Ayiba Queendalyn Chinyere & Suleman Nelson Ilodigwe and All Other Occupants of 13523 Bonilla Lane, Houston Texas 77083 v. Wells Fargo Bank , 2012 Tex. App. LEXIS 5678 ( 2012 )

Opinion issued July 12, 2012
In The
Court of Appeals
For The
First District of Texas
NO. 01-11-00304-CV
AYIBA QUEENDALYN CHINYERE, SULEMAN NELSON ILODIGWE
AND ALL OTHER OCCUPANTS OF 13523 BONILLA LANE, HOUSTON,
TEXAS 77083, Appellant
V.
WELLS FARGO BANK, N.A., Appellee
On Appeal from the County Civil Court at Law No. 4
Harris County, Texas
Trial Court Case No. 985918
OPINION
This is an appeal from a county court judgment in favor of plaintiff-appellee,
Wells Fargo Bank, N.A., in a forcible-detainer action. We vacate the judgment
and dismiss the case for lack of jurisdiction.
BACKGROUND
The underlying proceedings
Following its December 7, 2010 purchase of the home at 13523 Bonilla
Lane at a non-judicial foreclosure sale, Wells Fargo filed a forcible-detainer action
in justice court in February 2011 seeking to evict defendants-appellants Ayiba
Queendalyn Chinyere, Suleman Nelson Ilodigwe, and any other occupants of the
Bonilla property (collectively, appellants). Wells Fargo was awarded possession
of the Bonilla property in that proceeding, and appellants appealed to county court
of law. The county court held a de novo bench trial, and again awarded Wells
Fargo possession of the Bonilla property. It is from that judgment that appellants
appeal.
Other proceedings
On September 7, 2010—before the forcible-detainer proceedings were
instituted by Wells Fargo in justice court—appellants had filed suit in state district
court to avoid foreclosure. They later amended that suit to request that the
foreclosure be set aside. On December 16, 2010, Wells Fargo removed that
lawsuit to federal district court, where it remained pending at the time of the
underlying justice and county court proceedings.
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ISSUES ON APPEAL
Appellants challenge the county court’s judgment in two issues:
(1) “Whether the trial court erred in denying Appellants’ motion to abate,” and
(2) Whether the trial court abused its discretion by allowing Wells Fargo’s attorney
to testify at trial without calling any witness.”
MOTION TO ABATE
Before the trial in county court, appellants filed a verified motion to abate
the proceedings pending resolution of the federal district court case. In that
abatement motion, appellants allege that “the parties are litigating this same
dispute in federal court.” According to appellants, the “case in federal court is
intertwined with the current eviction suit,” in that “Defendants are contending that
Wells Fargo Bank, N.A. is not the owner of the note and deed of trust for which it
foreclosed on Defendant’s property” and that “they did not receive adequate notice
of the foreclosure sale.”
Before trial, the county court denied the motion:
THE COURT: Okay. Ready for trial? I see a motion to abate which
should have been set on a motion docket, but I’ll tell you, I won’t abate this
pending federal court. I’ve got to move my docket, and federal judges do
what they want to do. It can be on my docket. They can’t determine
possession anyway.
[DEFENDANTS’ COUNSEL]: I did file injunctive relief over there
also.
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THE COURT: From what? They can’t enjoin me. That was before all
this. They can’t enjoin me because they don’t have jurisdiction over
possession.
[DEFENDANTS’ COUNSEL]: I know, but the two cases are
intertwined actually.
THE COURT: I don’t think, you know, I don’t think you'll find any
case law that tells me that I have to abate in deference to — you know it
would be like abating in deference to district court. Fight them. Ultimately,
the only issue we’re here today on is who has the superior right to
possession. So I’m not going to abate. I don’t abate for district courts. I
don’t abate for federal courts because they can take years. I don’t have years
to do that.
[DEFENDANTS’ COUNSEL]: The other issue we have, Your Honor,
is that, if this case is not abated and is tried on the merits and, you know, you
move — you rule for Wells Fargo, then my case in federal court becomes
moot.
THE COURT: No, it doesn’t.
[DEFENDANTS’ COUNSEL] Well, Your Honor, if —
(Discussion off the record).
THE COURT: Your motion to abate is denied. We’re ready for trial
today.
Parties’ arguments
Appellants argue that, while generally “a forcible-detainer action is intended
to provide a speedy, summary, and inexpensive determination of the right to
immediate possession of real property,” such proceedings are inappropriate in a
foreclosure, rather than landlord-tenant, context. This is because, according to
appellants, the issues are generally more complicated in a foreclosure proceeding,
and the lender should not benefit from the piecemeal adjudication of possession
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issues before title issues are resolved. Here, appellants contend, the title dispute
and possession issue are so intertwined that the justice and county courts should be
stripped of jurisdiction to hear the case. See Dormady v. Dinero Land & Cattle,
Co., 61 S.W.3d 555, 557 (Tex. App.—San Antonio 2001, pet. dism’d w.o.j.) (“[I]f
the question of title is so intertwined with the issue of possession, then possession
may not be adjudicated without first determining title.”)
