Christy Onabajo and Femi Onabajo v. Household Finance Corp. III ( 2015 )

ACCEPTED
03-15-00251-CV
7990386
THIRD COURT OF APPEALS
AUSTIN, TEXAS
11/25/2015 11:37:00 AM
December 8, 2015 JEFFREY D. KYLE
CLERK
No. 03-15-00251-CV
__________________________________
RECEIVED IN
IN THE COURT OF APPEALS 3rd COURT OF APPEALS
AUSTIN, TEXAS
FOR THE THIRD DISTRICT OF TEXAS 11/25/2015 11:37:00 AM
AT AUSTIN JEFFREY D. KYLE
__________________________________ Clerk
FEMI S. ONABAJO AND CHRISTY ALFRED ONABAJO,
Appellants
v.
HOUSEHOLD FINANCE CORP. III,
Appellee
_________________________________
APPEAL FROM THE COUNTY COURT AT LAW NUMBER TWO OF
TRAVIS COUNTY, TEXAS
Trial Court Cause No. C-1-CV-14-010888
BRIEF OF APPELLANTS
Penny Y. Haye
Texas Bar No. 24030363
Law Office of Penny Haye
7703 North Lamar Blvd Suite 400
Austin, Texas 78752
Telephone: (512) 677-4293
Facsimile: (512) 777-4535
Penny haye@sbcglobal.net
ATTORNEY FOR APPELLANTS
ORAL ARGUMENT REQUESTED
No. 03-15-00251-CV
IN THE COURT OF APPEALS
FOR THE THIRD DISTRICT OF TEXAS
AT AUSTIN
__________________________________
FEMI S. ONABAJO AND CHRISTY ALFRED ONABAJO,
Appellant
v.
HOUSEHOLD FINANCE CORP. III,
Appellee
_________________________________
APPEAL FROM THE COUNTY COURT AT LAW NUMBER TWO OF
TRAVIS COUNTY, TEXAS
Trial Court Cause No. C-1-CV-14-010888
BRIEF OF APPELLANTS
Penny Y. Haye
Texas Bar No. 24030363
Law Office of Penny Haye
7703 North Lamar Blvd Suite 400
Austin, Texas 78752
Telephone: (512) 677-4293
Facsimile: (512) 777-4535
Penny haye@sbcglobal.net
ATTORNEY FOR APPELLANTS
ORAL ARGUMENT REQUESTED
Appellants’ Brief Pg. 2
IDENTITY OF PARTIES AND COUNSEL
The following is a complete list of all parties, as well as the names and addresses
of all counsel:
PARTIES
Appellants/Defendants:
FEMI S. ONABAJO AND CHRISTY ALFRED ONABAJO
Counsel:
PENNY Y. HAYE
Texas Bar No. 24030363
Law Office of Penny Haye
7703 N. Lamar Blvd. Suite 400
Austin, TX 78752
Telephone: 512.677.4293
Fax: 512.777.4535
Penny_haye@sbcglobal.net
Appellee/Plaintiff:
HOUSEHOLD FINANCE CORP. III
Counsel:
SARAH ROBBINS
Texas Bar No. 24074966
Hughs, Watters & Askanase, L.L.P.
Three Water Center
333 Clay, 29th floor
Houston, Texas 77002
Telephone: 713.328.1916
Fax: 713.759.6834
srobbins@hwa.com
ARTHUR TROILO, III
Texas Bar No. 20236010
TROILO LAW FIRM, P.C.
700 East 11th Street, Suite 300
Austin, Texas 78701
Telephone: (512) 391-9117
Appellants’ Brief Pg. 3
TABLE OF CONTENTS
IDENTIES OF PARTIES AND COUNSEL .......................................................... 3
TABLE OF AUTHORITIES .................................................................................. 5
STATEMENT OF THE CASE .............................................................................. 8
STATEMENT REGARDING ORAL ARGUMENT ............................................. 8
ISSUES PRESENTED………………..................................................................... 8
STATEMENT OF FACTS ...................................................................................... 9
ARGUMENTS:
ISSUE 1: The Trial Court lacked Jurisdiction………………………… 14
ISSUE 2: Appellee’s failure to comply with Texas Property Code
§24.005……………………………………………………... 20
ISSUE 3: Applying Texas Civil Practice and Remedies Code Section
16.00(a) the two-year statute of limitations………………… 21
ISSUE 4: Applying Res judicata………………………………………. 28
CERTIFICATE OF COMPLIANCE .................................................................... 29
APPENDIX …………………………………………........................................... 30
Appellants’ Brief Pg. 4
TABLE OF AUTHORITIES
CASES
A Plus Investments, Inc. v. Rushton, 2004 WL 868866, 2004 Tex. App. Lexis
3605 (Tex. App.—Ft. Worth 2004)…………………………………14, 16
Arnold v. Nat'l County Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex. 1987)…21
Arquette v.Hancock , 656 S.W.2d 627, 629 (Tex. App.--San Antonio 1983, writ ref'd
n.r.e.))………………………………………………………………………...23
Buttery v. Bush, 575 S.W.2d 144, 146 (Tex. Civ. App.—Tyler 1978, writ ref'd n.r.e.).
