HOUSTON – Ruling there is no evidence of fraudulent transfer, the 14th Court of Appeals determined a lower court erred when it appointed a receiver in a case concerning the purchase of an assisted living facility.
Jay and VMK Corp. and John Kelly filed the appeal of the decision of 164th District Court in Harris County after that court granted an order appointing a receiver for the assisted living facility and granted a temporary injunction in their case against Cristina Lopez and Humanitarian Financial Inc. While the appellants raised two concerns, the Appeals Court only saw fitting to look at one, and it reversed the lower court’s decision.
“Although the purchasers assert a claim for equitable subrogation, there is no evidence that they currently have a lien on the property,” Justice Tracy Christopher wrote. “Finally, there is no evidence of a fraudulent transfer.”
Since there was no proof that a fraudulent transfer actually existed, the court ruled the purchasers weren’t entitled to the appointed receiver via the Texas Uniform Fraudulent Transfer Act (TUFTA) and the trial court should not have appointed a receiver. The Appeals Court reversed and remanded the case back to the lower court.
Lopez allegedly paid Regulatory Licensing & Compliance LLC $300,000 to help her buy an assisted living facility. RLC in turn advised Lopez to purchase Highland House Assisted Living Facility for $1.35 million.
Highland House Assisted Living Facility operates under and is owned by is Jay & VMK, and John and Vassie Kelly are the owners of that company. The Kellys, along with Jay & VMK, did agree to sell the property to Lopez for $1.35 million and required her to pay $410,000 in earnest money.
The sale failed to close as agreed and the Kellys and Jay & VMK only gave $200,000 of the money back to Lopez.
"The Lopez parties demanded that RLC either cause the sale to close or refund the $300,000 they had paid for RLC’s consultation services," the ruling states. "In response, RLC sued the Lopez parties in the 164th Judicial District Court in Harris County, seeking a declaratory judgment that no refund is owed. The Lopez parties then sued John, Vassie, VMK, RLC and RLC’s owner Bertram Turner in the 80th Judicial District Court in Harris County."
John Kelly and Jay & VMK later filed a joint response for a preliminary order alleging there was no proof Lopez had a lien on the property. Still, the trial court signed an order that appointed a receiver, which the appellants appealed.
Justices Kevin Jewell and Meagan Hassan also served on the panel for this case.