Christina Owens v. John Hawkins, Janel Sue Skrabanek, Jack Paul Moore, William Richard Moore, and Bruce A. Skrabanek ( 2012 )

IN THE
TENTH COURT OF APPEALS
No. 10-11-00297-CV
CHRISTINA OWENS,
Appellant
v.
JOHN HAWKINS, JANEL SUE SKRABANEK,
JACK PAUL MOORE, WILLIAM RICHARD
MOORE, AND BRUCE A. SKRABANEK,
Appellees
From the 21st District Court
Burleson County, Texas
Trial Court No. 25,890
MEMORANDUM OPINION
Christina Owens appeals from the trial court’s order granting a no-evidence
motion for summary judgment filed by John Hawkins, 1 Janel Sue Skrabanek, Jack Paul
Moore, William Richard Moore, and Bruce A. Skrabanek.2 Because the trial court did
not err in granting the motion for summary judgment, we affirm the trial court’s order.
1 John died the day the suit was filed in the underlying case.
2 Future references to these parties as a group will be to the Hawkins parties.
BACKGROUND
The parties to this proceeding are all related. Christina Owens is John Hawkins’
daughter. The other appellees are Owens’ niece, Janel, Owens’ nephew, Jack Paul,
Owens’ brother-in-law, William, and Owens’ nephew-in-law, Bruce. John owned 42
acres of land, a tractor and other farm equipment, and some cattle. John gave his
tractor, farm equipment, and cattle to Bruce in 1997. In 1999, Owens obtained a
judgment against John and Owens’ sister, Sue Moore. That judgment was reversed in
part and affirmed in part by the First Court of Appeals in Houston. Hawkins v. Owens,
No. 01-09-00918-CV, 2000 Tex. App. LEXIS 5667 (Tex. App.—Houston [1st Dist.] Aug.
24, 2000, pet. denied) (not designated for publication). In October of 2001, John divided
his 42 acres into 4 tracts and gave one to Janel, one to Jack Paul, one to William, and one
to Bruce. After filing a writ of execution in 2009, Owens filed a lawsuit against the
Hawkins parties for fraudulent transfer of the acreage and the tractor, farm equipment,
and cattle pursuant to the Texas Uniform Fraudulent Transfer Act. The Hawkins
parties filed a no-evidence motion for summary judgment which was granted by the
trial court.
In one issue, Owens contends the trial court erred in granting the Hawkins
parties’ no-evidence motion for summary judgment because there was a genuine issue
of material fact regarding whether John’s real and personal property were assets subject
to the Texas Uniform Fraudulent Transfer Act.
Owens v. Hawkins Page 2
NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT STANDARD
After an adequate time for discovery has passed, a party without the burden of
proof at trial may move for summary judgment on the ground that the nonmoving
party lacks supporting evidence for one or more essential elements of its claim. See TEX.
R. CIV. P. 166a(i); Espalin v. Children's Med. Ctr. of Dallas, 27 S.W.3d 675, 682-83 (Tex.
App.—Dallas 2000, no pet.). The granting of a no-evidence motion will be sustained
when the evidence offered by the non-movant to prove a vital fact is no more than a
mere scintilla. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). A
scintilla of evidence exists when the evidence is "so weak as to do no more than create a
mere surmise or suspicion" of a fact, and the legal effect is that there is no evidence.
Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983).
FRAUDULENT TRANSFER ACT
The Texas Uniform Fraudulent Transfer Act provides remedies to creditors of
debtors who fraudulently transfer assets under certain circumstances, as set out in the
statute. See TEX. BUS. & COM. CODE ANN. §§ 24.005-.006, 24.008 (West 2009); see also
Goebel v. Brandley, 174 S.W.3d 359, 362 (Tex. App.—Houston [14th Dist.] 2005, pet.
denied). As it pertains to this case, a transfer made by a debtor is fraudulent as to a
present or future creditor if the transfer was made with actual intent to hinder, delay, or
defraud any creditor of the debtor. TEX. BUS. & COM. CODE ANN. § 24.005(a) (West
2009). A "transfer" is defined as any means of "disposing of or parting with an asset or
Owens v. Hawkins Page 3
an interest in an asset, and includes payment of money . . . and creation of a lien or
other encumbrance." Id. § 24.002(12) (West 2009). As further defined by the statute, an
"asset" is "property of a debtor," but excludes "property to the extent it is generally
exempt under nonbankruptcy law[.]” Id. § 24.002(2)(B). The judgment creditor has the
burden to prove the fraudulent transfer by a preponderance of the evidence. G.M.
