary judgment, the Court was reluctant to consider the legal defenses raised by the defendant. However, if the defenses are dispositive of the case as a matter of law, it is the duty of the Court, as gatekeeper of jury trials, to rule on those defenses and, despite the eleventh hour, dismiss the case if the Court concludes that dismissal is required by law.
Having reviewed the entire file, including consideration again of the motion for summary judgment and having read in their entirety the depositions of the parties, the Court concludes that the plaintiffs claims for breach of oral agreement and a written contract shall be dismissed as a matter of law....
With respect to the plaintiffs claim of recovery on an alleged written contract, the Court had previously ruled that there were genuine issues of material fact, for a jury to determine, whether there was a meeting of minds and a contract formed by the memorandum signed by the parties of March 20, 1999.
In considering at the pretrial conference the motions in limine and the proposed jury form and proposed instructions, the Court has concluded that the March 20, 1999 letter as a matter of law does not constitute a management contract. The letter is too indefinite and uncertain. The Court concludes that the letter, even if there were a meeting of the minds as to its contents, is an agreement to later define specific terms and enter into a management agreement, i.e. an agreement to attempt to agree. In this regard, in opposition to the motion for summary judgment, the plaintiff cited deposition testimony of the defendant as creating a genuine issue of material fact on whether there was a meeting of the minds with respect to the March 20, 1999 letter. The Court ruled that there was such a genuine issue of material fact. But what has become abundantly clear in preparing this case to present it to a jury is the absence of essential terms to form a management contract.
Specifically the March 20, 1999 letter, in addition to stating that the defendant will sign an exclusive management agreement with Cathy Gurley for a period of three years, also states, “The details of the agreement will be worked out later but will basically follow the same arrangement currently in place with In-House.” What makes this unenforceable is it is impossible to know which terms of the In-House agreement the parties would have agreed to or, if modified, how they would have been modified. The In-House agreement is 7 pages in length. It details the management to be performed, options for renewal, defines gross earnings, power of attorney, etc.
In sum, the Court concludes that while there may be genuine issues of material fact on whether the parties agreed to later attempt to enter into a management agreement, that theory does not state a legal claim. The letter is not a management contract; it is incapable of enforcement or recovery because there is the absence of essential terms concerning management. The Court, therefore, dismisses the plaintiffs claims for breach of a written contract.

In this same Order, the trial court holds that the alleged oral contract is barred by the statute of frauds. Thus, we have the trial court, following a hearing on motions in limine, sua sponte revisiting its previous action of July 14, 2003, overruling Defendant’s Motion for Summary Judgment, reversing itself and sustaining the Motion.

The July 14, 2003, Order Overruling the Motion for Summary Judgment was clearly correct, and the sua sponte Order of August 15, 2003, sustaining the Motion for Summary Judgment is in error. The June 25, 2003, admissions by Defendant of the Additional Statement of Undisputed Material Facts for the purpose of summary judgment conclusively establish the existence of genuine questions of material fact precluding summary judgment. The trier of fact, not the trier of law, must determine these material questions of fact, including the significance of the details remaining to be formalized in writing after the March 20, 1999, letter signed by both parties.

While a purely oral contract standing alone would be barred by the statute of frauds, Tennessee Code Annotated section 29-2-101; see Dickens v. Tennessee Electric Power Co., 175 Tenn. 654, 137 S.W.2d 273 (1940), it is equally clear that the March 20, 1999, letter, coupled with evidence of the surrounding circumstances as in APCO Amusement, would render the statute of frauds inapplicable. The March 20, 1999, letter provides a three-year term, and the referenced seven-page King/In House Agreement is terminable on death of a party.

There are many questions which cannot be answered by the summary judgment record, including the economic value of any recovery which might be obtained by Gur-ley, but such questions have little relevance to summary judgment.

The judgment of the trial court as to the breach of contract action is reversed, and the case is remanded to the trial court for trial on the merits.

Costs of appeal are assessed against Ap-pellee.


author: BOB PEMBERTON, Justice.

text:
    Gary L. MOYER, Appellant, v. Marsha Ann MOYER, Appellee.
    No. 03-04-00444-CV.
    Court of Appeals of Texas, Austin.
    Aug. 17, 2005.

      Keith M. Remels, Pollicoff, Smith & Re-méis, L.L.P., Houston, for appellant.
    Laurie Nowlin, Atíns & Nowlin, LLP, Round Rock, Timothy M. Sulak, Morris, Craven & Sulak, LLP, Pamela Stanton Baron, Austin, for appellee.
    Before Chief Justice LAW, Justices B.A. SMITH and PEMBERTON.
   OPINION

BOB PEMBERTON, Justice.

This is an appeal from an order granting turnover relief and appointing a receiver and master in chancery who had participated in the underlying action as a testifying expert. In the underlying action, ap-pellee Marsha Ann Moyer was awarded a divorce from appellant Gary Moyer, actual damages for intentional infliction of emotional distress, and punitive damages. Gary did not supersede the judgment. It is undisputed that, following the verdict, Gary assigned property of his wholly-owned corporation to a pair of newly-created foreign limited partnerships in which he had controlling interests; he also assigned certain real property from the corporation to himself individually and proceeded to claim it as his homestead. Based on evidence of these transactions, Marsha obtained the order on appeal in this proceeding.

In eight issues, Gary argues that the district court abused its discretion because (1) the turnover relief ordered by the district is insufficiently specific regarding the property to be turned over and extends to exempt property; (2) the appointed receiver had an interest in the underlying litigation and the district court improperly awarded him fees without a showing of reasonableness or completed work; and (3) there was no showing of good cause to appoint a master in chancery, the appointee had an interest in the litigation, and was not a licensed attorney. We will reverse and remand the order as it pertains to the turnover, the receiver appointed, and the receiver’s fee. We are without jurisdiction to consider the issues related to the appointment of a master in chancery.