In response, Wells Fargo contends that the county court properly denied the
motion to abate. It points out that a “justice court or county court at law is not
deprived of jurisdiction merely by the existence of a title dispute, but is deprived of
jurisdiction only if ‘the right of immediate possession necessarily requires the
resolution of a title dispute.’” See Rice v. Pinney, 51 S.W.3d 705, 713 (Tex.
App.—Dallas 2001, no pet.). Wells Fargo also contends that a forcible-detainer
action is not exclusive, but cumulative of other remedies, id. at 708, and that the
Texas Supreme Court has recognized that the legislature contemplated concurrent
actions in the district and justice courts to resolve issues of title and immediate
possession, respectively. See Scott v. Hewitt, 90 S.W.2d 816, 818–19 (Tex. 1936).
According to Wells Fargo, “Appellant’s mere allegation that a lawsuit is pending
in federal court in which they contest the foreclosure sale and assert that they did
not receive foreclosure notices, without more, does not provide a basis for the court
to withhold ruling on the issue of immediate possession.”
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Applicable Law
Justice of the peace courts and, on appeal, county courts, have jurisdiction of
forcible-detainer suits. TEX. PROP. CODE ANN. § 24.004 (Vernon Supp. 2011); TEX.
R. CIV. P. 749. The sole issue in a forcible-detainer action is which party has the
right to immediate possession of the property. Dormady, 61 S.W.3d at 557 “[T]he
merits of the title shall not be adjudicated.” TEX. R. CIV. P. 746. Accordingly, to
prevail in a forcible-detainer action, the plaintiff need not prove title but merely
present sufficient evidence of ownership to demonstrate a superior right to
immediate possession. Dormady, 61 S.W.3d at 557 (citing Goggins v. Leo, 849
S.W.2d 373, 377 (Tex. App.—Houston [14th Dist.] 1993, no writ)).
Courts have recognized that a question of title may be so intertwined with
the issue of possession so as to preclude adjudication of the right to possession
without first determining title. In such cases, neither the justice court nor the
county court on appeal, has jurisdiction.1 Dormady, 61 S.W.3d at 557–58;
Mitchell v. Armstrong Capital Corp., 911 S.W.2d 169, 171 (Tex. App.—Houston
[1st Dist.] 1995, writ denied). Whether such subject-matter jurisdiction exists “is a
question of law, subject to de novo review.” Black v. Washington Mut. Bank, 318
S.W.3d 414, 416 (Tex. App.—Houston [1st Dist.] 2010, pet. dism’d w.o.j.).
1
A justice court may not adjudicate title to land. TEX. GOV’T CODE
ANN. § 27.031(b)(4) (Vernon Supp 2011).
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Subject-matter jurisdiction can be raised at any time, including for the first time on
appeal. Id.
Analysis
Whether an existing title dispute in another court deprives the justice and
county courts of jurisdiction to adjudicate possession in forcible-detainer actions
generally turns on whether there is a basis—independent of the claimed right to
title—for the plaintiff’s claim of superior possession rights in the property.
In Mitchell v. Armstrong Capital Corp., we held that a pending title dispute
in state district court deprived the justice courts, county courts, and our Court of
jurisdiction over a claimed right of possession flowing from rights as the purchaser
at a foreclosure sale. 911 S.W.2d at 169. In that case, title to the property owner’s
home was burdened with a Builder’s and Mechanic’s Lien Contract securing
payment on a promissory note to Armstrong Capital Corporation for repairs. Id. at
170. After the property owner defaulted, Armstrong Capital requested enforcement
of the lien and it purchased the property at the resulting substitute trustee’s sale.
Id. After the property owner refused a demand to vacate, Armstrong Capital filed
a forcible-detainer action. Id. Among other defenses, the property owners asserted
that the lower courts, and this Court, lacked jurisdiction because they had
requested abatement of the forcible-detainer action pending the outcome of a
lawsuit they filed in state district court seeking to set aside the foreclosure. Id. at
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170–71. We agreed, explaining that “[b]ecause a ‘title issue’ was involved in the
courts below, they had no subject matter jurisdiction over the case.” Id. at 170.
In contrast, just last year in Morris v. American Home Mortgage Servicing,
we addressed jurisdictional arguments identical to those made by appellants in
Mitchell, but held that the justice court, county court, and this Court did have
jurisdiction. 360 S.W.3d 32, 35 (Tex. App.—Houston [1st Dist.] 2011, no pet.).
There we noted that, unlike in Mitchell, “the original deed of trust contained
language establishing a landlord-tenant relationship between the borrower and the
purchaser.” Id. We concluded this was a dispositive difference because it
provided a basis to resolve rights to possession without resolving the ultimate title
dispute.
The existence of a landlord-tenant relationship provides a basis for the
court to determine the right to immediate possession without resolving
the question of title. See Villalon [v. Bank One], 176 S.W.3d [66,] 71
[(Tex. App.—Houston [1st Dist.] 2004, no pet.]. When, however, the
right to possession depends upon the resolution of a question of title,
neither the justice court nor the county court has jurisdiction. Mitchell
v. Armstrong Capital Corp., 911 S.W.2d 169, 171 (Tex. App.—
Houston [1st Dist.] 1995, writ denied).
