Farkas, Janos v. Fannie Mae Association ( 2012 )

AFFIRMED; Opinion Filed October 31, 2012.
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No. 05-11-01416-CV
JANOS FARKAS, Appellant
V.
FEDERAL NATIONAL MORTGAGE ASSOCIATION A/K/A FANNIE MAE, Appellee
On Appeal from the County Court at Law No. 2
Dallas County, Texas
Trial Court Cause No. CC-11-06326-B
MEMORANDUM OPINION
Before Justices O’Neill, FitzGerald, and Lang-Miers
Opinion By Justice Lang-Miers
Janos Farkas’ appeals the county court at law’s judgment in favor of the Federal National
Mortgage Association, also known as Fannie Mae, in a forcible detainer proceeding. In two issues,
Farkas argues that Fannie Mae did not establish the required elements of’ forcible detainer and that
the trial court erred in denying his plea in abatement. Because all dispositive issues are settled in
law, we issue this memorandum opinion. TEX. R. APP. P. 47.2(a), 47.4. We affirm.
Mae sued Parkas and all occupants of the property. Both the justice court and county court at law rendered judgment against Parkas
and all occupants. Parkas tried the case prose and only Parkas appealed the judgment of the county court at law to this Court. As a result, Parkas
is the only appellant before the Court.
BACKGROUND
On January 2, 2007, Farkas executed a promissory note secured by a (Iced of trust for
property located at 1122 Jackson Street. Number 60$, Dallas. Texas 75202. The deed identilied
WR Starkey Mortgage. L.L.P. as lender. In the event that Farkas defaulted on the note, section 22
ot the deed of trust provided the lender with remedies, including the power of sale by foreclosure.
Section 22 provided:
If the Property is sold pursuant to this Section 22, Borrower or any person
holding possession of the Property through Borrower shall immediately surrender
possession of the Property to the purchaser at that sale. If possession is not
surrendered, Borrower or such person shall be a tenant at sufferance and may be
removed by writ of possession or other court proceeding.
After Farkas defaulted on the note, Aurora Loan Services, LLC’ purchased the property at a
foreclosure sale, and then conveyed the property to Fannie Mae. Attorneys for Fannie Mae sent a
notice to vacate to Farkas by both certified mail and first—class mail demanding that Farkas vacate
the property within three days. Farkas did not vacate the property and Fannie Mae filed a forcible
detainer proceeding in the justice court against Farkas and all occupants of the property. The justice
court awarded possession of the property to Fannie Mae.
Farkas appealed to the county court at law and filed a plea in abatement in that case stating
that he had also filed a case in the district court “complaining of the wrongful actions of [Fannie
Mae] and others in the conduct of the foreclosure process.” He “ask[ed] the Court to abate these
proceedings until a determination of the issues of title to the property has been made” by the district
court. The county court at law denied the plea in abatement and conducted a de novo bench trial.
The court admitted the following as Fannie Mae’s exhibits without objection from Farkas: (1) a
certified copy of the deed of tnist signed by Farkas; (2) a certified copy of the substitute trustee’s
deed showing that Aurora was the purchaser of the property at the foreclosure sale; (3) a certified
copy of the special warranty deed transferring ownership ofthe property from Aurora to Fannie Mae;
and (4) a copy of the notice to vacate sent by certified and first-class mail by Fannie Mae’s counsel
to Farkas and a printout from the United States Postal Service indicating that the copy sent by
certified mail was unclaimed and returned. Farkas testified that he still was in possession of the
property at the time of trial. The county court at law rendered judgment awarding possession of the
property to Fannie Mae. This appeal followed.
APPUcABLE LAW
In a forcible detainer proceeding, “the only issue shall be as to the right to actual possession;
and the merits of the title shall not be adjudicated.” TEx. R. Civ, P. 746; see Scott v. Hewitt, 90
S.W.2d 816, 818-19 (Tex. 1936); Montgomery v. Aurora Loan Servs., LLC, 375 S.W.3d 617, 621
(Tex. App .—DaIlas 2012, pet. filed). it is cumulative—not exclusive—ofother remedies that a party
may have in the courts of this state, Bruce v. Fed. iVat ‘1 Mortg. Ass ‘n, 352 S.W.3d 891, 893 (Tex.
App.—Dallas 2011, pet. denied). A party may bring a separate lawsuit in the district court to
determine a title dispute. Id. However, a title dispute does not deprive a justice court or county court
at law of jurisdiction unless determining who has the right to immediate possession necessarily
requires resolution of the title dispute. Id.
LANDLoRD-TENANT RELATIONSHIP AND NoTIcE
In his first issue, Farkas argues that Fannie Mae did not establish the elements of forcible
detainer. Specifically, Farkas contends that (1) Fannie Mae did not establish that it had a landlord-
tenant relationship with Farkas and (2) Fannie Mae did not prove proper delivery of a notice to
vacate. See TEx. PROP. CODE ANN. § 24.002 (West 2000), § 24.005(f)—(g) (West Supp. 2012).
