County Investment, LP v. Royal West Investment, LLC, Series E and Shawn Shabazi ( 2015 )

ACCEPTED
14-15-00207-CV
FOURTEENTH COURT OF APPEALS
HOUSTON, TEXAS
7/6/2015 3:38:48 PM
CHRISTOPHER PRINE
CLERK
NO. 14-15-00207-CV
FILED IN
14th COURT OF APPEALS
IN THE COURT OF APPEALS HOUSTON, TEXAS
FOR THE FOURTEENTH DISTRICT 7/6/2015 3:38:48 PM
AT HOUSTON, TEXAS CHRISTOPHER A. PRINE
Clerk
COUNTY INVESTMENT, LP,
Appellant,
v.
ROYAL WEST INVESTMENT, LLC, SERIES E AND SHAWN SHABAZI,
Appellee
Original Proceeding Arising Out of the
189th Judicial District Court, Harris County, Texas
Cause No. 2014-34978
Honorable Bill Burke
BRIEF OF APPELLANT
Jeremy D. Saenz
State Bar No. 24033028
jsaenz@wsdllp.com
Jason T. Wagner
State Bar No. 00795704
jwagner@wsdllp.com
1010 Lamar, Suite 425
Houston, Texas 77002
Telephone: (713) 554-8450
Facsimile: (713) 554-8451
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Parties To The Trial Court’s Judgment:
Plaintiff: County Investment, LP
Defendants: Royal West Investment, LLC, Series E and Shawn Shahbazi
The Names and Addresses of Trial and Appellate Counsel for County Investment,
LP
Attorney of Record at Trial and on Appeal:
Jeremy D. Saenz
Wagner Saenz Dority, LLP
1010 Lamar, Suite 425
Houston, Texas 77002
The Names and Addresses of Trial and Appellate Counsel for Royal West
Investments, LLC, Series E and Shawn Shahbazi
Attorney of Record at Trial and on Appeal:
Robert G. Miller
O’Donnell, Ferebee & Frazer, P.C.
450 Gears Road, Suite 800
Houston, Texas 77067
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Brief of Appellant Page ii
TABLE OF CONTENTS
Identity of Parties and Counsel ................................................................................. ii
Table of Contents ..................................................................................................... iii
Index of Authorities .................................................................................................. v
Statement of Case ................................................................................................... vii
Statement Regarding Oral Argument ..................................................................... vii
Issues Presented ..................................................................................................... viii
Statement of Facts..................................................................................................... 1
Summary of the Arguments ...................................................................................... 5
Arguments................................................................................................................. 6
I. Standard of Review ........................................................................................ 6
II. An Absolute Privilege Does Not Apply In This Case .................................... 7
A. The Lis Pendens was Filed Against a Property
Owned by a Person That was Not Part of Any Judicial Proceeding .... 7
B. The Lis Pendens Affected Real Property Collaterally,
not Directly, and does not come within the
Provisions of Texas Property Code Section 12.007 ........................... 10
i. The Lis Pendens was Void Ab Initio .............................................. 10
ii. The Remedies Available in Texas Property Code
Section 12.0071 and Section 12.008 are not Required, Nor
are they Feasible in Purchase Transactions ................................... 13
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Brief of Appellant Page iii
C. The Notice of Lis Pendens is a Court Record and
Governed by Civil Practice and Remedies Code Section 12.002 ...... 14
D. The Question of Fraud Should Go to the Jury ................................... 16
III. Holding that an Absolute Privilege Applies Even When
the Affected Party or Property is Not Involved or
Even a Part of a Judicial Proceeding Will Have a Deleterious Effect.......... 16
IV. Conclusion and Prayer .................................................................................. 18
Certificate of Compliance ....................................................................................... 19
Certificate of Service .............................................................................................. 19
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Brief of Appellant Page iv