……………………………………………………………………………….27
Creditwatch, Inc. v. Jackson, 157 S.W.3d 814, 816 n.8 (Tex. 2005)…………..23
Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 918 (Tex.2013)
…………………………………………………………………………21,24,25
Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex.2011)…..21
Federal Home Loan Mortg. Corp. v. Pham., 449 S.W.3d 230, 235–36 (Tex.App.–
Houston [14th Dist.] 2014, no pet.)………………………………………26
Gideon v. Johns-Manville Sales Corp., 76 1 F.2d 1129, 1136-37 (5th Cir. 1985)…28
Haith v. Drake, 596 S.W.2d 194, 196 (Tex.Civ.App.–Houston [1st Dist.] 1980, writ
ref’d n.r.e.)…………………………………………………………………...14
Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 567 (Tex. 2001)…21
Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 206 (Tex. 1999)..27
Jaimes v. Federal Nat’l Mortg. Ass’n, No. 03–13–00290–CV, 2013 WL 7809741
(Tex.App.–Austin Dec. 4, 2013, no pet.)……………………………………13
Jones v. American Fed. Bank, F.S.B., No. 05–91–00634–CV, 1992 WL 32961, at *2
(Tex.App.—Dallas 1992, writ dism’d w.o.j.) ………………………………..13
Jones v. Texaco, Inc., 945 F. Supp. 1037 – Dist. Court, SD (Texas 1996)…………23
Krohn v. Marcus Cable Assocs., L.P., 201 S.W.3d 876, 881 (Tex. App. 2006)...24,25
Leavings v. Mills, 175 S.W.3d 301, 310 (Tex. App. -Houston [1" Dist.] 2004, no
pet.)…………………………………………………………………………..17
McKinney v. Blakenship, 282 S.W.2d 69,698 (Tex. 1955 )……………………….27
Massaad v. Wells Fargo Bank, Nat’l Ass’n, No. 03-14-00202-CV, 2015 WL 410514,
(Tex. App.-Austin Jan. 30, 2015, no pet.)………………………………….26
Appellants’ Brief Pg. 5
Millet v. JP Morgan Chase, N.A. , 20 12 WL 1029497 at *3 (W.D. Tex.2012)…17
Morriss v. Enron Oil & Gas Co., 948 S.W.2d 858 (Tex. App. 1997)……………23
Montenegro v. Wells Fargo Bank, N.A., No. 03-13-00123-CV, 2015 WL 3543055
(Tex. App. June 3, 2015)………………………………………………...13, 26
Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990)………………..21
Okorafor v. Uncle Sam & Assocs., Inc., 295 S.W.3d 27, 38 (Tex. App.—Houston
[1st Dist.] 2009, pet. denied)…………………………………………………20
Onion Creek Luxury Apartments v. Powell, No. 03-11-00008-CV, 2011 Tex. App.
LEXIS 7261 (Tex. App. – Austin, Aug. 31, 2011, no pet.)………………..18
Puentes v. Fannie Mae, 350 S.W.3d 732, 739 (Tex. App. - El Paso 2011, pet.
dism‘d)……………………………………………………………………26,27
Pustejovsky v. Rapid-American Corp. v. Pustejovsky, 35 S.W.3d 643, 646
(Tex.2000)……………………………………………………………………28
Roehrs v. Conesys, Inc.,2005 U.S. Dist. LEXIS 33295, 2005 WL 3454015(N.D.
Tex.Dec. 14, 2005)…………………………………………………………. 24
Reese v. Reese, 672 S.W.2d 1, 2 (Tex. Civ. App.—Waco 1984, no writ)………..27
Rogers v. Ardella Veigel Inter Vivos Trust, 162 S.W.3d 281, 290 (Tex. App.-
Amarillo 2005, pet. denied)………………………………………………….22
Rice v. Pinney, 51 S.W.3d 705, 709 (Tex.App.–Dallas 2001, no pet.)…………..13
Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 445 (Tex. 1993).
