Diana Fite, M.D. and Intervenor Patrick J. Woods, M.D. v. Emtel, Inc., Joseph Degioanni, M.D., Individually and on Behalf of BEPA

Opinion issued October 2, 2008 .

In The

Court of Appeals

For The

First District of Texas

NO. 01-07-00273-CV

DIANA FITE, M.D. AND PATRICK G. WOODS, M.D., Appellants

V.

EMTEL, INC. AND JOSEPH DEGIOANNI, M.D., Appellees

On Appeal from the 152nd District Court

Harris County, Texas

Trial Court Cause No. 2003-69942

MEMORANDUM OPINION ON REHEARING

We grant appellant’s motion for rehearing. See Tex. R. App. P. 49.3. We

withdraw our January 17, 2008 opinion, substitute this opinion in its place, and vacate

our prior judgment.

In this interlocutory appeal,

appellants, Diana Fite, M.D. and Patrick G.

Woods, M.D., appeal the trial court’s order reappointing James Raymond as receiver

for Brazos Emergency Physicians Association, P.A. (“BEPA”), arguing that (1) no

valid basis was established for placing BEPA into receivership; (2) James Raymond

is disqualified from serving as receiver; and (3) the bond provisions of the

reappointment order rendered the order per se invalid and the amount of bond ordered

was “impermissibly low.” Appellees, however, contend that the original receivership

never expired and that we lack subject matter jurisdiction to consider the appeal of

the trial court’s order of reappointment. We affirm.

BACKGROUND

The parties to this cause and its numerous related lawsuits, who have spent

nearly four years battling each other in court, all share a connection to BEPA, a

professional association formed in 1997 to provide hospitals with physicians for their

emergency care facilities. In 1999, BEPA entered into an agreement for billing,

marketing, and management services with appellee, Emtel, Inc., wherein Emtel would

receive 30% from all fees collected on behalf of BEPA that are not associated with

telemedicine contracts. Joseph Degioanni, M.D., was the sole director of Emtel.

In 2003, appellant, Patrick G. Woods, M.D., a member of BEPA, filed a

derivative suit against appellee, Degioanni, who, at the time, was also BEPA’s

president and treasurer. Woods alleged that Degioanni had misappropriated funds to

benefit Emtel. Shortly thereafter , following a “secret board meeting” that was

conducted by cell phone in a parking garage, Degioanni was ousted as president of

BEPA, and Degioanni’s and Emtel’s access to the bank accounts and lock boxes was

limited. Degioanni, along with Emtel, filed individual and derivative actions seeking

injunctive relief against two members of the BEPA board of directors, appellant,

Diana Fite, M.D. and Medford Cashion, M.D. The second derivative suit is the suit

before us.

In this second derivative suit, Emtel and Degioanni, individually and on behalf

of BEPA, applied for a temporary restraining order, temporary injunction, and motion

to compel arbitration, asserting that “the harm caused by preventing Emtel from

access to BEPA bank accounts and lock boxes is irreparable and imminent. The

recent actions by Dr. Cashion on behalf of BEPA have caused BEPA to be in clear

breach of the Agreement. . . .” Emtel and Degioanni sought a temporary injunction

and restraining order requiring Cashion and Fite to “restore the status quo with regard

to BEPA’s bank accounts and lock boxes.” On December 30, 2003, the trial court

issued an ex parte temporary restraining order

to “maintain status quo pending

resolution of this case.”

Almost two weeks later, the trial court heard Emtel and Degioanni’s

application for temporary injunction. On January 20, 2004, the parties agreed to and

the trial court appointed a receiver, James Raymond, to act as BEPA’s sole director

and president and to take charge and conduct the affairs of BEPA. The trial court

also ordered that the “receivership [] continue in effect until further order of this

court.”

The parties continued to litigate. Among other courses of action, Raymond

negotiated, through his counsel, a series of agreements that, subject to the trial court’s

approval, would settle some of the litigation involving BEPA.