INDEX OF AUTHORITIES
Statutes and Rules
TEX. CIV. PRAC. & REM. CODE § 12.002..................................................... 14, 15, 17
TEX. PROP. CODE § 12.007 .............................................................. 10, 11, 12, 13, 15
TEX. PROP. CODE § 12.0071 ........................................................................ 13, 14, 17
TEX. PROP. CODE § 12.008 .................................................................... 12, 13, 14, 17
TEX. R. CIV. PROC. 76a(2)(a) .................................................................................. 14
TEX. R. CIV. PROC. 166a(c) ....................................................................................... 6
Cases
Bayou Terrace Inv. Corp. v. Lyles,
881 S.W.2d 810 (Tex. App.—Houston [1st Dist.] 1994, no writ) ...................... 9
Cullins v. Foster,
171 S.W.3d 521, 530 (Tex.App.-Houston [14th Dist] 2005, pet. denied) .......... 6
Duke v. Power Electric and Hardware Co.,
674 S.W.2d 400 (Tex. App.—Corpus Christi 1984, no writ)............................ 16
Griffin v. Rowden,
702 S.W.2d 692 (Tex. App.—Dallas 1985, writ ref’d n.r.e.) .............................. 9
Helmsley-Spear of Texas, Inc. v. Blanton,
699 S.W.2d 643, 645 (Tex. App.—Houston [14th Dist.] 1985, no writ) 11, 12, 13
Kropp v. Prather,
526 S.W.2d 283 (Tex. Civ. App.—Tyler 1975, writ ref’d n.r.e.) ........................ 9
Moss v. Tennant,
722 S.W.2d 762 (Tex. App.—Houston [14th Dist.]
1986, no writ) ............................................................................ 10, 11, 12, 13, 15
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Brief of Appellant Page v
Nixon v. Mr. Prop. Management Co.,
690 S.W.2d 546, 549 (Tex.1985) ........................................................................ 6
Olbrich v. Touchy,
780 S.W.2d 6 (Tex. App.—Houston [14th Dist.] 1989, no writ) ....................... 12
Prappas v. Meyerland Comm. Improvement Ass’n.,
795 S.W.2d 794 (Tex. App.—Houston [14th Dist.] 1990, writ denied) .... 7, 9, 15
Provident Life & Accident Ins. Co. v. Knott,
128 S.W.3d 211, 215-16 (Tex. 2003) ................................................................. 6
Sci. Spectrum, Inc. v. Martinez,
941 S.W.2d 910, 911 (Tex.1997) ........................................................................ 6
Valence Operating Co. v. Dorsett,
164 S.W.3d 656, 661 (Tex. 2005) ....................................................................... 6
Virginia Indonesia Co. v. Harris County Appraisal Dist.,
910 S.W.2d 905, 907 (Tex.1995) ........................................................................ 6
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Brief of Appellant Page vi
STATEMENT OF THE CASE
On June 17, 2014, County Investment, LP (“Appellant” or “County
Investment”) filed a lawsuit for violations of Chapter 12 of the Texas Civil Practice
and Remedies Code for a fraudulent lien or claim filed against real property,
tortious interference with a contract, and slander of title against Appellees Royal
West Investment, LLC, Series E, and Shawn Shahbazi (“Appellee Royal West,”
“Appellee Shahbazi,” or collectively “Appellees”) (C.R. 6). On October 2, 2014,
Appellees filed a Motion for Summary Judgment on County Investment’s claims
arguing that County Investment was not entitled to relief because its causes of
action were barred by the defense of Absolute Privilege (C.R. 18-19). Appellee’s
Motion for Summary Judgment was granted on December 5, 2014 (C.R. 106).
County Investment’s Motion for Reconsideration and Motion for New Trial were
denied as a matter of law on February 18, 2015. Appellant filed a Notice of
Appeal on March 4, 2015 (C.R. 135).
STATEMENT REGARDING ORAL ARGUMENT
Appellant requests oral argument because it believes it will aid the Court in
its decision process.
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Brief of Appellant Page vii
ISSUES PRESENTED
I. The trial court erred in holding that the filing of a lis pendens, even on a
collateral property unrelated to any pending litigation, is protected by an
absolute privilege in the due course of a judicial proceeding.
II. The trial court erred in holding that the fraudulent filing of a lis pendens
under Civil Practice and Remedies Code 12.002 is protected by an
absolute privilege in the due course of a judicial proceeding.