Fannie Mae argues that Farkas has not preserved these arguments because Farkas does not
identify where in the record Farkas presented these arguments to the trial court and the trial court
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ruled against hin on the arguments. But we construe his arguments to be a legal sufficiency
challenge and “[ijn a nonjury case, a complaint regarding the legal or factual insufficiency of the
evidence ... may be made for the first time on appeal in the complaining partys brief.” TEx. R.
Ai’i’. P. 33.1(d).
When a party challenges the legal sufficiency of the evidence, we consider the evidence in
the light most favorable to the finding, indulging every reasonable inference in support. See Cliv of
Keller u. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable
fact-finder could and disregard contrary evidence unless a reasonable fact-finder could not. See id.
at 827. If the evidence would permit reasonable and fair-minded people to reach the finding under
review, the legal sufficiency challenge fails. See id.
Landlord-Tenant Relationship
Farkas argues that Fannie Mae did not establish a landlord-tenant relationship between
Fannie Mae and Farkas. Without any explanation, he argues that “Fannie Mae did not provide
evidence that the tenant-landlord relationship is not subject to the restriction ... by the Special
Warranty [Deedi” that states “{t]his conveyance is made and accepted to subject to any and all
validly existing restrictions . . . and to any applicable zoning laws and building ordinances[.]”
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Fannie Mae argues that the substitute trustee’s deed and special warranty deed establish that Fannie
Mae owned the property. Fannie Mae also contends that section 22 of the deed of trust created a
landlord-tenant at sufferance relationship between Aurora and Farkas at the time of the foreclosure
sale, and that the special warranty deed “extended the landlorditenant relationship to Fannie Mae[.]”
Viewing the evidence in the light most favorable to the judgment, we conclude that the
Farkas misquotes the special warranty deed, but this difference does not affect our analysis. The special warranty deed reads: “This conveyance
is made and accepted subject to any and all validly existing restrictions ... and to any applicable zoning laws or ordinances and building use
occupancy eode[.j”
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evidence was legally sufficient to establish a landlord-tenant relationship between Fannie Mae and
Farkas .See horns/u . Sec i of Veterans Af/,irs, No. 05—1 1-01 075-C V. 2012 WL 3525420, at *3
(Tex. App .---- Dallas Aug. 16. 2() 12, no pet.) (mern. op.) (concluding evidence including a deed of
trust provision like section 22 in this case and a warranty deed conveying property to appellee was
legally sufficient to establish occupant was tenant at sufferance and that appellee had acquired right
to possession). We resolve this part of Farkas’s first issue against him.
Notice to Vacate
Farkas argues that Fannie Mae did not establish proper delivery of the notice to vacate and,
as a result, Fannie Mae violated section 24.005(f) and (g) of the property code by filing the forcible
detainer proceeding beftre properly delivering the notice to vacate. The property code provides that,
to prevail in a forcible cletainer proceeding, the party seeking possession must show that he gave the
occupant proper notice to vacate at least three days prior to filing suit. TEx. PROP. CoDE ANN. §
24.002(b), 24.005. “Notice by mail may be by regular mail, by registered mail, or by certified mail,
return receipt requested, to the premises in question.” Ic!. § 24.005(f). Additionally, the dcccl of trust
provides that a notice to Farkas “shall be deemed to have been given to” Farkas “when mailed by
first class mail[.]”
The record shows that Fannie Mae’s counsel sent two separate copies of the notice, one by
certified mail with return receipt requested and one by first-class mail to the property. Farkas
contends that Fannie Mae did not prove proper delivery of the notice because Fannie Mae presented
evidence that Farkas did not receive the notice sent by certified mail and the testimony concerning
delivery of the copy sent by first-class mail was “legally insufficient evidence to prove delivery of
the Notice to Vacate, because it is based on belief not on personal knowledge[.]” Fannie Mae
argues that it did prove delivery through Jason Sullivan, the custodian of the relevant records for
Fannie Mae’s counsel, and that “[i]t was within the Trial Judge’s discretion to weigh the evidence
with regards to the delivery of the Notice to \/acate” and that the court “determined that the
prerequisite delivery occurred and that the delivery of the Notice to Vacate was legally sufficient.”
We agree with lannie Mae.
