compass-bank-successor-in-interest-to-laredo-national-bank-s-lee ( 2011 )

NUMBER 13-10-00529-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
COMPASS BANK, SUCCESSOR-IN-INTEREST
TO LAREDO NATIONAL BANK, S. LEE STEVENSON JR.,
SUBSTITUTE TRUSTEE, AND DAVID L. RICKER,
SUBSTITUTE TRUSTEE,
Appellants,
v.
VICTOR HUGO BARRERA
AND DIANA BARRERA, Appellees.
On appeal from the 139th District Court
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Justices Garza, Benavides, and Vela
Memorandum Opinion by Justice Garza
In this accelerated interlocutory appeal, appellants Compass Bank, successor-in-
interest to Laredo National Bank, S. Lee Stevenson Jr., substitute trustee, and David L.
Ricker, substitute trustee, challenge the trial court’s granting of a temporary injunction
prohibiting appellants from enforcing a writ of possession against appellees, Victor
Hugo Barrera and Diana Barrera. By three issues, appellants argue that the trial court
erred because: (1) appellees offered no evidence in support of their request for an
injunction; (2) the injunction is an improper collateral attack on a final order of another
court; and (3) the injunction improperly changes the status quo. We reverse and
remand.
I. BACKGROUND
In October 2009, appellant Compass Bank (“Compass”) foreclosed on property
owned by the Barreras located in Mission, Texas.1 A “Notice of Substitute Trustee’s
Non-Judicial Foreclosure Sale,” signed only by appellant Stevenson, notified the
Barreras that a foreclosure sale would take place on October 6, 2009. On October 5,
2009, Victor Barrera filed suit against Compass and Stevenson in the 139th Judicial
District Court of Hidalgo County, Texas, seeking a temporary restraining order as well
as temporary and permanent injunctive relief.2 On the same day suit was filed, the trial
court granted the requested temporary restraining order enjoining Compass and
Stevenson from proceeding with the foreclosure sale.
On October 6, 2009, prior to the scheduled foreclosure sale, Barrera’s counsel
and a process server attempted to serve Stevenson with the temporary restraining order
at the Hidalgo County Courthouse. However, Stevenson was not present at the
1
It is not clear from the record when Compass obtained the note and deed of trust from its
predecessor-in-interest, Laredo National Bank.
2
Trial court cause number C-2798-09-C.
2
courthouse; instead, appellant Ricker conducted the foreclosure sale. According to
Barrera, the temporary restraining order was instead faxed to Stevenson at 10:35 a.m.
on October 6. Nevertheless, according to the Substitute Trustee’s Foreclosure Deed,
the foreclosure sale was completed at 10:39 a.m. that morning.
Meanwhile, an action for forcible entry and detainer was filed against the
Barreras in justice court.3 Compass and the Barreras entered into an Agreed
Judgment, approved and signed by the trial court on May 7, 2010, which allowed the
Barreras three months to vacate the property and allowed Compass to seek a writ of
possession if they did not. The Barreras did not vacate the property within the specified
time, so Compass obtained a writ of possession requiring the Barreras to leave on
September 2, 2010.
On September 1, 2010, the Barreras filed another suit in district court against
Compass, Stevenson, and Ricker,4 contending that: (1) the foreclosure sale was
improper because the Barreras were never notified that Ricker would be conducting the
foreclosure sale; and (2) the Substitute Trustee’s Foreclosure Deed is void because the
wrong party conducted the sale and because, contrary to the terms set forth in the
“Notice of Substitute Trustee’s Non-Judicial Foreclosure Sale,” the amount of the
successful bid was not at least equal to the amount of the Barreras’ debt secured by the
property. The Barreras’ suit alleged wrongful foreclosure and sought a temporary
restraining order, temporary and permanent injunctive relief, a declaration that the
3
Trial court cause number FD-062-10-31. A default judgment was originally entered in this case
against the Barreras on May 3, 2010, ordering the Barreras to vacate the subject property no later than
May 11, 2010. The default judgment was then superceded by the Agreed Judgment of May 7, 2010.
4
Trial court cause number C-2749-10-C.