BACKGROUND

In this cause, Marsha sought a range of remedies to aid in enforcing her judgment against Gary in the underlying action. The district court heard evidence that, around the time the court rendered judgment on the jury’s verdict, Gary undertook a series of transactions that had the effect of:

• transferring the business assets of his wholly-owned Texas corporation, Paper Resources International, Inc. — including office equipment, intellectual property, tax credits, and accounts receivable — to a newly-created Aaska limited partnership, Paper Resources International L.P., which Moyer subsequently designated as the successor to his Texas corporation;
• transferring certain land and assets “pertinent to the land” — including livestock, horses, a sprayer, a truck, trailers, heavy equipment, and a welder — from the Texas corporation to a newly-created Aaska limited partnership, Florence Investments L.P.;
• transferring the Texas corporation’s 100 acres of remaining land to Gary individually, who proceeded to claim the property as his homestead; and
• placing control of both limited partnerships in Gary, who had 98% limited partnership interests in both, as well as 100% membership in each limited partnership’s general partners, a pair of newly-created West Indies limited liability corporations. The general partner of Paper Resources International L.P. was Paper Resources Management, L.L.C.; the general partner of Florence Investments L.P. was Florence Investments Management, L.L.G.

The principal place of both limited partnerships was the same Florence, Texas, address as the original Texas corporation.

Although admitting to an earlier utterance that he had wanted to “preserve something for myself,” Gary insisted that there was nothing “illegal or immoral” about these transactions. He emphasized that, in the underlying action, the issue of whether Paper Resources International, Inc. was his alter ego had been submitted to the jury, which had found in the negative. Gary concluded that because only he, and not Paper Resources International, Inc., was a judgment debtor, nothing prevented the company from restructuring and transferring its assets so as to avoid entanglement with Gary’s personal legal problems. As he put it, “Paper Resources is and was a separate entity from me, and I had a responsibility to do the best I could by those companies to keep them from being subject to anything that would go wrong with me.”

Marsha characterizes the transactions as a “pattern of shifting funds and assets to avoid execution” on the unsuperseded judgment. At the close of the hearing, the district court granted the remedies Marsha had requested, including (1) a temporary injunction barring Gary from transferring assets related to his businesses; (2) a charging order against Gary’s interests in the two limited partnerships, see Tex.Rev.Civ. Stat. Ann. art. 6132a-1 (West Supp.2004-05); (3) a turnover order; and (4) the appointment of Steve Pena, an accountant who had served as Marsha’s damages expert in the underlying case, as both receiver and master in chancery, and awarding him fees. Gary largely did not contest either the injunction or the charging order, and neither are at issue on appeal, but contends that the district court abused its discretion with regard to other relief it ordered.

DISCUSSION

Gary brings eight issues in which he challenges the district court’s order of turnover relief, its appointment of Pena as receiver, its fee award to Pena, and its appointment of Pena as master in chancery.

Standard of review

We review a turnover order, an appointment of a receiver, and an award of fees to the receiver for an abuse of discretion. See Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex.1991); Roebuck v. Horn, 74 S.W.3d 160, 163 (Tex.App.-Beaumont 2002, no pet.); Stanfield v. Stanfield, No. 09-99-00453-CV, 2000 WL 1475853, at ⅜5, 2000 Tex.App. LEXIS 6743, at *14 (Tex.App.-Beaumont 2000, no pet.) (not designated for publication); Rusk v. Rusk, 5 S.W.3d 299, 306-07 (Tex.App.-Houston [14th Dist.] 1999, pet. denied); see also Fortenberry v. Cavanaugh, No. 03-04-00816-CV, 2005 WL 1412103, at *2-4, 2005 Tex.App. LEXIS 4665, at *5-6 (Tex.App.-Austin 2005, no pet. h.) (mem. op.); Schulze v. Cap Collection JV7, No. 03-03-00390-CV, 2004 WL 2108730, at *3, 2004 Tex.App. LEXIS 8454, at *8 (Tex. App.-Austin Sept. 23, 2004, pet. filed) (mem.op.). A trial court may be reversed for abusing its discretion if we find that it acted in an unreasonable or arbitrary manner, without reference to any guiding rules and principles. Beaumont Bank, N.A., 806 S.W.2d at 226.

Turnover relief

Gary asserts in his first issue that the district court’s turnover order constitutes an abuse of discretion because it fails to identify specific non-exempt property to be turned over. In his second, somewhat overlapping issue, he contends that the turnover order impermissibly extends to exempt property. A “turnover” order is a statutory procedural device through which judgment creditors may reach assets of a judgment debtor that are otherwise difficult to attach or levy by ordinary legal process. See Tex. Civ. Prac. & Rem.Code Ann. § 31.002 (West Supp.2004-05); Beaumont Bank, N.A., 806 S.W.2d at 224. To obtain relief under the “turnover statute,” section 31.002 of the civil practices and remedies code, a judgment creditor must prove (1) the judgment debtor owns property, including present or future rights to property; (2) the property is not exempt from attachment, execution, or seizure; and (3) the property “cannot readily be attached or levied on or by ordinary legal process.” Tex. Civ. Prac. & Rem.Code Ann. § 31.002(a). The district court made the following findings regarding these statutory elements:

1.Defendant owns property described as 100% membership interest in Paper Resources Management, L.L.C. and 100% membership interest in Florence Investments Management, L.L.C. Paper Resources Management, L.L.C. is purportedly the general manager of Paper Resources Limited Partnership, and Florence Investments Management, L.L.C. is purportedly the general manager of Florence Investments Limited Partnership. Paper Resources Limited Partnership is purportedly the successor of Paper Resources International, Inc., of which Defendant is the sole owner, officer, and director;
2. These properties are not exempt under any statute from attachment, execution or seizure for the satisfaction of liabilities.
3. These properties cannot readily be attached or levied upon by ordinary legal process.