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Brief of Appellant Page viii
NO. 14-15-00207-CV
In the Court of Appeals for the 14th
District of Texas at Houston, Texas
COUNTY INVESTMENT, LP,
Appellant,
v.
ROYAL WEST INVESTMENT, LLC, SERIES E AND SHAWN SHABAZI,
Appellee
BRIEF OF APPELLANT
TO THE HONORABLE JUSTICES OF THE COURT OF APPEALS:
COUNTY INVESTMENT, LP, (hereinafter “County Investment”), submits
this brief in appeal of the trial court’s summary judgment rendered in favor of
Royal West Investment, LLC, Series E and Shawn Shabazi (hereinafter Appellee
Royal West, Appellee Shahbazi, and Appellees collectively).
STATEMENT OF FACTS
County Investment is a Texas Limited Partnership (C.R. 4). Appellee Royal
West is a Delaware Limited Liability Company and is purported to be authorized
to do business in Texas and Appellee Shahbazi is an individual and sole member of
Royal West Investment, LLC, Series E (C.R. 4). Appellees were involved in
entirely unrelated litigation in Tarrant County involving Appellees, U.S. Capital
Investments, LLC (“USCI”) and Massood Pajooh, but not County Investment.
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Brief of Appellant Page 1
(C.R. 12, 22-36). Neither USCI nor Massood Pajooh are named parties in the
present lawsuit, and neither are owners of the property concerning this lawsuit.
(C.R. 4-9, 56-57).
On or about April 9, 2013, County Investment entered into a Real Estate
Purchase Agreement (“Purchase Agreement”) with a bona fide purchaser for the
sale of eight (8) acres out of a nine point six two seven (9.627) acre tract in
Reserve N3, of Northborough Section Three (3), in Houston, Harris County, Texas
(C.R. 5). The property, identified by the Harris County Appraisal District by
Number 114-586-000-0021 (“Property”) was owned by County Investment (C.R.
56). According to the terms of the Purchase Agreement, the purchaser was to pay
County Investment Nine Hundred Fifty-Six Thousand and no/100 dollars
($956,000.00) for the Property (C.R. 5). Escrow was thereafter opened with
Stewart Title Company Id.
On or about April 23, 2013, Stewart Title issued a Commitment for Title
Insurance on the Property (C.R. 5). In Schedule C of the Title Commitment
(which is the section listing those items that will be excluded from the policy
unless resolved prior to closing), Stewart Title noted the following:
10. The Company requires a satisfactory dismissal with
prejudice of that suit styled U.S. Capital Investments,
LLC v. Shawn Shahbazi, et al under Cause No. 096-
244268-10 in the 96th Judicial District Court of Tarrant
County, Texas and release of that lis pendens recorded
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Brief of Appellant Page 2
in/under County Clerk’s File No. 20130021834 of Real
Property Records of Harris County, Texas (C.R. 6).
County Investment was not a party to the lawsuit that Appellees used for the
basis of their lis pendens, and was not listed on the face of the lis pendens (C.R.
39). Appellee Shahbazi acknowledged that fact in his deposition:
Q. Was that case in Fort Worth against County Investment, LP?
A. I don’t think so.
Q. Okay.
A. No.
Q. No.
A. No. No.
(C.R. 120-121). On or about April 27, 2013, County Investment, through its
representative, contacted Appellee Shahbazi regarding the lis pendens (C.R. 130-
131). Appellee Shahbazi acknowledged receipt of correspondence stating
“basically he’s telling me to release that lis pendens, the property he’s trying to
sell” (C.R. 125-126). On or about May 7, 2013, County Investment’s attorney
contacted Appellee Shahbazi’s attorney, attaching a Release of Lis Pendens for
execution (C.R. 132).
Despite the notices being sent to Appellees directly and through their
counsel, the lis pendens was not removed and on or about June 7, 2013, the
Purchase Agreement was cancelled (C.R. 131). As a result, Plaintiff lost out on
$956,000.00 (C.R. 88-89).
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Brief of Appellant Page 3
On or about April 4, 2014, nearly a year after the Appellees were notified of
the existence of the wrongfully filed lis pendens, Defendant, through their attorney,
released the lis pendens (C.R. 90-91).