3
Substitute Trustee’s Foreclosure Deed is null and void, and attorney’s fees. The
petition alleged specifically that:
Defendant COMPASS BANK has obtained a writ of possession pursuant
to a forcible detainer action . . . Cause No. FD-062-10-31 in the Justice
Court, Precinct 3, Place 1, Hidalgo County, Texas. However, Plaintiffs
have not yet been evicted from the property. Plaintiffs’ eviction is
scheduled for 10 a.m. on September 2, 2010. Plaintiff will be irreparably
harmed unless the Court intervenes to enjoin the eviction because the
loss of the unique real estate would leave Plaintiffs without possession of
their property and would be wrongful in that Defendants have acted in a
way to wrongfully and improperly foreclose upon the Plaintiffs’ property.
As Cause No. C-2798-09-C was pending at all times during the course of
the forcible detainer action in Cause No. FD-062-10-31, the issue of title
had been implicitly raised by the Plaintiffs and therefore the Justice Court
lacked jurisdiction to enter the judgment in the forcible detained action.
The trial court granted the temporary restraining order and, after a hearing on
September 14, 2010, granted the requested temporary injunction. The order granting
the temporary injunction states in part that:
The Court, after hearing the argument and evidence and taking judicial
notice of the affidavit and sworn pleadings on file, concludes that Plaintiffs
have a probable right and a probable remedy, in that Plaintiffs will suffer
irreparable injury in that Plaintiffs will be evicted from and lose possession
of their home based upon a substitute trustee’s sale that was conducted
by someone other than the person designated to conduct the sale . . . .
This accelerated interlocutory appeal followed.5 See TEX. CIV. PRAC. & REM.
CODE ANN. § 51.014(a)(4) (Vernon 2008) (allowing appeals from interlocutory orders
granting or refusing a temporary injunction); TEX. R. APP. P. 28.1(a) (providing that
appeals of interlocutory orders, when allowed as of right by statute, are accelerated).
II. STANDARD OF REVIEW AND APPLICABLE LAW
The purpose of a temporary injunction is to preserve the status quo of the
litigation’s subject matter pending a trial on the merits. Butnaru v. Ford Motor Co., 84
5
The Barreras have not filed an appellees’ brief to assist us in the resolution of this matter.
4
S.W.3d 198, 204 (Tex. 2002). A temporary injunction is an extraordinary remedy and
does not issue as a matter of right. Id. (citing Walling v. Metcalfe, 863 S.W.2d 56, 57
(Tex. 1993)). A temporary injunction will issue only if the applicant pleads and proves
three specific elements: (1) a cause of action against the defendant; (2) a probable
right to the relief sought; and (3) a probable, imminent, and irreparable injury in the
interim. Id. (citing Walling, 863 S.W.2d at 57; Sun Oil Co. v. Whitaker, 424 S.W.2d 216,
218 (Tex. 1968)). An injury is irreparable if the injured party cannot be adequately
compensated in damages or if the damages cannot be measured by any certain
pecuniary standard. Id. (citing Canteen Corp. v. Republic of Tex. Props., Inc., 773
S.W.2d 398, 401 (Tex. App.–Dallas 1989, no writ)).
Whether to grant or deny a temporary injunction is within the trial court’s sound
discretion. Id. (citing Walling, 863 S.W.2d at 58; State v. Walker, 679 S.W.2d 484, 485
(Tex. 1984)). We will reverse an order granting injunctive relief only if the trial court
abused that discretion. Id. (citing Walling, 863 S.W.2d at 58; Walker, 679 S.W.2d at
485). We may not substitute our judgment for that of the trial court unless the trial
court’s action was “so arbitrary that it exceeded the bounds of reasonable discretion.”
Id. (citing Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 918 (Tex. 1985); Davis
v. Huey, 571 S.W.2d 859, 861-62 (Tex. 1978)).
