Phillipe Herve and Christine Herve v. Federal Home Loan Mortgage Corporation ( 2014 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-13-00607-CV
Phillipe Herve and Christine Herve, Appellants
v.
Federal Home Loan Mortgage Corporation, Appellee
FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY,
NO. C-1-CV-13-004776, HONORABLE J. DAVID PHILLIPS, JUDGE PRESIDING
MEMORANDUM OPINION
Appellants Phillipe Herve and Christine Herve appeal from the trial court’s judgment
in a forcible-detainer suit awarding Federal Home Loan Mortgage Corporation possession of certain
residential real property. The Herves contend that the trial court lacked jurisdiction over the suit and
that the suit is barred by limitations. We will affirm the trial court’s judgment.
BACKGROUND
In 2007, the Herves executed a note to purchase the property at issue. The note was
secured with a deed of trust granting a first lien on the property. After the Herves defaulted on the
note, the property was purchased by Federal Home Loan at a nonjudicial foreclosure sale conducted
by a substitute trustee on August 3, 2010. Federal Home Loan then sent written notice to the Herves,
informing them of the purchase and instructing them to vacate the property. The notice also informed
the Herves that, if they failed to vacate, Federal Home Loan would file a forcible-detainer action.
In March 2013, after the Herves refused to vacate the property, Federal Home Loan
brought a forcible-detainer action in justice court. The justice court granted possession of the property
to Federal Home Loan, and the Herves appealed the justice court’s decision to the county court at
law. See Tex. R. Civ. P. 506.3. At the de novo bench trial in county court, the Herves argued that
Federal Home Loan’s forcible-detainer suit was barred by the applicable statute of limitations.
Rejecting this argument, the trial court rendered judgment that Federal Home Loan was entitled to
possession. This appeal followed.
DISCUSSION
The forcible-detainer action was created by the legislature as a speedy, simple, and
inexpensive procedure for obtaining immediate possession of property when there is no unlawful
entry. Williams v. Bank of N.Y. Mellon, 315 S.W.3d 925, 926 (Tex. App.—Dallas 2010, no pet.);
see Tex. Prop. Code § 24.002. To prevail in the action, “a plaintiff is not required to prove title,
but is only required to show sufficient evidence of ownership to demonstrate a superior right to
immediate possession.” Rice v. Pinney, 51 S.W.3d 705, 709 (Tex. App.—Dallas 2001, no pet.);
see Tex. R. Civ. P. 510.3(e) (“The court must adjudicate the right to actual possession [in eviction
cases] and not title.”). To establish forcible detainer, Federal Home Loan had to prove that (1) it is
the owner of the property, (2) the Herves are tenants at will or by sufferance, (3) Federal Home Loan
has made written demand for possession of the property in accordance with section 24.005 of
the Texas Property Code, and (4) the Herves refused to surrender possession. See Tex. Prop. Code
§§ 24.002, .005.
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The evidence admitted at trial included the deed of trust, the substitute trustee’s
deed conveying the property to Federal Home Loan, and the notice of eviction to the Herves. The
substitute trustee’s deed showed that Federal Home Loan purchased the Property at a nonjudicial
foreclosure sale under the terms of the deed of trust. The deed of trust stated:
If the Property is sold pursuant to this paragraph [setting forth nonjudicial foreclosure
procedures], Borrower or any person holding possession of the Property through
Borrower shall immediately surrender possession of the Property to the purchaser at
the sale. If possession is not surrendered, Borrower or such person shall be a tenant
at sufferance and may be removed by writ of possession.
Thus, the deed of trust established that the Herves became tenants-at-sufferance when they refused
to surrender the property following the nonjudicial foreclosure sale. Finally, the notice of eviction
informed the Herves that Federal Home Loan had purchased the property, that their tenancies were
being terminated, and that they were required to vacate the property. This evidence was sufficient
to establish Federal Home Loan’s right to immediate possession of the property. See Schlichting v.
Lehman Bros. Bank FSB, 346 S.W.3d 196, 198 (Tex. App.—Dallas 2011, pet. dism’d) (considering
similar evidence); see also Bierwirth v. Federal Nat’l Mortg. Ass’n, No. 03-13-00076-CV, 2014 WL
902541, at *2 (Tex. App.—Austin Mar. 6, 2014, no pet.) (mem. op.) (same); Jaimes v. Federal Nat’l
Mortg. Ass’n, No. 03-13-00290-CV, 2013 WL 7809741, at *2 (Tex. App.—Austin Dec. 4, 2013, no
pet.) (mem. op) (same).
In their first issue on appeal, the Herves argue that Federal Home Loan failed to
present evidence that the foreclosure sale was conducted on behalf of an entity that had been validly
assigned the deed of trust. The Herves contend that this unresolved issue of title demonstrates that
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Federal Home Loan lacked standing to bring the forcible-detainer suit and deprived the justice court
and county court of jurisdiction to adjudicate the action.
In cases involving deeds of trust containing landlord-tenant provisions almost identical
to the one presented in this case, this Court has rejected the argument that a party seeking forcible
detainer must establish a chain of title between the original lender and the substitute trustee’s deed.