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Brief of Appellant Page 4
SUMMARY OF THE ARGUMENTS
The appellate record conclusively establishes that County Investment was
not a party in any judicial proceedings at the time that the lis pendens was filed on
its property. Applying an absolute privilege to protect Appellee that knew at the
time that the lis pendens was fraudulent, creates a deleterious bar to justice.
Furthermore, applying the privilege in an absolute fashion has the unforeseen
effect of allowing a lis pendens to be used as a sword to inhibit property
transactions throughout the State of Texas while simultaneously hiding behind a
shield of absolute privilege. If any party is involved in any type of judicial
proceeding, it can seek out a completely unrelated property, and on a whim, file a
lis pendens to interfere with the rights of whomever they desire, even parties with
no relation to any judicial proceeding. The remedy available to the affected party
(suit to remove a lis pendens) is wholly insufficient considering the relatively short
period between execution of a property transaction and closing, leaving the party
without any recourse.
Because an absolute privilege cannot and should not apply when the affected
party and property were not part of any judicial proceeding, and furthermore, when
the lis pendens itself was a fraudulent court filing, judgment in favor of Appellees
should be reversed and County Investment should be given the opportunity to
present its case to a jury.
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Brief of Appellant Page 5
ARGUMENTS
I. STANDARD OF REVIEW
A trial court’s summary judgment is reviewed de novo. Valence Operating
Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). A defendant who seeks a
traditional summary judgment under Rule 166a(c) must demonstrate that the
plaintiff has no cause of action as a matter of law. Provident Life & Accident Ins.
Co. v. Knott, 128 S.W.3d 211, 215–16 (Tex.2003); Cullins v. Foster, 171 S.W.3d
521, 530 (Tex.App.-Houston [14th Dist.] 2005, pet. denied). A traditional
summary judgment is proper when the defendant either negates at least one
element of each of the plaintiff's theories of recovery or pleads and conclusively
establishes each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez,
941 S.W.2d 910, 911 (Tex.1997); Cullins, 171 S.W.3d at 530. When the defendant
has carried its summary judgment burden, the burden shifts to the nonmovant to
raise a material fact issue precluding summary judgment. Virginia Indonesia Co. v.
Harris County Appraisal Dist., 910 S.W.2d 905, 907 (Tex.1995). In reviewing a
summary judgment, Courts are to take as true all evidence favorable to the
nonmovant, indulging every reasonable inference, and are to resolve any doubts in
the nonmovant's favor. Nixon v. Mr. Prop. Management Co., 690 S.W.2d 546, 549
(Tex.1985).
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Brief of Appellant Page 6
II. AN ABSOLUTE PRIVILEGE DOES NOT APPLY IN THIS CASE
A. The Lis Pendens was Filed Against a Property Owned by a Person
That Was Not Part of Any Judicial Proceeding.
The appellate record conclusively establishes that County Investment was
not a party in any judicial proceedings at the time that the lis pendens was filed on
its property (C.R. 39, 120-121).
County Investment does not contest the existence of a privilege for filing a
lis pendens when the filing of the lis pendens is part of a judicial proceeding
between the same parties. However, the privilege is not so broad and absolute as
to apply to a lis pendens on a property that is unrelated to any litigation, and in
which a legal action has not commenced affecting the property or its owner.
Despite assertions by Appellee to the contrary in its Motion for Summary
Judgment (C.R. 17-18), the facts in Prappas v. Meyerland Comm. Improvement
Ass’n., 795 S.W.2d 794 (Tex. App.—Houston [14th Dist.] 1990, writ denied) are
very different from the facts in the present matter. In Prappas, the parties were
involved in litigation with each other, and after judgment but during the pendency
of an appeal between all of the parties, Meyerland Community Improvement
Association filed a lis pendens to stop a sale by Prappas. Id. The Court in Prappas
found that the filing of the lis pendens was a part of a judicial proceeding, and
therefore the filing absolutely was privilege. Id.