Houser, Inc. v. Rodgers, 204 S.W.3d 836, 842 (Tex. App.—Dallas 2006, no pet.). This
includes the burden to prove the “transfer” of an “asset.” See Van Slyke v. Teel Holdings,
LLC, No. 01-08-00600-CV, 2010 Tex. App. LEXIS 5551, *11 (Tex. App.—Houston [1st
Dist.] July 15, 2010, no pet.) (mem. op.).
The Hawkins parties filed a no-evidence motion for summary judgment
asserting that the real property and personal property alleged to be fraudulently
transferred were not “assets” as defined by the statute. Although they were not
required to, the Hawkins parties submitted evidence that the real property, the 42 acres,
was John’s rural homestead, and thus, not an asset. See TEX. CONST. ART. VXI, § 51; TEX.
PROP. CODE ANN. § 41.002 (West 2000). Generally, a homestead is exempt from forced
sale by general creditors. TEX. CONST. ART. XVI, § 50. The Hawkins parties further
argued that the tractor, farm equipment, and cattle were not assets because a single
person’s personal property is exempt from garnishment, attachment, execution, or other
seizure if it is of an aggregate fair market value of not more than $30,000. TEX. PROP.
CODE ANN. §§ 42.001(a)(2); 42.002 (West Supp. 2011; West 2000).
Owens v. Hawkins Page 4
In Owens’ response to the no-evidence motion for summary judgment, she
alleged that a cabin on John’s property was rented out at times to her and to others. She
also claimed that the cabin was “owned” by either Sue Moore or William Moore,
Owens’ sister and brother-in-law. Owens also claimed that John allowed William to
start building a house on a portion of the property. Owens attached voluminous
evidence to her response, which included a complete deposition of Sue, the complete
trial testimony of an eviction proceeding brought by Sue against Owens, and the
testimony of John and of Owens’ two children from a trial which resulted in a judgment
against John and Sue, allegedly in support of these allegations. She then asserted that
this evidence created a fact issue that John abandoned his property as a homestead.
Thus, as her argument continued, the property lost its exempt status and became an
asset subject to the Act.
Abandonment
Once property has been dedicated as homestead, it can only lose such
designation by abandonment, alienation, or death. Ramsey v. Davis, 261 S.W.3d 811, 817
(Tex. App.—Dallas 2008, pet. denied); Wilcox v. Marriott, 103 S.W.3d 469, 472 (Tex.
App.—San Antonio 2003, pet. denied); Garrard v. Henderson, 209 S.W.2d 225, 230 (Tex.
Civ. App.—Dallas 1948, no writ). Abandonment of a homestead requires both the
cessation or discontinuance of use of the property as a homestead coupled with the
intent to permanently abandon the homestead. Franklin v. Woods, 598 S.W.2d 946, 949
Owens v. Hawkins Page 5
(Tex. Civ. App.—Corpus Christi 1980, no pet.). On appeal, citing an opinion from the
Fifth Circuit, Owens contends that by “permanently” renting a portion of his
homestead property to others, John abandoned that portion of his property for
homestead purposes. See Perry v. Dearing, 345 F.3d 303 (5th Cir. 2003).