On February 20,

2007, Raymond moved for approval of numerous settlement agreements releasing

BEPA’s claims against Degioanni and several other parties. Fite and Woods

contested the motion and, relying on the Texas Civil Practice and Remedies Code’s

(“CPRC”) receivership provisions , argued that Raymond lacked the power to act on

BEPA’s behalf because his status as receiver had expired on January 20, 2007—three

years after his appointment. In response, Degioanni and Emtel argued that Raymond

was appointed pursuant to the Business Corporations Act; therefore, his appointment

did not terminate until “the condition necessitating the appointment of a receiver has

been remedied.” Degioanni and Emtel then enumerated several reasons why the

receiver was still necessary. The trial court again appointed Raymond “under the

same terms and conditions as in the [2004] original order” to continue until “90 days

after the completion of the litigation that has been initiated by [Raymond] including

any appeals which may arise from that litigation and the distribution of any funds

obtained thereby.” Fite and Woods, who joined the underlying suit as intervenors,

appeal the order appointing Raymond as receiver.

JURISDICTION

Expiration of the Original Receivership Because Degioanni and Emtel contend that we have no jurisdiction to consider

this appeal, the first issue we address is whether the original receivership created on

January 20, 2004 expired after three years. Citing to the language of Articles 7.05

and 7.06 of the Texas Business Corporation Act (the “Act”), Degioanni and Emtel

argue that (1) the original receivership was created under the Act and (2) the term of

receiverships created under the Act do not expire. Thus, they argue that it was

“unnecessary” for the trial court to issue an order “reappointing” Raymond as the

receiver and that we do not have subject matter jurisdiction to consider the merits of

this appeal,

because no interlocutory appeal will lie from the trial court’s

“unnecessary” order. Thus we turn to the issue of whether the receivership had

expired.

To determine when a corporate receivership expires, we look to both the Texas

Civil Practice and Remedies Code and the Act. The CPRC expressly provides that

corporate receiverships expire three years after the receiver is appointed. See Tex.

Civ. Prac. & Rem. Code Ann. § 64.072 (Vernon 2008). Section 64.072(a)

specifically provides as follows:

Limited Duration

(a)Except as provided by this section, a court may not administer a

corporation in receivership for more than three years after the date

the receiver is appointed, and the court shall wind up the affairs

of the corporation within that period.

Id .

The statute also provides that, under certain circumstances and upon the application

of a party and after a hearing , the receivership may be extended for no more than five

years beyond the original three year term. See Tex. Civ. Prac. & Rem. Code Ann.

§ 64.072(d) (Vernon 2008).

Articles 7.05 and 7.06 of the Act also address the term of a corporate

receivership. They provide that a receivership created under the Act shall be

terminated by the trial court when the condition necessitating the appointment of a

receiver is remedied. See Tex. Bus. Corp. Act Ann. art. 7.05, § B, art. 7.06, § B

(Vernon 2003). Both Articles 7.05 and 7.06 contain the following provision:B.In the event that the condition of the corporation necessitating

such an appointment of a receiver is remedied, the receivership

shall be terminated forthwith and the management of the

corporation shall be restored to the directors and officers . . . .

Id .

The Bar Committee’s comments accompanying the Act explain the relationship

between the Act’s receivership provisions and the CPRC. The provisions of the Act

and CPRC are to be read together unless they are inconsistent with one another:

Heretofore receiverships for corporations or their assets have not been

the subject of separate treatment in the statutes but have been governed

by Articles 2293 et seq., Tex.R.C.S. (1925),

relating generally to

receiverships. These general provisions will continue to be applicable

to receiverships other than those for corporations subject to the Act or

their assets and will also continue to be applicable to receiverships for

corporations or their assets with respect to such matters as

qualifications, powers, duties and administrative procedures of

receivers which are not inconsistent with the specific provisions of the

Act.