………………………………………………………………………………..15
Tex. Dep't of Parks & Wildlife v.Miranda, 133 S.W.3d 217, 226 (Tex. 2004)….14
Texas Employment Comm'n v. International Union of Elec., Radio and
Mach.Workers, Local Union No. 782, (1961)…………………………….. 14
Two Pesos, Inc. v. Gulf Ins. Co., 901 S.W.2d 495, 500 (Tex. App.-- Houston [14th
Dist.] 1995, no writ)………………………………………………………… 23
Twyman v. Twyman, 790 S.W.2d 819, 821 (Tex.App.-Austin 1990), rev'd on other
grounds, 855 S.W.2d 619 (Tex.1993)………………………………………24
W W Laubach Trust v. The Georgetown Corp., 80 S.W.3d 149, 159 (Tex. App.-
Austin 2002, pet. denied)…………………………………………………….25
Ward v. Malone, 115 S.W.3d 267, 269 (Tex. App.-Corpus Christi 2003, pet.
denied)………………………………………………………………………..18
Williams v. Bank of New York Mellon, 315 S.W.3d 925, 926 (Tex.App.–Dallas 2010,
Appellants’ Brief Pg. 6
no pet.)……………………………………………………………………… 13
Will. v. Garage Paix, Inc., 562 S.W.2d 534, 535 (TexCiv.App—Houston [14
Dist.] 1978)…………………………………………………………………. 22
Texas Constitution
Texas Constitution, Art. XVI §50(A)(6)(D)………………………………………..15
Texas Rules of Civil Procedure
Texas Rules of Appellate Procedure 39.1……………………………………………8
Texas Rule of Civil Procedure 510.3(e)………………………………………….. 13
Texas Rule of Civil Procedure 736.1(d)…………………………………. 11, 15, 16
Texas Statutes
Texas Civil Practice and Remedies Code §16.003(a)……………12,13,19,20,22,27
Texas Property Code § 24.002 ………………………………………………...10,15
Texas Property Code § 24.004…………………………………………………….15
Texas Property Code § 24.005…………………………………………………….15
Other Sources
Fuchs, Fred, “Forcible Detainer Lawsuits: Issues and Traps for the Unwary,”
Updated October 1, 2013, page 101. See
http://tjcja.org/resources/evictions......................................................... 19
Appellants’ Brief Pg. 7
STATEMENT OF THE CASE
This is an appeal from the forcible detainer final judgment rendered by the
Honorable Judge Todd T. Wong in the County Civil Court at Law Number One in
Austin, Travis County, Texas. The Court ruled in favor of Appellee/Plaintiff
despite a previously rendered adverse judgment from the same court 1 and even
though Appellee’s current forcible detainer case had been filed more than two
years after the alleged cause of action accrued.
Appellants’ central issues in this appeal are (i) an inherent issue of title
existed in the justice court and the county court thereby divesting each of
jurisdiction to proceed, (ii) that Appellee violated Texas Property Code §24.005 in
prematurely filing its forcible detainer suit, (iii) that Appellee filed this case
outside the applicable two-year statute of limitations for a forcible detainer case,
and (iv) Appellee’s suit should be barred by res judicata.
STATEMENT REGARDING ORAL ARGUMENT
Pursuant to Texas Rules of Appellate Procedure 39.1, Appellants request
oral argument and submit that it would materially aid the decisional process in
this case.
ISSUES PRESENTED FOR REVIEW
ISSUE 1: The Trial Court lacked jurisdiction.
1
On December 20, 2012.
Appellants’ Brief Pg. 8
ISSUE 2: Appellee’s failure to comply with Texas Property Code
§24.005.
ISSUE 3: Applying Texas Civil Practice and Remedies Code Section
16.00(a) the two-year statute of limitations.
ISSUE 4: Applying Res judicata. Pg 28
STATEMENT OF FACTS
1. On June 22, 2001, Appellants financed
(the “Subject Property”) which is more formally described as:
LOT 2, BLOCK “D”, OF SCOFIELD FARMS PHASE
VII, SECTION I RESUBDIVISION OF THE
AMENDED PLAT OF SCOFIELD FARMS PHASE 4 A
SUBDIVISION IN TRAVIS COUNTY, TEXAS,
ACCORDING TO THE MAP OR PLAT, OF RECORD
IN VOLUME 95, PAGES 223-25, OF THE PLAT
RECORDS OF TRAVIS COUNTY, TEXAS.
2. As part of the initial financing arrangement Appellants signed a
Texas Home Equity Adjustable Rate Note 2 (“Note”) and a Texas Home Equity
Security Instrument 3 (“Deed of Trust”). In the Deed of Trust, the “Lender” was
defined as HOME CAPITAL INC, a Georgia Corporation.
3. The Deed of Trust states that “[i]f the Property is sold pursuant to this
paragraph 21, Borrower or any person holding possession of the Property through
Borrower shall immediately surrender possession of the Property to the purchase at
2
RR Vol. 3, Pg 43, Defendant’s Exhibit 1.
3
RR Vol. 3, Pg 5, Plaintiff’s Exhibit 1; CR Pg 58.