....
Because the plaintiff in a forcible detainer action is only required to
demonstrate a superior right to immediate possession, the county court
can determine possession without quieting title if the deed establishes
a landlord-tenant relationship between the borrower and the purchaser
of the property at the foreclosure sale. See Villalon, 176 S.W.3d at 71;
Rice v. Pinney, 51 S.W.3d 705, 712–13 (Tex. App.—Dallas 2001, no
pet.). At the hearing, AHMS introduced the substitute trustee's deed,
showing that Wells Fargo was the successor in interest to Option One
Mortgage Corporation, and that it, through its servicing agent, AHMS
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had purchased the property at the foreclosure sale. Evidence presented
in the county court also established that the original deed of trust
contained language establishing a landlord-tenant relationship
between the borrower and the purchaser. AHMS also introduced the
notice to vacate, which named it as the successor in interest, as a
servicing agent, to Option One Mortgage Corporation. Because the
evidence in the county court showed that AHMS was the service
agent for Wells Fargo, and there was a landlord tenant-relationship
between Morris and Wells Fargo, the county court could determine
possession without quieting title. Accordingly, we hold that the justice
and county courts were not deprived of subject-matter jurisdiction.
Morris, 360 S.W.3d at 34–35; see also Yarto & DTRJ Invs., L.P. v. Gilliland, 287
S.W.3d 83, 89 (Tex. App.—Corpus Christi 2009, no pet.) (“In most situations, the
parties in a forcible detainer suit are in a landlord-tenant relationship. One
indication that a justice court, and a county court on appeal, is called on to
adjudicate title to real estate in a forcible detainer case—and, thus exceed its
jurisdiction—is when a landlord-tenant relationship is lacking.”).
Courts have consistently followed or distinguished Mitchell on the same
basis. Compare Yarto, 287 S.W.3d at 89–90 (concluding justice court lacked
subject-matter jurisdiction in forcible-detainer action because determining who had
a superior right of possession required immediate resolution of title dispute) and
Hopes v. Buckeye Ret. Co., LLC, No. 13-07-00058-CV, 2009 WL 866794, at *5
(Tex. App.—Corpus Christi, Apr. 2, 2009, no pet.) (“Without a landlord-tenant
relationship or other basis independent of the Community Improvements contract,
the justice court could not determine the issue of immediate possession without
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determining ownership of the property.”), with Bruce v. Fed. Nat’l Mortg. Ass’n,
352 S.W.3d 891, 893–94 (Tex. App.—Dallas 2011, pet. denied) (agreeing that
“title determination was not required to determine the right to possession because
the landlord-tenant relationship [found within the deed] provided an independent
basis for possession” such that justice court had jurisdiction over forcible-detainer
claim); Elwell v. Countywide Home Loans, Inc., 267 S.W.3d 566, 569 (Tex.
App.—Dallas 2008, pet. dism’d w.o.j.) (holding justice and county courts had
jurisdiction in forcible-detainer action because deed of trust rendered appellant a
“tenant at sufferance,” giving rise to landlord-tenant relationship between parties
and, thus, “it was not necessary for the trial court to determine whether the
foreclosure was valid before awarding possession to Countrywide”); Rice, 51
S.W.3d at 709–10 (holding justice and county courts had jurisdiction in forcible-
detainer action because deed of trust established a landlord and tenant-at-
sufferance relationship, which, unlike in Mitchell, provided an “independent basis
on which the trial court could determine the issue of immediate possession without
resolving the issue of title to the property”); Dormady, 61 S.W.3d at 559 (holding
justice and county courts had jurisdiction in forcible-detainer action, observing that
the situation in Mitchell was “not the situation in this case where a landlord-tenant
relationship is established in the original deed of trust” that “provides a basis for
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determining the right to immediate possession without resolving the ultimate issue
of title to the property.”)
We have examined both the Deed of Trust and the Substitute Trustee’s Deed
in the underlying dispute and neither one contains language creating a landlord-
tenant relationship. Moreover, Wells Fargo has not argued that there is any basis
for its claimed possession rights other than the title rights it gained through the
disputed foreclosure. Thus, in this case—unlike the Morris, Bruce, Elwell, Rice
and Dormady cases cited above—there is no independent basis aside from Wells
Fargo’s claim that it has superior title rights. Rather, like in Mitchell, Yarto, and
Hopes, Wells Fargo’s claim to possession in the underlying proceedings rests
solely on its claim to title. Accordingly, the lower courts “had no subject matter
jurisdiction over the case.” Mitchell, 911 S.W.2d at 171. We sustain appellant’s
first issue.
CONCLUSION
Given our resolution of appellant’s first issue, we need not address his
second issue. We vacate the lower courts’ judgments and dismiss the case. TEX.
R. APP. P. 43.2(e).
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Sherry Radack
Chief Justice
Panel consists of Chief Justice Radack and Justices Jennings and Keyes.
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