Tex. Bus. Corp. Act Ann. art. 7.04 cmt. (Vernon Supp. 2003) (emphasis added).

In this case, the original order does not state whether the receivership was

created under the Act or the CPRC. Nevertheless, contrary to the arguments of

Degioanni and Emtel, receiverships created under the Act do not have terms that

never expire. The provisions of the Act and the CPRC regarding the termination of

a receiver’s powers are not inconsistent with one another. The CPRC’s provisions

sets forth the maximum term for a corporate receivership and the Act sets forth the

circumstances under which the receivership must be terminated before the term of the

receivership expires. Reading the CPRC and the Act together we hold that, in the

absence of a timely motion to extend, a corporate receivership expires three years

after it is created and that when the conditions necessitating the creation of the

receivership have been remedied, the receivership shall be terminated before the term

of the receivership expires. Here, since no motion to extend was granted by the trial

court, the original receivership expired on January 20, 2007 —three years after it was

created. Accordingly, for a receivership to exist regarding BEPA after this date, the

trial court was required issue a new order appointing a receiver, and we have

jurisdiction over the appeal of this order. See Tex. Civ. Prac. & Rem. Code Ann.

§ 54.014(a) (Vernon 2008). APPOINTMENT OF THE RECEIVER

In their first issues on appeal, Fite and Woods argue that the trial court erred

in appointing Raymond as receiver because (1) no valid basis was established for

placing BEPA into receivership and (2) Raymond is disqualified from serving as a

receiver of BEPA. We examine each of these issues in turn.

Standard of Review

Because a receivership is an equitable remedy within the sound discretion of

the court, an appointment of a receiver will not be disturbed on appeal unless the

record reveals an abuse of discretion. Alert Synteks, Inc. v. Jerry Spencer, L.P. , 151

S.W.3d 246, 251 (Tex. App.—Tyler 2004, no pet.) (citing Abella v. Knight Oil Tools ,

945 S.W.2d 847, 849 (Tex. App.—Houston [1st Dist.] 1997, no writ). We will

reverse for abuse of discretion only when we conclude that the trial court acted in an

unreasonable or arbitrary manner. Id . (citing Downer v. Aquamarine Operators, Inc .,

701 S.W.2d 238, 242 (Tex. 1985)). A trial court abuses its discretion when it acts

without reference to guiding rules and principles. Downer v. Aquamarine Operators,

Inc ., 701 S.W.2d 238 , 241–42 (Tex. 1985). An abuse of discretion does not occur if

the trial court bases its decision on conflicting evidence. Davis v. Huey , 571 S.W.2d

859, 862 (Tex. 1978). If the decision was within the trial court’s discretionary

authority, we may not reverse simply because we might have reached a different

decision. Beaumont Bank, N.A. v. Buller , 806 S.W.2d 223, 226 (Tex. 1991); Downer ,

701 S.W.2d at 242 .

The remedy of receivership is an extraordinary remedy that must be cautiously

applied. It has been described as a drastic, far-reaching, and harsh remedy . See

Balias v. Balias, Inc ., 748 S.W.2d 253, 257 (Tex. App.—Houston [14th Dist.] 1988,

writ denied). Accordingly, a receiver will not be appointed if another remedy exists

at law or in equity that is adequate and complete. Tex. Bus. Corp. Act Ann .

art. 7.05, § A (Vernon Supp. 2003).

Statutory Basis for Receivership

Fite and Woods argue that Degioanni and Emtel have not established any

circumstances that could warrant placing BEPA back into receivership under the

Act. We disagree. Article 7.05 of the Act governs appointment of a rehabilitative

receiver “for the assets and business of a corporation.” Id . The Act provides that the

district court of the county where a corporation’s registered office is located may

appoint a receiver to conserve the assets and business of the corporation and to avoid

damage to the parties at interest, if all other requirements of law are complied with

and there are no other legal or equitable remedies available, including the

appointment of a receiver for specific corporate assets. Id. Article 7.05, section A

sets forth the preliminary prerequisites for appointment of the receiver:

A receiver may be appointed for the assets and business of a corporation

by the district court for the county in which the registered office of the

corporation is located, whenever circumstances exist deemed by the

court to require the appointment of a receiver to conserve the assets and

business of the corporation and to avoid damage to parties at interest,

but only if all other requirements of law are complied with and if all

other remedies available either at law or in equity, including the

appointment of a receiver for specific assets of the corporation, are

determined by the court to be inadequate . . . . Id .