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Brief of Appellant Page 7
The facts in the present case are distinguishable from the typical case where
an absolute privilege applies. County Investment and Appellees were not engaged
in any litigation or judicial proceedings with each other at the time of the filing of
the lis pendens (C.R. 39, 120-121). The only litigation involved Appellees and
parties that were neither part of this suit nor owners of the real property that was
encumbered (C.R. 4-9, 12, 22-36, 56-57). Appellees represented in the Notice of
Lis Pendens that the Property was part of the judicial proceeding described as
“Cause No. 096-244268-10, styled U.S. Capital Investments, LLC v. Shawn
Shahabazi, et. al.,” and was commenced in the 96th Judicial District Court of
Tarrant County, Texas” (C.R. 114). Appellees conceded the fact that County
Investment was not part of any judicial proceeding:
Q. At the time that you – that your attorney filed the lis pendens
against the property that affected the County Investment, LP,
were you involved in any lawsuit with County Investment, LP,
you or Royal West Investment, Series – LLC Series E?
A. No. I think you already asked me that. No. I didn’t.
(C.R. 127-128, 120-122). Despite this obvious and important fact, County
Investment was the subject of a fraudulently filed lis pendens, and suffered the
consequences by losing out on the sale of its property (C.R. 88-89, 131).
Furthermore, the records of the Harris County Appraisal District show that the
property in question has never been owned by either USCI or Massood Pajooh, so
there was not colorable argument to the filing (C.R. 93-95).
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Brief of Appellant Page 8
Like Prappas, the facts in Griffin v. Rowden, 702 S.W.2d 692 (Tex. App.—
Dallas 1985, writ ref’d, n.r.e.), Kropp v. Prather, 526 S.W.2d 283 (Tex. Civ.
App.—Tyler 1975, writ ref’d, n.r.e.), and Bayou Terrace Inv. Corp. v. Lyles, 881
S.W.2d 810 (Tex. App.—Houston [1st Dist.] 1994, no writ), cited by Appellees in
their Motion for Summary Judgment (C.R. 18), are also distinguishable from the
facts surrounding County Investment. In those cases, judicial proceedings between
parties led to the filing of lis pendens by one party against the property of another
involved in the judicial proceeding. See Prappas, Griffin, Kropp, and Bayou
Terrace cite above. As illustrated above, however, there was not a prior or existing
judicial proceeding involving County Investment and Appellees at the time that the
lis pendens was filed, and Appellees acknowledged that fact (C.R. 39, 120-122,
122-128).
Since the lis pendens case law in Texas deals with parties that are involved
in some type of judicial proceeding with each other, this is a case of first
impression. The distinguishing and deciding factor that makes this case unique is
that in this case the action was taken against a third party (and its wholly owned
property) that was not a party to any judicial proceeding, much less a judicial
proceeding with Appellees, yet County Investment was left without recourse.
(C.R. 39, 120-122, 122-128).
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Brief of Appellant Page 9
B. The Lis Pendens Affected Real Property Collaterally, not
Directly, and does not come within the provisions of Texas
Property Code Section 12.007.
i. The Lis Pendens was Void Ab Initio.
Appellees acknowledge that they filed a lis pendens against Plaintiff’s
property as a preemption to prevent the fraudulent transfer of Property (C.R. 13-
14). Despite not having evidence that USCI ever owned the property in question,
which it did not, Appellees moved forward with filing the lis pendens on a
collateral piece of property unrelated to any proceedings involving County
Investment (C.R. 39, 120-122, 122-128). Appellees’ actions were wholly
independent of the rights granted by Section 12.007 of the Texas Property Code
and according to governing case law, the lis pendens was void ab initio.
Consequently, since Appellee did not act in accordance with the statute, their
actions do not fall within any absolute privilege and they should be made to answer
for damages for the causes of actions as pleaded by County Investment.