Appellants’ Brief Pg. 9
the sale. If possession is not surrendered, Borrower or such person shall be a tenant
at sufferance and may be removed by writ of possession.”4
4. On December 10, 2010, Appellee filed an Application for Court Order
for Foreclosure under Texas Rules of Civil Procedure 736 5. Their application was
verified by Appellee’s counsel 6 and contained a copy of Appellants’ Note, which it
claimed was a true and correct and showed that the Note had been endorsed by
HOME CAPITAL INC. to THE PROVIDENT BANK.. 7 Neither the endorser nor
the endorsee were included in the Application, nor were any documents attached
showing any relationship with Appellee.
5. According to the Substitute Trustee’s Deed, 8 on April 03, 2012
presented by Appellee, the Property was allegedly sold to Appellee Household
Finance Corp. III., for the credit bid of $238,049.90. The Substitute Trustee’s Deed
alleges that, although the original mortgagee was HOME CAPITAL INC., the
alleged Current Mortgagee was HOUSEHOLD FINANCE CORP. III, and the
Mortgage Servicer was HSBC MORTGAGE SERVICES, INC.
5. Appellee’s attorney Hughes, Watters & Askanase, LLP sent a letter
entitled Notice to Vacate Premises dated May 3, 2012 9 and filed a forcible detainer
4
RR Vol. 3, Pg. 11, Plaintiff’s Exhibit 1.
5
RR Vol. 3, Pg 50.
6
As required by Texas Rules of Civil Procedure 736.1(d)(6).
7
RR Vol. 3, Pg. 57.
8
RR Vol. 3 Pg. 18, Plaintiff’s Exhibit 2; CR Pg. 18.
9
RR Vol. 3, Pg. 48, Defendant’s Exhibit 2.
Appellants’ Brief Pg. 10
on August 20, 2012. Judgment was rendered by the Travis County Court at Law
Number Two in favor of Appellants on December 20, 2012 10; Appellee appealed
the decision to the Third Court of Appeals but dismissed their appeal on July 18,
2013. 11
6. Just over two months later, Appellee’s attorney Hughes, Watters &
Askanase, LLP, sent another letter titled a Notice to Vacate Premises dated
October 8, 2015 12; it was not delivered to Appellants until October 17, 2014.13 On
the very same day, Appellee filed their current Complaint for Forcible Detainer
and Original Petition14, well after the two year limitation 15 from April 3, 2014.
7. On November 6, 2014, the Honorable Justice of the Peace Judge
Glenn Bass rendered judgment of possession 16 for Appellee. Appellants appealed
the judgment to County Court.
8. On March 31, 2015, the County Court awarded judgment for
Appellee17, despite the statute of limitations found in Tex. Civ. Prac. & Rem. Code
10
Cause # C-1-CV-12-009421, Household Finance Corp III v Femi Onabajo, et al, County
Court at Law #2, Travis County, Texas.
11
Cause No. 03-13-00086-CV.
12
RR Vol. 3 Plaintiff’s Exhibits 3,4,and 5 Page 23, 25, and 27 of the Reporter’s Record; Page
26 through 30 of the Clerk’s record
13
RR Vol. 3, Pg. 30-31, Plaintiff’s Exhibit 5.
14
CR 55 Through 57.
15
Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a).
16
CR 10.
17
CR 98; RR Vol. 2, Pg. 47.
Appellants’ Brief Pg. 11
Ann. § 16.003 and the lack of jurisdiction because of an intertwined issue of title
divesting the justice and county courts of jurisdiction.
ARGUMENT AND AUTHORITIES
ISSUE 1: The Trial Court lacked Jurisdiction.
Forcible detainer is a procedure to determine the right to immediate
possession of real property when there is no unlawful entry and is intended to be
a speedy, simple, and inexpensive procedure for obtaining possession without
resorting to a suit on the title. Montenegro v. Wells Fargo Bank, N.A., No. 03-13-
00123-CV, 2015 WL 3543055, at *1 (Tex. App. June 3, 2015) citing Williams v.
Bank of New York Mellon, 315 S.W.3d 925, 926 (Tex.App.–Dallas 2010, no
pet.); see also Tex.R. Civ. P. 510.3(e) (only issue before justice court in eviction
cases is “right to actual possession and not title”). A forcible-detainer action will
lie when a person in possession of real property refuses to surrender possession
on demand if the person is a tenant at will or by sufferance. See Tex. Prop. Code
§ 24.002(a); Jaimes v. Federal Nat’l Mortg. Ass’n, No. 03–13–00290–CV, 2013
WL 7809741, at *1 (Tex.App.–Austin Dec. 4, 2013, no pet.); Rice v. Pinney, 51
S.W.3d 705, 709 (Tex.App.–Dallas 2001, no pet.).
The sole issue in a forcible-detainer suit is who has the right to immediate
possession of the premises. Rice, 51 S.W.3d at 709. However, where the right to
immediate possession necessarily requires resolution of a title dispute, the justice
Appellants’ Brief Pg. 12
court has no jurisdiction to enter a judgment and may be enjoined from so doing.