Article 7.05, section A then lists the specific circumstances that may warrant

the appointment of a rehabilitative receivership.

In this case, the evidence in the record supports the trial court’s reappointment

of Raymond under Article 7.05, section (A)(1)(b) of the Act.

Under this provision,

the trial court may appoint a receiver in an action by a shareholder when it is

established that “the directors are deadlocked in the management of the corporate

affairs and the shareholders are unable to break the deadlock, and that irreparable

injury to the corporation is being suffered or is threatened by reason thereof.” See

Tex. Bus. Corp. Act. Ann . art. 7.05 § (A)(1)(b). The record reflects that the trial

court was well aware, through the proceedings, of the level of dysfunction of BEPA’s

Board of Directors that (1) prevented the directors and shareholders from lawfully

meeting and making decisions about BEPA’s affairs and (2) necessitated the creation

of the original receivership. The trial court also heard evidence from which it was

reasonable to conclude that, in the absence of a receivership, the directors and

shareholders could not meet to lawfully move forward in the conduct of BEPA’s

business and the lack of a receiver would cause irreparable damage to the corporation.

Raymond testified that, without a receiver in place, the board could not move forward

to manage BEPA’s principal asset, the ongoing litigation in the 334 th District Court

in Harris County. He testified that issues as fundamental as the identity and voting

authority of the directors and shareholders of BEPA are in dispute and that under

these circumstances any action to move the corporation’s business forward by the

directors and shareholders would spawn even more litigation between the parties.

Appellee’s Counsel:Okay. And the principal asset of BEPA is it

or is it not the litigation that is going on in the

334th?

Raymond: Correct.

Appellee’s Counsel : Why can’t—just in your view—just a board of

directors just handle that litigation?

Raymond: I can’t imagine someone standing in my shoes

without the protection of the receivership code in the

middle of this litigation. This is a very—this has

become a very hostile litigation. I don’t know what

that make up would be. I think there [are] disputes

as to who the shareholders are. I don’t know how

you can have a shareholders’ meeting when there

[are] disputes as to that. I think there are disputes as

to who the directors are. I can’t imagine what the

outcome would be if the shareholders elected a

BEPA board and the BEPA board appointed

Dr. Degioanni as the president of BEPA to carry

forward. I think there would be quite a bit of

litigation following that.

Nevertheless, Fite and Woods argue that the trial court erred in placing BEPA

into receivership because a receivership would jeopardize BEPA’s existing business

relationships and BEPA’s ongoing efforts to obtain new emergency room contracts.

However, contrary to their argument of the “stigma” attached to a receivership, the

court heard testimony from Raymond that BEPA has not lost any business contracts

and First Community Bank did not consider BEPA’s note in default during the course

of the original receivership. Likewise there is no evidence in the record that the lack

of new contracts during term of the original receivership was a result of the

receivership itself rather the contentious and public litigation involving the parties

and BEPA . Accordingly, we hold that the trial court did not err in rejecting this

argument against the appointment of a receiver.