See Wilder v. Citicorp Trust Bank, F.S.B., No. 03-13-00324-CV, 2014 WL 1207979, at *2 (Tex.
App.—Austin Mar. 18, 2014, pet. filed) (mem. op.); Jaimes, 2013 WL 7809741, at *3-4; see also
Stephens v. Federal Home Mortg. Corp., No. 02-10-00251-CV, 2011 WL 1532384, at *2 (Tex.
App.—Fort Worth Apr. 21, 2011, no pet.) (mem. op.) (holding that Fannie Mae was not required to
“connect the dots” between original lender and mortgage servicer in forcible-detainer action where
tenant-at-sufferance relationship established under deed of trust). Instead, we “[have] consistently
held that defects in the foreclosure process cannot be used either to negate a landlord-tenant
relationship provision in a deed of trust or to raise a question of title depriving the justice or county
courts of jurisdiction to resolve the question of immediate possession.” Wilder, 2014 WL 1207979,
at *2 (citing recent cases from this Court); see also Campbell v. Wells Fargo Bank, N.A., No. 03-
12-00007-CV, 2013 WL 6805590, at *2-3 (Tex. App.—Austin Dec. 20, 2013, no pet.) (mem. op)
(explaining that it was not necessary to resolve title dispute to determine right to immediate
possession because deed of trust created landlord and tenant-at-sufferance relationship).
While the Herves may challenge Federal Home Loan’s chain of title in a separate
suit, their claim that the foreclosure sale is invalid does not deprive the trial court of jurisdiction or
negate the landlord and tenant-at-sufferance relationship otherwise established under the deed of
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trust. See Wilder, 2014 WL 1207979, at *2 (rejecting argument that “the existence of a title dispute
arising from issues about the authority and capacity of the parties to the nonjudicial foreclosure sale”
deprived trial court of jurisdiction to decide forcible detainer). “Where, as here, a foreclosure under
a deed of trust establishes a landlord and tenant-at-sufferance relationship between the parties, there
is an independent basis to determine the issue of immediate possession without resolving the issue
of title to the property.” Bierwirth, 2014 WL 902541, at *3 (quoting Schlichting, 346 S.W.3d at
199). Because the trial court had the authority to adjudicate Federal Home Loan’s forcible-detainer
suit, we overrule the Herves’ first issue on appeal.
In their second issue on appeal, the Herves argue that the trial court erred in failing
to conclude that Federal Home Loan’s suit for forcible detainer was barred by limitations. Section
16.003 of the Texas Civil Practice and Remedies Code provides that a forcible-detainer suit must
be brought not later than two years after the day the cause of action accrues. Tex. Civ. Prac. & Rem.
Code § 16.003(a). The Herves contend that any cause of action for forcible detainer accrued on
August 3, 2010, when the property was purchased by Federal Home Loan at the nonjudicial
foreclosure sale. Thus, according to the Herves, the applicable statute of limitations had long expired
when Federal Home Loan filed its suit in justice court in March 2013.
In response, Federal Home Loan does not dispute that its suit for forcible detainer
is governed by a two-year statute of limitations. In addition, it does not dispute that more than
two years lapsed between its purchasing of the property and its filing suit. Instead, Federal Home
Loan argues that the statute of limitations did not begin to run until it demanded, and was refused,
possession of the property. According to Federal Home Loan, the Herves failed to establish their
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affirmative defense of limitations because the undisputed evidence shows that Federal Home Loan
filed suit for forcible detainer less than a month after the Herves refused to vacate the property.
When a cause of action accrues is normally a question of law. Exxon Corp. v.
Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 2011). “Causes of action accrue and statutes
of limitations begin to run when facts come into existence that authorize a claimant to seek relief.”
Id. A purchasing party at a foreclosure sale acquires the right to possess the property. See Coinmach
Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 918 (Tex. 2013). However, the new owner’s
ability to recover possession of the property through a forcible-detainer action does not arise—and
therefore, the statute of limitations does not begin to run—until possession has been demanded
and refused. Jones v. American Fed. Bank, F.S.B., No. 05-91-00634-CV, 1992 WL 32961, at *2
(Tex. App.—Dallas Jan. 30, 1992, writ dism’d w.o.j.) (not designated for publication).
Here, the undisputed evidence shows that on March 19, 2013, Federal Home Loan
notified the Herves that it had acquired the property at foreclosure. Federal Home Loan also instructed
the Herves to vacate, which they refused to do. Later that same month, Federal Home Loan filed its
forcible detainer suit in the justice court. Based on the record before us, the Herves have failed to
establish that Federal Home Loan’s forcible-detainer suit is barred by limitations. Consequently, we
cannot conclude that the trial court erred in failing to dismiss the suit on this ground. We overrule
the Herves’ second issue on appeal.
Having overruled all of the Herves’ issues on appeal, we affirm the trial court’s
judgment.
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__________________________________________
Scott K. Field, Justice
Before Justices Puryear, Goodwin, and Field
Affirmed
Filed: October 24, 2014
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