Haith v. Drake, 596 S.W.2d 194, 196 (Tex.Civ.App.–Houston [1st Dist.] 1980,
writ ref’d n.r.e.). The justice courts and the county courts at law are only
deprived of jurisdiction to adjudicate a forcible detainer action if the question of
title is so intertwined with the issue of possession that possession may not be
adjudicated without first determining title. A Plus Investments, Inc. v. Rushton,
2004 WL 868866, 2004 Tex. App. Lexis 3605 (Tex. App.—Ft. Worth
2004)(emphasis added).
Standard of Review
The “standard of review” used by the appellate court to review a lack of
jurisdiction is de novo. Tex. Dep't of Parks & Wildlife v.Miranda, 133 S.W.3d
217, 226 (Tex. 2004). The Court should construe the pleadings liberally in favor
of the pleader and look to the pleader’s intent to determine whether the facts
alleged affirmatively demonstrate the trial court’s jurisdiction to hear the cause.
Subject matter jurisdiction is an issue that may be raised for the first time on
appeal; it may not be waived by the parties. 18 Further, a party's standing or lack
thereof, is a component of subject matter jurisdiction and it may be raised for the
18
Texas Employment Comm'n v. International Union of Elec., Radio and Mach.Workers, Local
Union No. 782, 163 Tex. 135, 352 S.W.2d 252, 253 (1961); This court recently reiterated that
axiom in Gorman v. Life Insurance Co., 811 S.W.2d 542, 547 (Tex.), cert. denied, 502 U.S.
824, 112 S. Ct. 88, 116 L. Ed. 2d 60 (1991).
Appellants’ Brief Pg. 13
first time on appeal. 19
Heightened Scrutiny with Home Equity Loans
In this case, the documents giving rise to Appellee’s claim for forcible
detainer a heightened scrutiny because they involve a home equity loan, more
particularly Appellants’ Texas Home Equity Security Instrument.20 The Home
Equity Security Instrument provides that “[i]f the Property is sold pursuant to this
Paragraph ... [Appellants] shall immediately surrender possession ... to the
purchaser at the sale ... [or][i]f possession is not surrendered ... shall be a tenant
at sufferance ...” (emphasis added). This means a foreclosing entity must comply
with the article XVI, section 50(a)(6)(D) of the Texas Constitution, which
requires a court order for foreclosure. See TEX. CONST. art. XVI § 50(a)(6)(D).
The requirements of the Texas Constitution, which were also part of this
home equity security instrument, were disregarded. See TEX. CONST. art. XVI §
50(a)(6)(D). In seeking a court order for foreclosure under Texas Rules of Civil
Procedure 736, only the person or entity legally authorized to prosecute the
foreclosure.21 Appellee’s Application for Order for Foreclosure 22, verified by
Appellee’s counsel 23, contains a copy of Appellants’ Note, which it claims is true
and correct, showing that the Note had been endorsed by HOME CAPITAL INC.
19
Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 445 (Tex. 1993).
20
RR Vol 3, Pg 58, Texas Home Equity Security Instrument.
21
Texas Rule of Civil Procedure 736.1(d)(1)(A).
Appellants’ Brief Pg. 14
to THE PROVIDENT BANK.. 24 Without more information, the only entity
entitled to enforce the Note was THE PROVIDENT BANK. There are no
documents that show that Appellants has any legal authority to enforce the note
or seek foreclosure of the Property. Absent the right to foreclose, Appellee could
not transfer ownership of the property. Without this authority, Appellee’s
foreclosure and subsequent purchase of the Property through the Substitute
Trustees Deed was void. The conflict regarding title, however, is apparent.
A Plus Investments, Inc. v. Rushton
The analysis by the Ft. Worth court is instructive.25 In particular, the Court
focused on the requirement in a security instrument granting a foreclosure right
that the right to foreclose and a landlord-tenant relationship only arises if the
property is sold pursuant to the terms of the agreement. Id., at 5-6.
The A Plus Investments, Inc. v. Rushton test applies, holding that only the
party granted the right to foreclose may do so. In the Note and Deed of trust, the
parties are parties given contingent powers, and the names on the Note and Deed
of Trust and the party seeking to enforce same are not the same. The evidence
introduced in the lower courts shows a failure to connect the dots and a complete
disregard when the issue was raised by Appellants. This case exemplifies a
22
RR Vol. 3, Pg 50.
23
As required by Texas Rules of Civil Procedure 736.1(d)(6).
24
RR Vol. 3, Pg. 57.
Appellants’ Brief Pg. 15
situation when the issue of possession is extremely intertwined with the question
of title. This fact situation deprives the lower court of jurisdiction because the
documents inherently create a title dispute.