In Perry, however, the issue was whether the bankruptcy court erred in ruling
that the bankruptcy petitioner forfeited the homestead character of a 26 acre tract and a
59 acre tract by operating a business on the property. Perry, 345 F.3d at 319. That is not
the question in this appeal. Then, in determining that the bankruptcy court erred, the
Fifth Circuit proposed a question to the bankruptcy court on remand; that is, what the
impact that the operation of a mobile home and RV park, specifically, had upon the
status of a claimed rural homestead. Id. at 318. It then observed that significant case
law existed in Texas indicating that one who rents a section of his property
continuously to others, abandons that portion of his property for purposes of the
homestead laws. Id. It is this observation upon which Owens appears to be relying to
support her argument. But, the Fifth Circuit also noted that renting property does not
always abandon it for purposes of the homestead laws and acknowledged that the
Texas Constitution and the Texas Property Code protect the homestead status of
property that is only temporarily rented. Id. at 319; TEX. CONST. ART. XVI, § 51; TEX.
PROP. CODE ANN. § 41.003 (West 2000).
Owens v. Hawkins Page 6
The cases cited by the Perry opinion regarding the abandonment of a homestead
by the continuous rental of a portion of it predate the adoption of article XVI, section 51
of the Texas Constitution and the enactment of section 41.003 of the Texas Property
Code. Even if those cases remain the law in Texas, Owens presented the trial court with
no evidence that John rented the cabin continuously. Further, she presented the trial
court with no evidence that John ceased or discontinued his of use of the property as a
homestead which was coupled with an intent to permanently abandon it. See Franklin v.
Woods, 598 S.W.2d 946, 949 (Tex. Civ. App.—Corpus Christi 1980, no pet.). At most,
Owens presented the trial court with evidence that John temporarily rented a portion of
his homestead property which does not change the homestead exemption. TEX. CONST.
ART. XVI, § 51; TEX. PROP. CODE ANN. § 41.003 (West 2000). This is no evidence that John
abandoned his homestead.
Owens also claims on appeal that John abandoned his homestead exemption by
allowing William to build a house on another portion of the property and by allowing
William and Bruce to operate an agricultural operation on the entire 42 acres. Owens
cites to no case authority in support of her argument. Accordingly, this portion of her
issue is inadequately briefed and presents nothing for review. TEX. R. APP. P. 38.1(i).
Lastly, Owens argues that Exhibit A-3 attached to the Hawkins parties’ Third
Amended Motion for Summary Judgment creates a fact issue as to the exempt status of
the property because, her argument continues, in that Exhibit, at least half of the
Owens v. Hawkins Page 7
property is designated as non-homestead. Again, Owens cites to no case authority in
support of her argument. This portion of her issue is inadequately briefed and presents
nothing for review.3 TEX. R. APP. P. 38.1(i).
Thus, the evidence attached by Owens to her response creates, at most, only a
mere surmise or suspicion that John abandoned his homestead exemption and is no
evidence that the real property transferred by John was an asset not generally exempt
by non-bankruptcy law and subject to the Fraudulent Transfer Act. See TEX. BUS. &
COM. CODE ANN. §24.002(2)(B) (West 2009).
Personal Property
As for the tractor, related farm equipment, and cattle, Owens only asserted in her
response and on appeal that the Hawkins parties did not prove the property was
valued at less than $30,000. It was not the Hawkins parties’ burden to prove the
property was exempt. Rather, it was Owens burden to prove that it was an asset
because it was not exempt. See G.M. Houser, Inc. v. Rodgers, 204 S.W.3d 836, 842 (Tex.
App.—Dallas 2006, no pet.); Van Slyke v. Teel Holdings, LLC, No. 01-08-00600-CV, 2010
Tex. App. LEXIS 5551, *11 (Tex. App.—Houston [1st Dist.] July 15, 2010, no pet.) (mem.
op.). Thus, Owens presented no evidence that the personal property was an asset
subject to the Fraudulent Transfer Act.
3We have also reviewed the document in question and cannot determine the basis of the claim made by
Owens.
Owens v. Hawkins Page 8
CONCLUSION
Because Owens presented no evidence that the real and personal property
transferred were “assets,” the trial court did not err in granting the Hawkins parties’ no-
evidence motion for summary judgment. Owen’s issue is overruled.
Accordingly, the trial court’s order is affirmed.
TOM GRAY
Chief Justice
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
Affirmed
Opinion delivered and filed April 18, 2012
[CV06]
Owens v. Hawkins Page 9