Upon finding that the elements of section 31.002(a) are satisfied, a trial court has discretion to issue a range of remedies, including ordering the judgment debtor to turn over nonexempt property that is in the debtor’s possession or is subject to the debtor’s control to a designated sheriff or constable for execution, and “appointing] a receiver with the authority to take possession of the nonexempt property, sell it, and pay the proceeds to the judgment creditor to the extent required to satisfy the judgment.” Id. § 31.002(b). Here, the district court appointed Steve Pena as receiver and vested him with the following powers:

all the power and authority to take possession of all nonexempt property of Gary Moyer that is in the actual or constructive possession or control of Gary Moyer, including but not limited to all property incidental to or associated with the daily operations of Paper Resources International, Inc., Paper Resources Management, L.L.C., and Florence Investments Management, L.L.C., including but not limited to all cash, accounts receivable, notes receivable, promissory notes, drafts and checks, monies on deposit in financial institutions, financial accounts (bank accounts), certificates of deposit, money market accounts, accounts held by any third party, stocks, all securities, all real property deeds to real property, titles to automobiles or other vehicles, boats, planes, all safe deposit boxes or vaults and the contents therein, monies received by the Defendant in the form of checks, cash or credit card payments or receipts; any and all causes of action or chooses of action, contract rights whether present or future; and all furniture, fixtures, equipment, supplies and inventory, and all documents, books and records related to any of the herein described property (including financial records) that are in the actual or constructive possession or control of Gary Moyer; and to pay the proceeds to Plaintiff to the extent required to satisfy her judgment (or the balance due if the judgment has been partially satisfied) which amount includes principal, prejudgment and post-judgment interest, together with costs.

Gary urges that this order impermissibly fails to identify specific non-exempt property or rights thereto that he possessed that would enable him to comply with the order, but merely employs a “laundry list” of broad property categories with little or no relationship to the evidence. In response, Marsha contends that it is sufficient that the order purports to be limited to “nonexempt property of Gary Moyer that is in the actual or constructive possession or control of Gary Moyer,” and identifies “all property incidental to or associated with the daily operations of Paper Resources International, Inc., Paper Resources Management, L.L.C., and Florence Investments Management, L.L.C.” While herself characterizing the remainder of the paragraph as a “laundry list,” Marsha suggests that the district court did not abuse its discretion in employing broad categories in the face of evidence that Gary had been “engaged in a complicated maneuvering of assets that had converted previously non-exempt assets to homestead and that has made the execution on assets difficult.”

Gary’s argument finds support in decisions invalidating turnover orders in whole or part for lack of specificity concerning the property to be turned over. See Newman v. Toy, 926 S.W.2d 629, 631-32 (Tex.App.-Austin 1996, writ denied); Ex parte Prado, 911 S.W.2d 849, 850 (Tex.App.-Austin 1995, no writ); see also In re Montgomery, 138 S.W.3d 569, 572-73 (Tex.App.Beaumont 2004, pet. denied); Roebuck v. Horn, 74 S.W.3d 160, 163-65 (Tex.App.Beaumont 2002, no pet.); Burns v. Miller, Hiersche, Martens & Hayward, P.C., 948 S.W.2d 317, 324 (Tex.App.-Dallas 1997, writ denied); Bergman v. Bergman, 828 S.W.2d 555, 557 (Tex.App.-El Paso 1992, no writ). Marsha attempts to distinguish these decisions as involving turnover orders that, due to their vagueness of lack of specificity, encompassed exempt property or third-party property, or effected other unlawful results that she asserts are not present here. In fact, some of these decisions have appeared to link the specificity requirement to these purposes. Some emphasize that turnover orders are in the nature of mandatory injunctions and are enforceable by contempt, and thus implicate due process concepts. Bergman, 828 S.W.2d at 557 (order “must be definite, clear and concise, leaving the person enjoined in no doubt about his duties, and should not be such as would call on him for interpretations, inferences or conclusions”) (citing Schultz v. Fifth Judicial Dist. Court of Appeals, 810 S.W.2d 738 (Tex.1991), and Gulf Oil Corp. v. Walton, 317 S.W.2d 260, 264 (Tex.Civ.App.-El Paso 1958, no writ)); see also Burns, 948 S.W.2d at 324 (same). Others acknowledge that this requirement aids in ensuring that the turnover order does not extend to exempt property or property of third parties. Roebuck, 74 S.W.3d at 163-64 (broad turnover order improperly extended to assets owned in whole or part by third parties); Burns, 948 S.W.2d at 326-27 (non-specific order to turn over “cash, money orders, checks ... in any form and in anyone’s possession which Burns beneficially owns or may own in the future” improperly extended to exempt and currently nonexistent property). Similarly, we have recognized that a turnover order requiring a judgment debtor to make cash payments without specifying the non-exempt asset from which the payments are to be derived effectively forced the judgment debtor “to choose between work [to earn the required payment] and jail,” and held that “the imposition of such a choice is beyond the power of the [turnover] statute.” Ex parte Prado, 911 S.W.2d at 850.