In Moss v. Tennant, 722 S.W.2d 762 (Tex. App.—Houston [14th Dist.] 1986,
no writ), the Court ruled that a lis pendens was void. In that case, the Guises sold a
home on Bluebonnet Street in Houston to Hoffman, and then bought a house on
Nodaway Street in Spring. Hoffman later filed suit against the Guises, and then
amended to argue that the Guises purchased the Nodaway property with proceeds
of the sale of the Bluebonnet property. Hoffman then filed a notice of lis pendens
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Brief of Appellant Page 10
on the Nodaway property. The Nodaway property was later sold to the relators,
Douglas and Katherine Moss, who intervened and filed a motion to quash the
notice of lis pendens. Hoffman argued that the notice was valid and that the
Mosses had an adequate legal remedy under Texas Property Code Section 12.007.
The Court ruled that since the lis pendens was essentially a prayer for a judgment
lien and it affected real property collaterally, and not directly, it did not come
within the provisions of 12.007. Moss at 763. The Court stated:
Hoffman’s suit … does not seek recovery to the title to
relator’s property nor to establish an interest in the home
except as security for the recovery of any damages he
may be awarded against the Guises on his fraud
allegation and only to the extent he can trace the
proceeds from the Bluebonnet sale to the Nodaway
purchase. His pleading that a lien be imposed against the
Nodaway property is essentially a prayer for a judgment
lien, affects the property only collaterally, and does not
come within the provisions of §12.007.
The Court ruled that the lis pendens was void as a matter of law. Id.
In Helmsley-Spear of Texas, Inc. v. Blanton, 699 S.W.2d 643, 645 (Tex.
App.—Houston [14th Dist.] 1985, no writ), the Court reached a similar conclusion
to Moss stating that the plaintiff “pleading that a lien be imposed against the
property is essentially a prayer for a judgment lien to assure any monetary damages
which may be ultimately awarded are paid. The lien sought affects real property
collaterally, not directly, and does not come within the provisions of 12.007, …
accordingly the lis pendens is void.” Helmsley-Spear at 645. Because the Court
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Brief of Appellant Page 11
held that the lis pendens did not fall within the provisions of Section 12.007, then
the party did not have to utilize Section 12.008 to nullify, remove, or cancel the lis
pendens.
Similarly, in Olbrich v. Touchy, 780 S.W.2d 6 (Tex. App.—Houston [14th
Dist.] 1989, no writ), the Court analyzed the lis pendens statute in Texas Property
Code Section 12.007 and stated that the parties did not establish any of the
requirements in the statute, and as such the lis pendens was improper. In Olbrich,
the court noted that the claims in the property were unsupported by title, interest,
or encumbrance. As in Moss and Helmsley-Spear, the court noted that the targeted
property was only collateral. As such, there was no standing to employ the
restrictions of Section 12.007(a) and they had no right to bind the property with a
lis pendens. Olbrich at 8.
Moss, Helmsley-Spear, and Olbrich are all similar to the case at hand.
Appellees’ interest in the property was at most, purely collateral, and nothing more
than a “prayer for a judgment lien.” Appellees alleged to be trying to prevent a
fraudulent transfer without any real proof that the property was owned by the
defendants in their Tarrant County case (C.R. 13-14). As such, the lis pendens
was void ab initio as a matter of law, and Appellees are unable to take advantage
of the immunity provided for non-void lis pendens.
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Brief of Appellant Page 12
ii. The Remedies Available in Texas Property Code Section 12.0071 and
Section 12.008 are not Required, Nor are they Feasible in Purchase
Transactions.
Helmsley-Spear, discussed above, made it clear that when a lis pendens does
not fall within the provisions of Section 12.007, then the affected party does not
have to utilize Section 12.008 to nullify, remove, or cancel the lis pendens. Texas
Property Code Section 12.0071 was enacted in 2009 and enables a party to file a
motion to expunge a lis pendens. See Act of May 21, 2009, 81st Leg., R.S., ch.
297, 2009 Tex. Gen. Laws 806, 806 (codified at Tex. Prop. Code Ann. § 12.0071
(West 2013)). While it was enacted twenty-six years after the Helmsley-Spear
decision, it can be surmised that the result would be the same as Section 12.008,
and a party would not be required to utilize the remedy.