“But factual disputes may arise when the party seeking to foreclose is not
the original mortgagee, as is most often the case these days. In such cases the
foreclosing party must be able to trace its rights under the security instrument back
to the original mortgagee. Leavings v. Mills, 175 S.W.3d 301, 310 (Tex. App. -
Houston [1" Dist.] 2004, no pet.).”26 As is here the case, there is just no evidence
of how Appellee acquired its rights. If the Substitute Trustees Deed is void then
any interest Appellee had at the time of trial in the justice court would be void as
well making Appellee lack any standing to proceed with its cause of action.
In order to enforce the note as a holder and move forward with foreclosure, a
party who is not the original lender must prove "successive transfers of possession
and endorsement establishing an "unbroken chain of title." Leavings, 175 S.W.3d
at 310. Thus, with certain exceptions, possession of the note is typically required in
order for a holder to enforce it. Millet v. JP Morgan Chase, N.A. , 20 12 WL
1029497 at *3 (W.D. Tex.2012).
25
A Plus Investments, Inc. v. Rushton, 2004 Tex. App. Lexis 3605 (Tex. App.— Ft. Worth
2004)
26
Miller v. Homecomings Financial, LLC, 881 F. Supp. 2d 825 (S.D. Tex. 2012).
Appellants’ Brief Pg. 16
Assuming that the interest Appellee had at the time of the trial in the justice
court was void, and therefore Appellee lacked standing to proceed in the Justice
Court and thus the county court de novo hearing. Jurisdiction over forcible-
detainer actions is expressly given to the justice court of the precinct where the
property is located and, on appeal, to the county court for a trial de novo. See Tex.
Prop.Code Ann. § 24.004; Ward v. Malone, 115 S.W.3d 267, 269 (Tex.App.-
Corpus Christi 2003, pet. denied). The appellate jurisdiction of a statutory county
court is confined to the jurisdictional limits of the justice court, and the county
court has no jurisdiction over an appeal unless the justice court had jurisdiction.
Ward, 115 S.W.3d at 269. Since the justice court clearly did not have jurisdiction
and the Appellee did not have standing, the county court lacked jurisdiction to hear
this matter.
ISSUE 2: Appellee’s failure to comply with Texas Property Code
§24.005.
Appellee must strictly comply with Texas Property Code § 24.002
requirements that state the landlord must make a written demand for possession
in compliance with § 24.005. See, e.g., Onion Creek Luxury Apartments v.
Powell, No. 03-11-00008-CV, 2011 Tex. App. LEXIS 7261, **5-7 (Tex. App. –
Austin, Aug. 31, 2011, no pet.) (mem. op.) (upholding trial court judgment of
possession for tenant on ground that landlord failed to prove it had given the
tenant the required notice to vacate prior to filing suit). If the plaintiff fails to
Appellants’ Brief Pg. 17
give a three day notice to vacate prior to filing a forcible detainer case, the case
must be dismissed because the law requires that the notice to vacate be given
"before the landlord files a forcible detainer suit." See Tex. Prop. Code Ann.
§24.005(a). If the landlord files suit before expiration of the time given to the
tenant to vacate, the suit is premature and should be dismissed. Tex. Prop. Code
Ann. §24.005(b) (West Supp. 2012).
If the other errors presented in this brief are disregarded and the Court
presumes Appellee was entitled to seek its forcible detainer action against
Appellants, then the Court must examine the filing date for Appellee’s Complaint
for Forcible Detainer and Original Petition,27 Appellee’s Notice to Vacate
Premises 28 and the date such notices were delivered to Appellants. 29 The date on
which the notices are delivered is the date used to calculate the notice period for
Texas Property Code 24.005(g). Appellee’s notices were not received by
Appellants until October 17, 2014, which is the same day that Appellee filed their
forcible detainer petition. Appellee violates Texas Property Code 24.005, the
trial court erred in not dismissing the case.
ISSUE 3: Applying Texas Civil Practice and Remedies Code Section
16.003(a) the two-year statute of limitations.
27
CR Pg 55.
28
RR Vol. 2, Pg 12, RR Vol 3, Pg 30; CR Pg 92.
29
RR Vol 3, Pg 30.
Appellants’ Brief Pg. 18
The “standard of review” used by an appellate court to review a trial courts
legal conclusions is de novo.30 Here the trial court decided issues regarding statute
of limitations, therefore making a determination of law.
The statutory precedent to this question is Texas Civil Practice and
Remedies Code §16.003(a):
“(a) Except as provided by Sections 16.010, 16.0031, and 16.0045, a
person must bring suit for trespass for injury to the estate or to the property
of another, conversion of personal property, taking or detaining the personal
property of another, personal injury, forcible entry and detainer, and forcible
detainer not later than two years after the day the cause of action accrues.”