But the specificity requirement is not merely a means to these ends. Instead, it derives from the statutory requirements and limitations governing turnover relief. To meet the requirements of section 31.002, the court’s order must be specific in both identifying the non-exempt property that is susceptible to turnover relief and in tailoring the turnover relief to that property. As the Bergman court explained:

In the Schultz opinion, the [Supreme] Court referring to the turnover statute said: The statute requires a factual showing that the judgment debtor has non-exempt property that is not readily subject to ordinary execution.... Upon proof of the necessary facts, it authorizes the trial court to order affirmative action by the judgment debtor and others to assist the judgment creditor in subjecting such non-exempt property to satisfaction of the underlying judgment.

828 S.W.2d at 557 (emphasis in original). The court of appeals then elaborated that

this language certainly mandates that the trial court is to have a hearing, determine what specific assets are exempt, and what assets are subject to the court’s order and then to direct the payment as the court determines is proper. If the statute requires a factual showing of non-exempt property, the court has to be acting with regard to certain specific property that it will direct be turned over to satisfy a judgment. It is not to be left to the debtor to determine what property that person has and whether it is exempt. Otherwise, there would be no need for any Tactual showing’ by ‘proof of the necessary facts’ as required by [the supreme court’s] opinion.

Id.

The turnover order in this case does not comply with section 31.002. See Tex. Civ. Prac. & Rem.Code § 31.002. It compels Gary to turn over property beyond the sole non-exempt property the district court found that he possessed and controlled and that “cannot readily be attached or levied upon by ordinary legal process,” his “100% membership interest in Paper Resources Management, L.L.C. and 100% membership interest in Florence Investments Management, L.L.C.” Moreover, the list refers to property items whose existence— whether controlled by Moyer, Paper Resources International, Inc., or any other entity — is not supported by the evidence. For example, there was no evidence presented regarding any “boats,” “planes,” and “safe deposit boxes or vaults and the contents therein.” ■ In Neuman, we invalidated a portion of an order requiring turnover of money receipts from a podiatrist’s “independent work as a sole proprietor” where there was no evidence that he, in fact, received any sums from a sole proprietorship and, “in all events, the order omitfted] to identify specifically such property.” Newman, 926 S.W.2d at 681-32.

Some of the categories, as Marsha observes, do appear to encompass property whose existence was established in the evidence. But the mere fact that general property categories in a turnover order coincide with some actual existing property is insufficient to cure the order’s lack of specificity. The Beaumont Court of Appeals invalidated a similar turnover order that “did not make any specific reference to the assets that were proved during the hearing” but referred generally to “books,” “stocks,” “titles to automobiles,” “cash,” “other vehicles,” and “real property/deeds to real property.” Roebuck, 74 S.W.3d at 163. Although some of these categories included specific non-exempt assets of the judgment debtor, the court reversed and remanded the order in its entirety because “[a] reference to broad categories of assets does not constitute a reference to specific assets that is required in a turnover order” and the order contained “numerous generalized categories of assets without any supporting proof as to their ownership by [the debtor].” Id.

We are similarly persuaded that we must reverse and remand the turnover order in this case. Its fatal lack of specificity cannot be justified, as Marsha urges, by evidence of Gary’s “complicated maneuvering of assets that had converted previously non-exempt assets to homestead and that has made the execution on assets difficult.” Even if these are valid concerns, we are not permitted to ignore the restrictions and limitations the legislature has placed in section 31.002. We note that injunctive relief is available to prevent judgment debtors from dissipating or converting assets and that, in fact, the district court granted such relief here. Nor did Gary’s transfer of assets appear to create uncertainty regarding the nature of the assets at issue. To the contrary, the evidence clearly identified several specific items of business assets, real property, and assets “pertinent to the land.” To the extent that Marsha desires greater clarity concerning the nature of Gary’s property, she may seek it through post-judgment discovery. See Tex.R. Civ. P. 621a.

We sustain Gary’s first issue, and reverse and remand the turnover order for further proceedings consistent with this opinion. We thus do not reach Gary’s second issue in which he contends the current order improperly extends to exempt property, but trust that the district court, while ensuring the required specificity regarding non-exempt property, will ensure that any further turnover orders comply with this limitation.

Appointment of Marsha’s expert as receiver

The receiver appointed by the district court, Steve D. Pena, a certified public accountant, had been Marsha’s retained damages expert in the underlying case. Gary contends that Pena’s appointment was an abuse of discretion because Pena has an interest in the matter. We agree that the district court abused its discretion in appointing Pena.

The parties agree that the conflict-of-interest standard in section 64.021 of the civil practice and remedies code governed the district court’s receiver appointment. See Tex. Civ. Prac. & Rem.Code Ann. § 64.021 (West Supp.2004-05). Section 64.021 provides, in relevant part, that a person appointed as a receiver for property located in this state must not be “a party, attorney, or other person interested in the action for appointment of a receiver.” Id. On appeal, the parties’ dispute focuses primarily on the meaning of “interested in the action for appointment of a receiver.” (Emphasis added.) Gary contends that Pena, a retained expert who testified on behalf of Marsha in the underlying action, would necessarily be interested and biased against him when acting as receiver. Marsha does not dispute that Pena was “interested” in the underlying action, but contends that Pena has no interest in the receivership action itself. She adds that she filed “the action for appointment of receiver” under a separate cause number from the underlying divorce and damages suit in which Pena testified. See id. § 31.002(d) (judgment creditor may seek turnover relief in either same cause in which judgment was rendered or independent proceeding).