While County Investment was not required to pursue the remedies outlined
in Texas Property Code Sections 12.0071 and 12.008, the short duration of time,
the fraudulent nature of the lis pendens, and Appellees’ fraudulent representations,
nevertheless would have prevented such action. Upon being informed of the lis
pendens County Investment made multiple attempts at having Appellees remove
the lis pendens and Appellee Shahbazi even represented that he would have the lis
pendens removed (C.R. 125, 130-132). Furthermore, Section 12.0071 requires at
least a 20 day notice prior to a motion to expunge being heard, an infeasible short
duration when dealing with a property transaction, and when County Investment
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Brief of Appellant Page 13
was relying on Appellees representations that it would be removed. TEX. PROP.
CODE ANN. § 12.0071 (West 2013). Section 12.008 is equally infeasible in that it
implies a valid lis pendens and calls for adequate protection and the payment of
money or giving of an undertaking to the Court. TEX. PROP. CODE ANN. § 12.008
(West 2013).
C. The Notice of Lis Pendens is a Court Record and Governed by
Civil Practice and Remedies Code Section 12.002.
A Notice of Lis Pendens is governed by Section 12.002 of the Texas Civil
Practice and Remedies Code as a court record. TEX. CIV. PRAC. & REM. CODE
ANN. § 12.002 (West 2002). By its very nature, a Notice of Lis Pendens is a court
record. “Court Record” is defined for purposes of Texas Rule of Civil Procedure
76a as “all documents of any nature filed in connection with any matter before any
civil court …” See T.R.C.P. 76a (2)(a). Since the Notice of Lis Pendens was filed
in connection with a matter in Tarrant County (unrelated to County Investment), it
is a court record, and subject to the provisions in Civil Practice and Remedies Code
12.002 against fraudulent court records (C.R. 39, 120-122, 122-128). Appellees
had knowledge that the Notice of Lis Pendens was fraudulent when they filed it
(C.R. 39, 120-122, 122-128). Appellee Shahbazi represented that he was filing the
lis pendens with the purpose of causing problems for Mr. Massood Danesh
(representative of County Investment) (C.R. 129). Despite several attempts to get
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Brief of Appellant Page 14
Appellees to remove the lis pendens, they refused to do so (C.R. 130, 132).
Appellees should be answerable for their acts of fraud, and should not be allowed
to hide behind an immunity that does not apply on a collateral piece of property.
Based on governing case law, the lis pendens should be void ab initio. See Moss v.
Tennant, 722 S.W.2d 762 (Tex. App.—Houston [14th Dist.] 1986, no writ), stating
that the “pleading that a lien be imposed against the Nodaway property is
essentially a prayer for a judgment lien, affects the property only collaterally, and
does not come within the provisions of §12.007.”
Appellees note that the Texas courts have not yet ruled on the issue of
whether the judicial privilege applies to Texas Civil Practice and Remedies Code
Section 12.002(a) (C.R. 19-21). Appellees argue that the decisions in Prappas and
Lyles imply that the Court would rule that the privilege applies Id. As described
above, the arguments fail because the lis pendens was not filed as part of a judicial
proceeding involving County Investment (C.R. 39, 120-122, 122-128). The lis
pendens was filed on a collateral property not related to any judicial proceeding
and as such was not within the purview of Texas Property Code Section 12.007.
According to the cases cited above, the lis pendens was void. Since the lis pendens
is void, any claim for absolute privilege for a void act cannot exist. County
Investment should be allowed to proceed with its claim for damages based on a
fraudulent court filing. Furthermore, Appellants acted fraudulently by filing a lis
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Brief of Appellant Page 15
pendens on the property both knowing that Plaintiff was not a party to a lawsuit,
and without doing any investigation into the ownership of the properties in
question. (C.R. 80, 84-85). When notified to release the lis pendens, despite
knowledge that the lis pendens was wrongful, Appellees took zero action until over
a year later, costing County Investment the sale of its property (C.R. 88-90).
D. The Question of Fraud Should Go to the Jury
In Duke v. Power Electric and Hardware Co., 674 S.W.2d 400 (Tex. App.—
Corpus Christi 1984, no writ), the district court allowed a slander of title cause of
action (based on the allegedly wrongful filing of a lis pendens) to go to the jury.