III. ANALYSIS
By their first issue, appellants contend that there was insufficient evidence
supporting the trial court’s issuance of the temporary injunction. Under an abuse of
discretion standard, legal and factual sufficiency are ordinarily not independent grounds
of error, but are relevant factors in assessing whether the trial court abused its
5
discretion. Zorilla v. Wahid, 83 S.W.3d 247, 252 (Tex. App.–Corpus Christi 2002, no
pet.); Dalworth Trucking Co. v. Bulen, 924 S.W.2d 728, 738 n.7 (Tex. App.–Texarkana
1996, no pet.). However, in the context of a request for temporary injunctive relief, a
probable right to recovery and probable injury must be established by competent
evidence adduced at a hearing. Millwrights Local Union No. 2484 v. Rust Eng’g Co.,
433 S.W.2d 683, 686 (Tex. 1968); see also McDaniel v. Connelly, No. 13-08-00230-CV,
2008 Tex. App. LEXIS 5119, at *2 (Tex. App.–Corpus Christi July 7, 2008, pet. denied)
(mem. op.). Nearly a half century ago, the Texas Supreme Court explained why
competent evidence is required to support a request for temporary injunction:
An applicant for a temporary injunction seeks extraordinary equitable
relief. He seeks to immobilize the defendant from a course of conduct
which it may well be his legal right to pursue. Crowded dockets,
infrequent jury trial weeks, or trial tactics can often delay a trial of a case
on its merits for many months. The applicant has, and in equity and good
conscience ought to have, the burden of offering some evidence which,
under applicable rules of law, establishes a probable right of recovery. If
not, no purpose is served by the provisions of Rule 680, [Texas Rules of
Civil Procedure], limiting the time for which a restraining order granted
without a hearing can operate and requiring a hearing before a temporary
injunction can issue. If he cannot or does not discharge his burden he is
not entitled to extraordinary relief. Writs of injunction should not issue on
mere surmise.
Camp v. Shannon, 162 Tex. 515, 519, 348 S.W.2d 517, 519 (1961).
The facts alleged in the Barreras’ September 1, 2010 original petition were sworn
to by Victor Barrera; however, a sworn petition does not constitute evidence. Millwrights
Local Union No. 2484, 433 S.W.2d at 686; Rogers v. Howell, 592 S.W.2d 402, 403
(Tex. Civ. App.–Dallas 1979, writ ref’d n.r.e.); see also McDaniel, 2008 Tex. App. LEXIS
5119, at *2-3.
6
The Barreras’ petition incorporated by reference an affidavit by Victor Barrera
stating in part that “my wife and I will be irreparably harmed unless the Court intervenes
to enjoin the eviction because the loss of the unique real estate would leave my wife
and I without possession of their [sic] property and would be wrongful . . . .” However, in
the absence of an agreement between the parties, the proof required to support a
judgment issuing a temporary injunction may not be made by affidavit. Millwrights Local
Union No. 2484, 433 S.W.2d at 686; see also McDaniel, 2008 Tex. App. LEXIS 5119, at
*2. No agreement permitting Barrera’s affidavit to serve as evidence supporting the
temporary injunction appears in the record before this Court.
Finally, no witnesses were sworn and no testimony was given at the September
14, 2010 hearing. Although counsel for both parties argued the merits of the temporary
injunction at that hearing, “remarks of counsel during the course of a hearing are not
competent evidence unless the attorney is actually testifying.” Bay Fin. Sav. Bank, FSB
v. Brown, 142 S.W.3d 586, 590 (Tex. App.–Texarkana 2004, no pet.) (citing Collier
Servs. Corp. v. Salinas, 812 S.W.2d 372, 377 (Tex. App.–Corpus Christi 1991, orig.
proceeding)). The record reflects that neither attorney actually testified at the hearing.
The Barreras presented no evidence to support their request for temporary
injunction other than their sworn petition, affidavit, and argument of counsel. This is, in
effect, no evidence, and the trial court therefore abused its discretion by granting the
temporary injunction. See Operation Rescue-Nat’l v. Planned Parenthood of Houston &
Se. Tex., 975 S.W.2d 546, 560 (Tex. 1998) (“[A] trial court has no discretion to grant
injunctive relief . . . without supporting evidence.”); Alert Synteks, Inc. v. Jerry Spencer,
L.P., 151 S.W.3d 246, 253 (Tex. App.–Tyler 2004, no pet.) (“[I]t is an abuse of discretion
7
for a trial court to issue a temporary injunction where no evidence that would support a
temporary injunction was presented to the trial court.”). Appellants’ first issue is
sustained.6
III. CONCLUSION
We reverse the judgment of the trial court granting appellees’ request for
temporary injunction, and we remand the cause for further proceedings consistent with
this opinion.
DORI CONTRERAS GARZA
Justice
Delivered and filed the
3rd day of March, 2011.
6
Because this issue is dispositive of the appeal, we need not address appellants’ remaining two
issues. See TEX. R. APP. P. 47.1.
8