We agree with Marsha that the focus on our inquiry must be whether Pena has a disqualifying interest in “the action for appointment of receiver” in particular, not the underlying action; we may not ignore the language the legislature has deliberately chosen. See Sorokolit v. Rhodes, 889 S.W.2d 239, 241 (Tex.1994) (“In applying the plain and common meaning of the language in a statute, courts may not by implication enlarge the meaning of any word in the statute beyond its ordinary meaning; such implication is inappropriate when legislative intent may be gathered from a reasonable interpretation of the statute as it is written.”); Gonzales v. Concerned Citizens of Webberville, 173 S.W.3d 112, 118 (Tex.App.-Austin 2005, no pet. h.); see also James v. Roberts Tel. & Electr. Co., 206 S.W. 933, 935 (Tex.Comm’n App.1918, judgm’t adopted) (stating conflict issue in terms of “[wjhether a receiver who is interested in the receivership. ... ”) (emphasis added). However, at least where receivers have been appointed prior to judgment, Texas courts have appeared to assume that persons interested in the underlying action would likewise be interested in the receivership. See O’Ferral v. Coolidge, 149 Tex. 61, 228 S.W.2d 146, 149 (1950) (attorney for party was “clearly” disqualified from serving as receiver); Zanes v. Mercantile Bank & Trust Co., 49 S.W.2d 922, 928 (Tex.Civ.App.-Dallas 1932, writ ref'd) (receiver “is an indifferent person, between the parties to a cause, appointed by the court to receive and preserve the property or fund in litigation pendente lite”); Crawford v. Crawford, 163 S.W. 115, 116 (Tex.Civ.App.-Texarkana 1913, no writ) (“persons interested in the subject-matter of the litigation or results sought to' be attained thereby” prohibited from receivership appointment); see also Wiley v. Sclafani, 943 S.W.2d 107, 110 (Tex.App.-Houston [1st Dist.] 1997, no writ) (relying on Zanes in addressing standing of receiver to appeal).

However, this case presents the somewhat different question of whether a retained expert in the underlying cause may nonetheless not be interested in a post-judgment proceeding to appoint a receiver. This appears to be a question of first impression under Texas law, as Marsha observes. Our resolution of that issue depends in part on the nature of the “interest” with which the legislature was concerned in section 64.021 and its statutory predecessors. See Tex. Civ. Prac. & Rem. Code Ann. § 64.021. Texas courts have long assumed that a financial stake in one of the parties would disqualify a prospective receiver. See, e.g., James, 206 S.W. at 935 (disqualifying shareholder of party; citing cases involving partners appointed as receivers of partnership property and trustees or executors appointed as receiver of trusts estates from which they were compensated); Roberts Tel. & Electr. Co. v. Farmers’ & Merchants’ Nat. Bank, 155 S.W. 629, 632 (Tex.Civ.App.-Texarkana 1913), rev’d on other grounds, 206 S.W. 933, 935 (Tex. Com.App.1918, judgm’t adopted) (cashier and acting manager of bank who was also shareholder was disqualified from serving as receiver of bank).

However, we need not decide whether, as a general proposition, retained experts in underlying litigation could ever be appointed as receiver in a subsequent receivership proceeding. On the record before us, there was no evidence that Pena met the statutory requirements for serving as receiver in this case. See Pena v. Sell, 760 S.W.2d 811, 812-13 (Tex.App.-Amarillo 1988, no writ); see also Tex. Civ. Prac. & Rem.Code Ann. § 64.021. There was undisputed evidence that Pena had served as Marsha’s testifying expert in the underlying cause. However, Marsha did not call Pena to testify at the hearing and offered no evidence, only argument, to establish that Pena did not have an ongoing business relationship, financial stake, or other interest in the receivership. On this record, we are compelled to hold that the district court abused its discretion in appointing Pena as receiver. We sustain Gary’s third issue.

Receivership fees

In his fourth and fifth issues, Gary argues that the district court abused its discretion by setting the receiver’s fee without any evidence of reasonableness, and by allowing the receiver to be compensated prior to his discharge. Marsha responds that the order authorizing fees is interlocutory because the trial court did not purport to determine the total value of the receiver’s fee up to a certain time, depriving this Court of jurisdiction to consider this issue. Bergeron v. Sessions, 561 S.W.2d 551, 553 (Tex.Civ.App.-Dallas 1977, writ ref'd n.r.e.).

The order states that “it is hereby ORDERED, DIRECTED and AUTHORIZED that Receiver, STEVE D. PENA, CPA pay himself as receiver’s fees an amount not more than twenty-five percent (25%) of all proceeds coming into his possession to be paid by the Receiver, which amount the Court finds to be a fair, reasonable and necessary fee for the Receiver, and to distribute all remaining proceeds to Plaintiffs attorneys.... Receiver fees in excess of twenty-five percent (25%) may be awarded after application to a separate order of this Court.” (Emphasis added.) The plain language of the order indicates that at the time the order was signed, the court made a determination that a twenty-five percent commission would be reasonable. The commission could be collected as the proceeds came into the receiver’s possession; only remaining proceeds would be distributed. Moreover, the court found that if the receiver determined that twenty-five percent was not sufficient, he could apply for more in a separate request. The plain language of the order results in a final determination that twenty-five percent of proceeds was a fair, reasonable and necessary fee, and was made when the order was signed. Therefore, the order was not interlocutory and we have jurisdiction to consider whether there was evidence to support a finding that the fee was reasonable. Id.