Fite and Woods also argue that a receivership is unnecessary because there is

another remedy available to the court to insure the protection of BEPA’s interest in

the ongoing state litigation in 334 th District Court in Harris County. They argue that

BEPA can prosecute the litigation at the direction of management or through

shareholder derivative claims and that no basis exists for requiring BEPA to incur the

substantial expense of having a receiver oversee litigation on its behalf. In light of the

evidence presented regarding the past dysfunction of BEPA’s management and the

current disputes as to the identity and voting authority of the directors and

shareholders, we hold that the trial court did not err in rejecting this argument against

the appointment of a receiver. Accordingly, we hold that the trial court did not abuse

it discretion in placing BEPA in receivership under Article 7.05, section (A)(1)(b) of

the Act . RAYMOND’S QUALIFICATIONS AS RECEIVER In their third and fourth issues on appeal, Fite and Woods argue that even if the

trial court did not err in placing BEPA in receivership, Raymond is not qualified to

serve as the receiver of BEPA because (1) he is not a physician, (2) during the

original receivership he “abdicated” his receiver powers to Degioanni, an interested

party to this litigation and (3) during the original receivership he committed acts that

reflect that he is not a disinterested person to this lawsuit.

Raymond’s Status as a Non-Physician

Fite and Woods argue that Raymond is not qualified to serve as a receiver of

BEPA because he is not a licensed physician. They argue that the appointment of a

non-physician as receiver of BEPA, a professional association of physicians , violates

the corporate practice of medicine doctrine embodied in the Texas Medical Practice

Act and the mandates of the Texas Professional Associations Act (“TPAA”). Fite and

Woods argue these statutes require that only a licensed physician may serve as a

receiver for a professional association of physicians.

Under the “corporate practice of medicine” doctrine codified in the Texas

Medical Practice Act, the practice of medicine is restricted to licensed physicians.

See Tex. Occ. Code Ann. § 164.052(a)(17) (Vernon Supp. 2008). Specifically, the

doctrine prohibits a corporation comprised of lay persons, which employs licensed

physicians to treat patients, from receiving a fee. Gupta v. Eastern Idaho Tumor Inst.,

Inc. , 140 S.W.3d 747, 752 (Tex. App.—Houston [14th Dist.] 2004, pet. denied).

“The purpose of [the prohibition on the corporate practice of medicine] is to preserve

the vitally important doctor-patient relationship and prevent possible abuses resulting

from lay control of corporations employing licensed physicians to practice medicine.”

Gupta , 140 S.W.3d at 752 .

The TPAA allows for physicians to practice together through a limited liability

entity without violating the Medical Practice Act’s prohibition against the corporate

practice of medicine. Specifically, the TPAA provides that “all members of an

association shall be licensed to perform the type of professional service for which the

association is formed.” See Tex. Rev. Civ. Stat. Ann . art. 1528f, § 2(B) (Vernon

Supp. 2008) . The TPAA also requires that all officers and members of the Board of

Directors or Executive Committee [of a professional association] shall be members

of the professional association.” Id. , § 9(c) .

Neither the Medical Practice Act or the TPAA provide a blanket prohibition

on the appointment of a non-physician as the receiver of a professional association

of physicians. The Medical Practice Act and the TPAA do not even mention

receiverships. While the TPAA provides the requirements for the officers and

members of the board of directors of a functional association, it does not purport to

mandate the qualifications, powers, and duties of a receiver of the association

appointed under the Texas Business Corporations Act.

Furthermore, we hold that Raymond’s appointment does not violate the

corporate practice of medicine doctrine embodied in the Medical Practices Act or the

TPAA. In its appointment order, the trial court authorized Raymond, as the receiver,

to take control of only the business operations of the association. He is neither

directed nor empowered to take any steps involving the dispensing of medical

services. The court has not authorized Raymond to employ personnel to perform

medical services or receive an income for those services. The court heard testimony

that Raymond understands that the court’s order only empowers him to oversee the

business operations of BEPA and that matters concerning the practice of medicine,

such as the filing of regulatory statements with the appropriate state medical

authorities, are handled by Degioanni, a licensed physician and the president of

BEPA.

Accordingly we hold that the trial court did not err in appointing Raymond,

a non-physician, as the receiver of BEPA.