The appellate court did not hold that the claim was barred by privilege; rather, it
analyzed the evidence in the record and affirmed the jury’s findings of no damages
for that cause of action. See Duke at 402. County Investment should get its day in
Court.
III. HOLDING THAT AN ABSOLUTE PRIVILEGE APPLIES EVEN WHEN THE
AFFECTED PARTY IS NOT INVOLVED OR EVEN A PART OF A JUDICIAL
PROCEEDING WILL HAVE A DELETERIOUS EFFECT.
If the Court upholds the trial court’s finding that an absolute privilege
applies, even when the affected property and its owner were not involved in a
judicial proceeding, then anyone involved in any judicial proceeding, as a lawyer
or a party, could maliciously file a lis pendens without limits or consequences. By
filing an eviction proceeding in Justice Court, a party would be free to file a lis
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Brief of Appellant Page 16
pendens on any property owned by anyone in the State of Texas. Undersigned
counsel, with several lawsuits on file, could theoretically file a lis pendens
affecting the property of every home in The Woodlands, inconveniencing,
delaying, and possibly costing every homeowner involved in a property transaction
the ability to swiftly sell their property. A homeowner, who wishes to prevent the
sale of her neighbors house in order to make the offer on her own house more
lucrative, could file a lis pendens to prevent a deal from taking place, and would be
absolutely immune from claims of tortious interference with a contract, slander to
title, and fraudulent court filings under Section 12.002 of the Texas Civil Practice
and Remedies Code.
The absolute right to file a lis pendens would allow a party to use the lis
pendens as a sword and effectively hamper any property transaction of their
choosing. While Texas Property Code 12.0071 provides a party with the right to
file a Motion to Expunge Lis Pendens, and 12.008 provides the right to move for
cancellation of a lis pendens, these remedies are useless when time is of the
essence (as it usually is) in the pending property transaction, and the absolute
privilege bars those affected from seeking any redress for their damages.
This absurd result is exactly what occurred in this case. County Investment,
without any involvement in a judicial proceeding, and without any property subject
to valid liens or claims, became encumbered by a lis pendens, effectively costing it
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Brief of Appellant Page 17
a sale worth $956,000.00 (C.R. 5). Simply because Appellees had a pending
lawsuit against a third party, they were granted an impenetrable shield to protect
them from their maliciously used sword. Such a finding is the opposite of justice
and was surely not envisioned when broadly applying an absolute privilege.
IV. CONCLUSION AND PRAYER
For the reasons set forth above, County Investment requests that this Court
reverse the granting of Appellees’ Motion for Summary Judgment due to the fact
that there is not an absolute privilege to filing a lis pendens when the affected
party, and its property, was not a part of a judicial proceeding.
Respectfully submitted,
By:/s/Jeremy Saenz___________________
Jeremy D. Saenz
State Bar No. 24033028
jsaenz@wsdllp.com
Jason T. Wagner
State Bar No. 00795704
jwagner@wsdllp.com
1010 Lamar, Suite 425
Houston, Texas 77002
Telephone: (713) 554-8450
Facsimile: (713) 554-8451
ATTORNEYS FOR APPELLANT
COUNTY INVESTMENT, LP
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Brief of Appellant Page 18
CERTIFICATE OF COMPLIANCE
I hereby certify that the foregoing Brief of Appellant, filed on July 6, 2015, was
prepared with Microsoft Word for Mac 2011 and that, according to that program’s
word-count function, the sections covered by Texas Rule of Appellate Procedure
9.4(i)(1) contain 3,923 words.
/s/Jeremy Saenz______________
Jeremy Saenz
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing Brief of Appellant
was served, pursuant to Texas Rules of Civil Procedure 21 and 21a, and Texas
Rule of Appellate Procedure 9.5, on the 6th day of July, 2015, via electronic mail,
to:
Robert G. Miller
450 Gears Road, Ste. 800
Houston, Texas 77067
Telephone: 281.875.8200
Facsimile: 281.875.4961
e-mail: miller@ofmflaw.com
(Attorney for Appellees)
/s/Jeremy Saenz________________
Jeremy Saenz
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Brief of Appellant Page 19