Analysis of a statute is best done by using “…the basic principle that a
statute should be read as a harmonious whole, with its separate parts being
interpreted within their broader statutory content in a manner that further statutory
purpose. 31 In this statute the statement of the Texas Legislature is a “clear
statement of congressional intent…to negate a presumption which is incorrect.32
The Texas legislature limited the time in which a party-plaintiff could pursue a
cause of action associated with real or personal property. This is consistent with
each of the other enumerated causes in this section of the statute but the real
outstanding question is the date on which the cause of action accrues.
30
However, we must apply a de novo standard of review to the trial court's legal conclusions
because a trial court has no discretion in determining what the law is, which law governs, or how
to apply the law. Okorafor v. Uncle Sam & Assocs., Inc., 295 S.W.3d 27, 38 (Tex. App.—
Houston [1st Dist.] 2009, pet. denied).
31
CRS Report for Congress, Statutory Interpretation: General Principles and Recent Trends,
August 31, 2008 Yule Kim Legislative Attorney American Law Division.
Appellants’ Brief Pg. 19
Accrual
When a cause of action accrues is a question of law, not fact. Exxon Corp. v.
Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex.2011); Holy Cross Church of
God in Christ v. Wolf, 44 S.W.3d 562, 567 (Tex. 2001). “Causes of action accrue
and statutes of limitations begin to run when facts come into existence that
authorize a claimant to seek relief.” Id. Put another way, "a cause of action can
generally be said to accrue when the wrongful act effects an injury." Moreno v.
Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990); See Arnold v. Nat'l County
Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex. 1987) ("A cause of action for
breach of the duty of good faith and fair dealing is stated when it is alleged that
there is no reasonable basis for denial of a claim ...").
A purchasing party at a foreclosure sale acquires the right to possess the
property. See Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909,
918 (Tex.2013). It would seem that Appellee’s cause of action for forcible
detainer would accrue at the time they allegedly acquired their property interest
from the foreclosure of the Property on April 3, 2012. In addition, Appellee’s
ability to recover possession of the property through a forcible-detainer action
arose, and therefore, the statute of limitations does not begin to run, when
possession was first demanded and refused by Appellants. See Jones v. American
32
Id.
Appellants’ Brief Pg. 20
Fed. Bank, F.S.B., No. 05–91–00634–CV, 1992 WL 32961, at *2 (Tex.App.—
Dallas 1992, writ dism’d w.o.j.) (not designated for publication). Using that date,
Appellee’s cause of action arose on May 3, 2012 and the statute of limitations
should have ended two years from that date.
The Justice and County courts receive training materials on this very subject
by Fred Fuchs with the Texas Rio Grande Legal Aid clearly states: 33
K. Two-Year Statute of Limitations.
a. A landlord must bring a suit for forcible detainer within two
years of the day the cause of action accrues. Tex. Civ. Prac. & Rem.
Code Ann. §16.003(a) (West Supp. 2012). Political subdivisions, (and
this appears to include public housing authorities), however, are not
barred by the two year limitations period. See Tex. Civ. Prac. & Rem.
Code Ann. § 16.061(a) (West 2008).
b. Each breach of the lease constitutes a separate and independent
cause of action. See Williams v. Le Garage de La Paix, 562 S.W.2d
534, 535 (Tex. Civ. App. -- Houston [14th Dist.] 1978, writ ref'd
n.r.e.) (each month’s rent under a lease constitutes a separate cause of
action).
Fuchs at pg 101 (emphasis added).
The distinction that, in a non-lease forcible detainer case, a new cause of
action is created each new month an occupant is present was most likely created by
paragraph b above, which specifically applies to lease cases only. In the case at
bar, there was no breach of any lease; if there had been a lease agreement in place,
33
Fuchs, Fred, “Forcible Detainer Lawsuits: Issues and Traps for the Unwary,” Updated October
1, 2013, page 101. See http://tjcja.org/resources/evictions.
Appellants’ Brief Pg. 21
the argument that each month a new cause of action accrued each month
Appellants refused to vacate would make more sense. That is not the case.
“[F]or purposes of application of a statute of limitations, a cause of action
generally accrues when a wrongful act affects an injury, regardless of when the
plaintiff learns of such injury...Generally, a cause of action for injury to real
property accrues when the injury is committed.” 34 The general rule is that a cause
of action accrues when a wrongful act effects an injury, regardless of when the
plaintiff learns of such injuries. 35 “When an act invades a legally protected right or
interest, the claim accrues when the act occurs.” The exceptions to this general
rule 36 but those are not present in the case at bar.
Continuing Tort, Inapplicable
A continuing tort involves wrongful conduct inflicted over a period of time
that is repeated until desisted, and each day creates a separate cause of action. Id;
Two Pesos, Inc. v. Gulf Ins. Co., 901 S.W.2d 495, 500 (Tex. App.-- Houston [14th
Dist.] 1995, no writ) (citing Arquette v.Hancock , 656 S.W.2d 627, 629 (Tex.
App.--San Antonio 1983, writ ref'd n.r.e.)). The Texas Supreme Court has "neither
endorsed nor addressed" the continuing tort doctrine, see Creditwatch, Inc. v.