Degioanni’s Role in BEPA under the Original Receivership

Fite and Woods also argue that the court erred in finding that Raymond was

qualified to serve as a receiver because, under the original receivership order, he

unlawfully “abdicated his receivership authority” to Degioanni, who Fite and Woods

allege has engaged in “egregious breaches of fiduciary duty to BEPA.” However,

there is evidence in the record contradicting these allegations that the trial court could

have reasonably considered in favor of Raymond’s appointment. The court’s order

itself was evidence that Raymond never “abdicated” his authority to Degioanni. As

noted above, the appointment order empowered Raymond to take charge of only the

business operations of BEPA, not matters pertaining to the provision of medical

services. These matters remained subject to the control of Degioanni as a licensed

physician and the president of BEPA. Furthermore, Raymond testified that after

investigation, he concluded that Degioanni had not engaged in the wrongful conduct

alleged by Fite and Woods. Accordingly, we hold that the trial court did not abuse its

discretion in appointing Raymond despite the allegations concerning Raymond’s

abdication of his authority to Degioanni.

Raymond’s Conduct under the Original Receivership

Fite and Woods also assert that, under the original receivership, Raymond

engaged in the following acts that establish that he is not a disinterested person to this

lawsuit and that disqualify him from serving as BEPA’s receiver: (1) purporting to

redeem Woods’ and Fite’s BEPA stock in an effort to deprive them of standing to

pursue claims on BEPA’s behalf, (2) attempting to settle the derivative claims asserted

by Fite and Woods on inadequate investigation and for inadequate consideration, (3)

accepting as part of the Allocation Agreement, a contingent interest in the claims he

has asserted on BEPA’s behalf, thereby creating an incentive to pursue the litigation

of those claims even if it threatens other business or claims of BEPA, and (4) moving

the trial court to extend his own receivership. Nevertheless, there is evidence in the

record contradicting these allegations that the trial court could have reasonably

considered as credible and in favor of Raymond’s appointment.

The record reflects that Raymond has served as a receiver in the Harris County

courts for about 17 years. Prior to his appointment in this case, Raymond served as the

receiver of a hospital for two and one-half years. At the time of the hearing for his

reappointment, Raymond had spent over 1000 hours reviewing BEPA’s records and

running its business operations as the receiver. D uring Raymond’s tenure as receiver,

despite the ongoing hostilities between the parties, BEPA has remained an ongoing

concern, has not lost any existing contracts, and the bank has not declared it in default

of its loan. Although Fite and Woods allege that the purported buyback of their stock

in BEPA was for wrongful purposes, the court heard contradictory testimony that the

purchase offers were in accordance with BEPA’s bylaws and the receivership order

and there was no evidence before the trial court that the amount offered was not

reasonably supported by Raymond’s research.

With respect to Fite and Woods’ allegations of impropriety regarding the

negotiation of various settlement agreements, Raymond testified as to research he did

to satisfy himself that the settlement with Degioanni and Emtel was reasonable and for

adequate consideration, and that Degioanni had not participated in the wrongful

conduct alleged by Fite and Woods. While Fite and Woods fault Raymond for not

reviewing any of Emtel’s corporate records during this process, Raymond testified that

it was his understanding that he did not have the authority under the receivership order

to access these records. Raymond also testified that his review of Emtel’s records was

not necessary because his careful inspection of BEPA’s corporate records was

sufficient to allow him to determine if there had been any unlawful transfers between

BEPA and Emtel. Fite and Woods also criticize Raymond for not reading the report

of their own expert, Warren Cole, regarding his investigation into the finances of

BEPA and Emtel before entering into the settlement agreements. However, the trial

court heard testimony from Cole that this was only a preliminary report, subject to

revision.

Raymond testified that, pursuant to the warranty in the agreement, if Cole’s

report ultimately established any misconduct by Degioanni unknown to Raymond at

the time of settlement, Raymond would be entitled to pursue claims for that conduct

against Degioanni.