The receiver’s fee should be measured by the value of the services rendered; the results which are accomplished by the receiver must be considered in determining a reasonable fee. Stanfield, 2000 WL 1475853, at *5; B.B.M.M., Ltd. v. Texas Commerce Bank-Chemical, 777 S.W.2d 193, 198 (Tex.App.-Houston [14th Dist.] 1989, no pet.). There must be evidence to establish reasonableness of the fee. Stanfield, 2000 WL 1475853, at *5. Furthermore, prior to a final accounting and discharge of the receiver, only a partial advance toward a final fee may be made because the reasonableness of the fee is measured in light of the value of the receiver’s work. Bergeron, 561 S.W.2d at 553; see Stanfield, 2000 WL 1475853, at *5; B.B.M.M., Ltd., 777 S.W.2d at 198. Yet, in the trial court, no evidence was presented of what would constitute a fair, reasonable, or necessary fee.

Marsha urges us to presume that the fee is reasonable because there was evidence that it would be difficult to trace Gary’s assets and collect them. Even assuming she is correct, however, there was no testimony or other evidence establishing how much the receiver should be compensated for the task. Furthermore, the value of the receiver’s future or ultimate accomplishments could not have been considered at the time the order appointing him was signed. We sustain Gary’s fourth and fifth issues.

Master in chancery

In his sixth, seventh, and eighth issues, Gary asserts that the trial court erred by appointing Pena as master in chancery without a finding of good cause and when Pena is not an attorney and- has an interest in the litigation. See Tex.R. Civ. P. 171. Marsha responds that the appointment of a master in chancery is not a final, appealable order.

Texas Rule of Civil Procedure 171 permits the trial court, “in exceptional cases, for good cause,” to appoint a master in chancery “who shall be a citizen of this State, and not an attorney for either party to the action, nor related to either party.” Id. The order gives Pena, as master, “the fullest and broadest powers” under rule 171, including but not limited to ordering the production of evidence, scheduling hearings, and examining witnesses under oath. Also pursuant to rule 171, Pena must file a master’s report, and the court may then confirm, modify, correct, reject, reverse or recommit the report, after it is filed, as the court may deem proper and necessary in the particular circumstances of the ease. Id.

As a general rule, an appeal may be taken only from a final judgment. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex.2001). A judgment is final for purposes of appeal if it disposes of all pending parties and claims in the record, except as necessary to carry out the decree. Id. Because Pena must complete his master’s duties and file a final report which the trial court may accept, modify, or fully reject, among other options, the order does not fully dispose of all issues and is interlocutory. See id. The legislature has declared that only certain narrow issues may be brought by interlocutory appeal, and, in contrast to the receivership issues addressed previously, an order appointing a master in chancery is not one of them. See Urso v. Lyon Fin. Servs., 93 S.W.3d 276, 278 (Tex.App.-Houston [14th Dist.] 2002, no pet.); see also Tex. Civ. Prac. & Rem.Code Ann. § 51.014 (West Supp.2004-05); Hardy v. Silva, No. 01-90-00135-CV, 1990 WL 98533, 1990 Tex.App. LEXIS 1690 (Tex.App.-Houston [1st Dist.] 1990, no pet.) (not designated for publication) (“With respect to the order appointing a master in chancery, we are aware of no authority authorizing an interlocutory appeal from this order.”). Accordingly, we are without jurisdiction to consider Gary’s sixth, seventh, and eighth issues.

CONCLUSION

Having sustained Gary’s first five issues, we reverse and remand for further proceedings consistent with this opinion.

      . Gary has appealed this judgment, which is presently pending in Cause No. 03-03-00751-CV in this Court.

      . Gary's daughter, Annette Capriotti, was assigned a one percent interest in each limited partnership. The remaining one percent of each limited partnership was held by its general partner.

      . This may explain the references to Florence in the names of some of the new entities.

      . The record does not indicate whether this or any other injunctive relief is presently in effect.

      . At the turnover hearing, Gary’s attorney stated that "not one single piece of post-judgment discovery has gone out.” Marsha’s attorney argued that post-judgment discovery was not required because Gary "does not get to dictate or choose how I go about collecting on my judgment.”

      . We express no opinion regarding the merits of these issues in the event they are later presented through other appellate avenues.


author: PER CURIAM. TOM GRAY, Chief Justice, PER CURIAM.

text:
    Sonia OLIVAREZ, d/b/a Sonia Olivarez Bail Bonds, Appellant, v. The STATE of Texas, Appellee.
    No. 10-05-00317-CR.
    Court of Appeals of Texas, Waco.
    Dec. 21, 2005.
    Order Granting Rehearing Feb. 22, 2006.

      John D. Nation, Dallas, for appellant.
    Dale S. Hanna, Johnson County Crim. Dist. Atty., Cleburne, for appellee.
    Before Chief Justice GRAY, Justice VANCE, and Justice REYNA.
   OPINION

PER CURIAM.

Sonia Olivarez dba Sonia Olivarez Bail Bonds appeals from the denial of her motion for a special bill of review under article 22.17 of the Code of Criminal Procedure. To date, Olivarez has failed to file a docketing statement. See Tex.R.App. P. 32.

The Clerk of this Court notified Olivarez by letter dated September 26, 2005 that no docketing statement had been received and warned her that the appeal was subject to dismissal if she did not file one within twenty-one days. No response has been received to this notice.

Rule of Appellate Procedure 42.3(c) provides for the involuntary dismissal of a civil appeal if the appellant has failed to comply with “a notice from the clerk requiring a response or other action within a specified time.” The procedural rules for civil appeals apply to bond forfeiture appeals. See Tex.Code Crim. Proc. Ann. art. 44.44 (Vernon 1979); McCluskey v. State, 64 S.W.3d 621, 623 (Tex.App.-Houston [1st Dist.] 2001, no pet.); see also Dees v. State, 865 S.W.2d 461, 462 (Tex.Crim.App.1993) (procedural rules for civil trials apply to bond forfeiture proceedings in trial court).