Sullivan testified that the notice was sent by “both certified and regular mail[.]” He also
testified that the law firm’s standard practice when a letter is returned to the firm is “that it is imaged
into the appropriate file[.]” He testified that, if the notice sent by first-class mail had been returned
to the law firm, he would have found evidence of its return in the file. He also testified that he did
not find any indication in the file that the notice sent by first-class mail had been returned to the law
firm. Consequently, the evidence presented, viewed in the light most favorable to thejudgment, was
legally sufficient to establish that Farkas was given notice to vacate. See Johnson v. Sec ‘v of
Veterans A /Jiirs, No. 05-03-01560-C V, 2004 WL 1615842, at *1 (Tex. App.—Dallas July 20, 2004,
pet. dism’d w.o.j.) (mem. op.) (concluding appelice’s notice to vacate was sufficient when sent by
first—class and certitied mail to address listed Hi deed of trust). f Gore v. Homecomings Fin.
Network, inc., No. 05-06-01701 -CV, 2008 WL 256830, at *2 (Tex. App.—Dallas Jan. 31, 2008, no
pet.) (mem. op.) (finding that party did not meet burden to establish it gave written notice to vacate
where “record affirmatively show[ed] the demand letters sent [by first-class mail and by certified
mail] . . .were returned unopened and undelivered”). We also resolve this part of Farkas’s first issue
against him.
PLEA IN ABATEMENT
In his second issue, Farkas argues that the court erred by denying his plea in abatement
because (1) there was an “existing intervening title dispute at the District Court” and (2) the court
denied his plea “before Fannie Mae established the proof oftenant-landlord relationship[.]” Fannie
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Mae first contends that Farkas has not properly preserved this issue tbr appellate revie\v because he
does not show where in the record he presented the issue to the trial court and where the trial court
ruled on his complaint. The record shows, however, that Farkas presented his plea to the court and
that the court denied his plea.
We review the court’s denial of Farkas’s plea in abatement for an abuse of discretion. See
Lagow v. Humon rd. Roach, No. 05-10-01499-C V. 2012 WL 3636893, at *2 (Tex. App.- —Dallas
August 24. 2012, no pet.); Lee v. GST Transp. Svs., LP, 334 S.W.3d 16, 18 (Tex. App—Dallas
2008, pet. denied). A trial court abuses its discretion when it acts in an unreasonable and arbitrary
manner, or without reference to any guiding rules or principles. See Downer v. Aquamarine
Operators, Inc., 701 S.W.2d 238, 241—42 (Tex. 1985); Lagow, 2012 WL 3636893, at *2.
Farkas argues that Rice v. Pinnev, 51 S.W.3d 705, 712 (Tex. App.—Dallas 2001, no pet.),
and Mitchell v Armstrong Capital Coip., 911 S.W.2d 169, l7 (Tex. App.—Houston [1st Dist.]
1995, writ denied), support his argument that “Fannie Mae did not establish the proof of tenant—
landlord relationship with Farkas, therefore the Court did not have an independent base establishing
immediate possession without resolving the issue of ti[t]le to the property” and, as a result, the court
did not have jurisdiction. But Rice and the record in this case support the opposite conclusion. And,
as we discussed in Rice, Mitchell is distinguishable because, unlike the present case, the lien
document at issue in Mitchell did not create a landlord-tenant relationship upon default or any other
independent grounds to establish the right to immediate possession. Rice, 51 S.W.3d at 711—12; see
Mitchell. 911 S.W.2d at 170—7 1.
The record here shows that the deed of trust established a landlord-tenant relationship
between Fannie Mae and Farkas. As in Rice, “[t]his landlord-tenant relationship provided an
independent basis on which the trial court could determine the issue of immediate possession without
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resolving the issue of title to the property.” Rice, 51 S.W.3d at 712; see Bruce, 352 S.W.3d at
893—94 (concluding similar provision in deed of trust established a landlord-tenant relationship that
served as an independent basis for determining right to immediate possession without resolving title
issue); US. Bank Nat 7 Ass ‘a v, Freenev, 266 S.W.3d 623, 625—26 (Tex. App.—Dallas 2008, no
pet.) (same). We resolve Farkas’s second issue against him.
CoNcLusioN
We resolve Farkas’s two issues against him and affirm the judgment of the county court at
law. //..7
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Elthj3ETH LANi-MlER,$
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JUDGMENT
JANOS FARKAS. Appellant Appeal from the County Court at Law No. 2
of Dallas County, Texas. (Tr.Ct.No. CC-il-
No. 05-1 l-01416-CV V. 06326-B).
Opinion delivered by Justice Lang-Miers,
FEDERAL NATIONAL MORTGAGE .Justices O’Neill and FitzGerald
ASSOCIATION A/K/A FANNIE MAE, participating.
Appel lee
In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED. It is ORflERED that appeiiee Federal National Mortgage Association a/k/a
Fannie Mae recover its costs of this appeal from appellant Janos Farkas and from the supersedeas
bond or cash deposit in lieu of supersedeas bond. After all costs have been paid, we DIRECT
the clerk of the Dallas County court to release the balance, if any, of the cash deposit in lieu of
supersedeas bond to Janos Farkas.
.Iudgment entered October 3 1, 2012.
,4iABET LANd-MiiRS
JVTICE