With respect to Fite’s and Woods’ allegations regarding the Allocation

Agreement, Raymond testified regarding the research that he performed leading up to

this agreement. The record reflects that Fite and Woods simply disagree with

Raymond’s conclusions. While Fite and Woods also argue that Raymond’s fee

arrangement from the Allocation Agreement demonstrates his interest in the outcome

of this litigation, the record does not reflect that Raymond’s actions violated the terms

of the receivership order, and the ultimate method of payment and amount of

Raymond’s fee is subject to the trial court’s review and approval. Finally, we hold that

it was not unreasonable for the trial court to reject Fite’s and Woods’ argument that

a receiver’s actions to extend the receivership so that he could complete the tasks

entrusted to him disqualifies him from continuing to serve as a receiver. In light of the

conflicting evidence before the trial court, we hold that the trial court did not abuse

its discretion in finding that Raymond was qualified to serve as the receiver of BEPA.

THE BOND PROVISIONS OF THE REAPPOINTMENT ORDER

In their fifth issue on appeal, Fite and Woods argue that the receivership order

is per se invalid because the trial court did not require Degioanni and Emtel, the

parties requesting appointment of a receiver, to post an appropriate bond.

Additionally, in their sixth issue on appeal, Fite and Woods argue that the $500 bond

posted by the receiver is “impermissibly low.”

A court may not appoint a receiver until two bonds have been filed. Both the

party applying for a receivership and the receiver must file a bond with the clerk of the

court payable to the defendant in an amount fixed by the court. See Tex. R. Civ.

P . 695a; Ahmad v. Ahmed , 199 S.W.3d 573, 575 (Tex. App.—Houston [1st Dist.]

2006, no pet.) (mandating the bond to be filed by the applicant); Tex. Civ. Prac. &

Rem. Code Ann . § 64.023 (Vernon 2008) (mandating the bond to filed by the

receiver) . The purpose of these bonds is to ensure that the defendant can be

reimbursed for any damages caused by the appointment of the receiver in the event

that the receiver was wrongfully appointed. Id . These bonds are a prerequisite to the

appointment of a receiver, and the trial court’s failure to require that both of the bonds

be filed necessitates reversal of the order appointing the receiver. Ahmad v. Ahmed ,

199 S.W.3d at 575 . The filing of a bond by the receiver will not satisfy the bond

requirement for the applicant. Id.

Applicant’s Bond

Fite and Woods have waived any issue on appeal regarding the trial court’s

failure to require an applicant’s bond. P ursuant to Rule 33.1(a) of the Texas Rules of

Appellate Procedure, as a prerequisite to presenting a complaint for appellate review,

the record must show that the complaint was made to the trial court by a timely

request, objection, or motion that “stated the grounds for the ruling that the

complaining party sought from the trial court with sufficient specificity to make the

trial court aware of the complaint, unless the specific grounds were apparent from the

context.” Tex. R. App. P . 33.1(a)(1)(A).

Here, upon review of the record, and especially in light of the fact that Fite did

not object to absence of an applicant’s bond in the original receivership order, we hold

that Fite’s objection before the trial court to the entry of the receivership order was not

stated with sufficient specificity to put the trial court on notice that she was

complaining of the lack of an applicant’s bond rather than the lack or inadequacy of

the receiver’s bond in the order. Consequently, Fite and Woods have not properly

preserved this complaint for appellate review. Id.

Receiver’s Bond

Finally, Fite and Woods argue that that the $500 bond posted by Raymond as

the receiver is impermissibly low and is insufficient “to protect a going concern such

as BEPA.” However, this is exactly the same amount that they agreed was sufficient

under the original receivership and they presented no facts before the trial court as to

what circumstances had changed warranting a greater bond. Accordingly, we hold

that the trial court did not abuse its discretion in setting the receiver’s bond amount.

CONCLUSION

We affirm the order of the trial court.

George C. Hanks, Jr.

Justice

Panel consists of Justices Taft, Hanks, and Higley.