There are filing fees and other court costs normally associated with civil appeals which are not ordinarily imposed in an appeal from a criminal conviction. See Tex. Gov' t Code Ann. §§ 51.005, 51.207 (Vernon 2005); Tex.R.App. P. 5; Order Regarding Fees Charged in Civil Cases in the Supreme Court and the Courts of Appeals, Mise. Docket No. 98-9120 (Tex. Jul. 21, 1998). In the past, this Court has not traditionally required the payment of filing fees or other court costs in a bond forfeiture appeal. However, it appears that this practice is contrary to the law.

In Dees, the Court of Criminal Appeals cited article 22.10 of the Code of Criminal Procedure in support of the proposition that “civil court costs may be assessed in a bail bond forfeiture proceeding.” 865 S.W.2d at 462 (citing Tex.Code Crim. Proc. Ann. art. 22.10 (Vernon Supp.2005)).

Following the holding of Dees, it appears that all costs traditionally associated with a civil appeal should be imposed in an appeal from a bond forfeiture proceeding. Thus, we conclude that the $125 filing fee and the filing fees for pleadings should be assessed in such an appeal. See Tex. Gov' t Code Ann. § 51.207; Tex.R.App. P. 5; Order Regarding Fees Charged in Civil Cases in the Supreme Court and the Courts of Appeals, Misc. Docket No. 98-9120.

To date however, this Court has not required the payment of such fees. Because we have not previously required the payment of such fees in bond forfeiture appeals, we will not do so in this appeal or in any bond forfeiture appeal currently pending in this Court.

Absent a specific exemption, the Clerk of the Court must collect filing fees at the time a document is presented for filing. Tex.R.App. P. 12.1(b); Order Regarding Fees Charged in Civil Cases in the Supreme Court and the Courts of Appeals, Misc. Docket No. 98-9120; see also Tex.R.App. P. 5; 10th Tex.App. (Waco) Loc. R. 6. Under these circumstances, we suspend the rule and order the Clerk to write off all unpaid filing fees in this case. Tex.R.App. P. 2.

Olivarez has failed to comply with a notice from the Clerk of this Court requiring Olivarez to file a docketing statement within twenty-one days. Accordingly, this appeal is dismissed. See Tex.R.App. P. 42.3(c).

(Justice Vance concurs with a note: A docketing statement is for administrative purposes only and does not affect our jurisdiction. Tex.R.App. P. 32.4. Dismissal as a sanction is, in effect, a “death penalty,” which precludes consideration of the merits of the appellant’s claim. Under the law developed to evaluate trial-court dismissals of civil proceedings as sanctions, such a sanction must be “just.” Trans-American Natural Gas v. Powell, 811 S.W.2d 913, 917 (Tex.1991) (orig.proceeding). That means a direct relationship must exist between the offensive conduct and the sanction imposed. Id. Furthermore, a permissible sanction should be no more severe than required to satisfy legitimate purposes. Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 849 (Tex.1992) (orig.proceeding). This means that a court must consider relatively less stringent sanctions first to determine whether lesser sanctions will fully promote compliance, deterrence, and discourage further abuse. Id. Our own precedent holds that “the Rules of Civil Procedure apply to forfeiture proceedings under article 18.18(b) of the Code of Criminal Procedure.” F & H Investments Inc. v. State, 55 S.W.3d 663, 668, (Tex.App.-Waco 2001, no pet.). The majority says we “notified Olivarez”; our letter shows we notified Olivarez’s attorney. We have not tried to determine where the fault lies as between Olivarez or her lawyer, nor have we imposed a lesser sanction such as a fine. While we may conclude that the failure of the lawyer to file a docketing statement reflects adversely on the merits of the client’s appeal, we should be cautious in doing so.)

TOM GRAY, Chief Justice,

dissenting.

Waiving all the filing fees in all pending bond forfeiture appeals is not necessary “to expedite a decision or for other good cause.” Tex.R.App. P. 2. And I do not believe it is necessary in this appeal. Thus, I cannot authorize this Court to violate the law by failing to collect or attempt to collect the filing fee. I must therefore dissent to the majority doing so.

The majority has determined that it is a violation of the rules and statutes to not charge a filing fee in a bond forfeiture case. They have also determined that a filing fee has not been paid in this case. But the majority contends “this Court has not traditionally required the payment of the filing fees,” so they will not collect the fee in this case or in any pending bond forfeiture case. The reason for the decision not to collect the fee is misleading. Although I am unclear about what they mean by the term “required” in connection with the payment of filing fees, we have, but not consistently, collected filing fees in bond forfeiture cases. See e.g. Gonzales Bail Bonds v. State, 147 S.W.3d 557 (Tex.App.-Waco 2004, no pet.) (filing fees collected); Hill v. State, 920 S.W.2d 468 (Tex.App.-Waco 1996), rev’d, 955 S.W.2d 96 (Tex.Crim.App.1997) (filing fees collected); Lyles v. Texas, 814 S.W.2d 411 (Tex.App.-Waco 1991), rev’d, 850 S.W.2d 497 (Tex.Crim.App.1993) (filing fees collected); Hubbard v. State, 814 S.W.2d 402 (Tex.App.-Waco 1991, no pet.) (filing fees collected). Cf. Young v. State, No. 10-02-00343-CR, 2004 WL 1007827, 2004 Tex.App. LEXIS 4201 (Tex.App.-Waco, May 5, 2004, petref d) (not designated for publication) (no filing fees collected); Int’l Fid. Ins. Co. v. State, No. 10-03-00178-CR, 2003 WL 22976423, 2003 Tex.App. LEXIS 10658 (Tex.App.-Waco, Dec. 17, 2003, no pet.) (not designated for publication) (no filing fees collected); Gjetley v. State, No. 10-99-00235-CR (Tex.App.-Waco May 24, 2000, no pet.) (not designated for publication) (no filing fees collected).

And in this case, notice was sent that the filing fee was due; but the Court has simply failed to pursue collecting it.

Even if we use Rule 2 to suspend the collection of a filing fee in this case, we certainly should not suspend it in all pending cases. After all, the Court of Criminal Appeals authorized the assessment of civil court costs in bond forfeiture proceedings after the entry of a judgment nisi. Dees v. State, 865 S.W.2d 461, 462 (Tex.Crim.App.1993). What makes the collection of filing fees on appeal any different?

It is the clerk’s duty to collect the fees. Tex.R.App. P. 12.1(b). If the clerk tells me the cost of pursuing the unpaid fees in a particular ease will exceed the fees collected, then I may consider the use of Rule 2. Otherwise, I cannot condone the use of it for this case or other pending bond forfeiture cases.

MeRits of the Issue

The opinion is not clear if we are dismissing for the failure to file a docketing statement or for the failure to comply with a notice from the clerk. The opinion starts by addressing the failure to file a docketing statement. But the opinion concludes with what reads as a dismissal for failure to comply with a notice from the clerk, including a citation to Texas Rule of Appellate Procedure 42.3(c). We have not notified the appellant that failure to respond to the notice from the clerk is an independent ground for dismissal. It is improper for us to dismiss for a violation of the notice from the clerk, cf. Villarreal v. San Antonio Truck & Equip., 994 S.W.2d 628, 632 (Tex.1999) (notice that case would be dismissed for want of prosecution if plaintiff did not announce he was ready to proceed did not adequately apprise plaintiff that the court would exercise inherent power to dismiss if he did not also show cause for not dismissing.). This is a different failure than the failure to file the docketing statement.

Conclusion

I would notify Olivarez:

1. The filing fee is past due and must be paid within 21 days or the case will be dismissed without further notice;
2. The docketing statement is past due and must be filed within 21 days or the case will be dismissed without further notice; and
3. The failure to respond to this notice from the clerk is an independent basis upon which the appeal can be dismissed. If a response addressing these issues is not received within 21 days, this case will be dismissed without further notice.

Only after the failure to pay the filing fee, or failure to file a docketing statement, or failure to respond to the notice, would I dismiss the appeal. Because I believe dismissal on the vague grounds as expressed in the opinion is premature, I dissent.

ORDER

PER CURIAM.

By opinion and judgment dated December 21, 2005, the Court dismissed this appeal because Appellant Sonia Olivarez “failed to comply with a notice from the Clerk of this Court requiring Olivarez to file a docketing statement within twenty-one days.” Olivarez v. State, No. 10-05-00317-CR, 183 S.W.3d 59, 2005 WL 3501714, 2005 Tex.App. LEXIS 10642, at **4-5 (Tex.App.-Waco Dec. 21, 2005, no pet. h.) (per curiam).

Olivarez filed a pro se motion for rehearing on January 3, 2006, including therewith a completed docketing statement. Oliva-rez’s counsel filed a motion for rehearing on January 9. The State has filed a response to the motions for rehearing.

To date, no motion to withdraw has been filed by Olivarez’s counsel. Thus, we presume that counsel continues to represent Olivarez. Because Olivarez continues to be represented by counsel, we dismiss her pro se motion for rehearing as moot. The motion for rehearing filed in Oliva-rez’s behalf by counsel is granted.

The judgment of dismissal dated December 21, 2005 is withdrawn. However, because the opinion dated December 21, 2005 addresses matters of public importance, it will not be withdrawn. See Polley v. Odom, 963 S.W.2d 917, 917-18 (Tex.App.-Waco 1998, order) (per curiam).

The clerk’s and reporter’s records have been filed. Accordingly, the appellant’s brief is due thirty days after the date of this Order.

Chief Justice GRAY concurs with a note.

      . Article 22.17 provides that the surety on an appearance bond may file a special bill of review within 2 years after that bond was forfeited. Tex.Code Crim. Proc. Ann. art. 22.17 (Vernon 1989). Presumably, a surety will do so only when the principal has been re-arrested. See e.g. Gramercy Ins. Co. v. State, 834 S.W.2d 379, 380-81 (Tex.App.-San Antonio 1992, no pet.).

      . A non-indigent criminal appellant must pay costs for preparation of the appellate record. See Tex.R.App. P. 20.2.

      . I have many of the same observations about Justice Vance's concurring note in this appeal that I made about a similar note in Hensley v. W.M. Specialty Mortg. LLC, No. 10-05-00322-CV, 2005 WL 3073000, **1-3, 2005 Tex.App. LEXIS 9614, *3-8 (Tex.App.-Waco Nov. 16, 2005, no pet. h.) (Gray, C.J., concurring).

       ("Chief Justice Gray's Concurring note: I concur in the result as to this litigant, noting that the filing fees have been paid, including the fees for filing the motion for rehearing. I question, however, the advisability or desirability of leaving in the public domain for use as precedent a per curiam opinion, with a concurring note and a dissenting opinion. The precedential value was not important originally, or it should not have been a per curiam opinion. I fail to see how its stature is increased by no longer resolving a case.”)