34
Jones v. Texaco, Inc., 945 F. Supp. 1037 – Dist. Court, SD (Texas 1996).
35
Morriss v. Enron Oil & Gas Co., 948 S.W.2d 858 (Tex. App. 1997).
36
If there was fraud, fraudulent concealment, and the discovery rule cases in which the alleged
wrongful act and resulting injury were inherently undiscoverable at the time they occurred. See
Appellants’ Brief Pg. 22
Jackson, 157 S.W.3d 814, 816 n.8 (Tex. 2005), Coinmach Corp. v. Aspenwood
Apt. Corp., 417 S.W.3d 909 (Tex. 2013). The continuing tort doctrine is not the
law in Texas, and even if it was, the doctrine would not apply to the facts of this
case.
In determining whether there is a continuing tort, "care must be taken to
distinguish between 1) repeated injury proximately caused by repetitive wrongful
or tortuous acts and 2) continuing injury arising from one wrongful act. While the
former evinces a continuing tort, the latter does not." Krohn v. Marcus Cable
Assocs., L.P., 201 S.W.3d 876, 881 (Tex. App. 2006) (quoting Rogers, 162
S.W.3d at 290).
The doctrine does not apply to actions that are "complete in themselves;"
rather, it applies to a continuing course of conduct, which, over time, causes injury.
See Twyman v. Twyman, 790 S.W.2d 819, 821 (Tex.App.-Austin 1990) (applying
the continuous tort doctrine when a husband repeatedly urged that his wife's
participation in certain sexual conduct was necessary to save their marriage);
Newton, 895 S.W.2d at 506. In the area of trademarks, a claim is actionable
throughout the period of infringement, and is therefore a "continuous harm." See
Two Pesos, Inc., 901 S.W.2d at 500; See also Roehrs v. Conesys, Inc.,2005 U.S.
Dist. LEXIS 33295, 2005 WL 3454015(N.D. Tex.Dec. 14, 2005).
Computer Assoc. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455-456 (Tex. 1996), Jim Arnold
Appellants’ Brief Pg. 23
Even though several courts of appeals have held that a cause of action for a
continuing tort does not accrue until the defendant's tortuous conduct ceases, those
cases are different from this case. See Coinmach Corp. v. Aspenwood Apt. Corp.,
2013 Tex. LEXIS 953 (Tex. 2013); First Gen. Rlty. Corp. v. Maryland Cas. Co.,
981 S.W.2d 495, 501 (Tex.App.—Austin 1998, pet. denied) Krohn v. Marcus
Cable Assocs., L.P., 201 S.W.3d 876, 880 (Tex. App.-Waco 2006, pet. denied);
Rogers v. Ardella Veigel Inter Vivos Trust, 162 S.W.3d 281, 290 (Tex. App.-
Amarillo 2005, pet. denied); W W Laubach Trust v. The Georgetown Corp., 80
S.W.3d 149, 159 (Tex. App.-Austin 2002, pet. denied); Tectonic Realty Inv. Co. y.
CNA Lloyd's a/Texas Ins. Co. , 812 S.W.2d 647, 654 (Tex. App.--Dallas 1991, writ
denied). All of these cases involve written term leases.
The holdover occupancy of a tenant under a lease contract is different. Each
time a tenant under a lease fails to pay rent gives rise to an independent cause of
action. Williams v. Garage Paix, Inc., 562 S.W.2d 534, 535 (TexCiv.App—
Houston [14 Dist.] 1978). However, this case surrounds a tenant at will or at
sufferance, including the occupant vis-à-vis the purchaser of a substitute trustee
sale. There are no obligations or collaborations between the parties after the
occupant has been given notice to vacate. The adversarial relationship over
possession in this case stems from, arguably making Appellants a tenant at will or
Corp. v. Bishop, 928 S.W.2d 761 (Tex. App. 1996).
Appellants’ Brief Pg. 24
at sufferance, rather than by lease contract. The difference is dispositive. And the
forcible detainer does not cease by the sending of a new notice to vacate.
Appellants’ possession did not cease and was continuous, and thus
Appellants’ noncompliance allegedly inflicted injury on Appellee. Any future
notices to vacate are superfluous and do not reset the clock for the statute of
limitations. This illogical interpretation would result in Appellee controlling the
running of the statute of limitations, which is an absurd result.
Massad, Pham and Puentes Holdings
This Court used flawed reason in refusing to apply the two year statute of
limitations because a forcible-detainer action accrues each time a person refuses
to surrender possession of real property after a person entitled to possession
delivers proper written notification to vacate.37 In Massad, this Court based its
opinion on the Houston’s Court of Appeals opinion in Pham, 38 which in turn
based its opinion on the El Paso Court of Appeals opinion Puentes.39 However,
the Puentes case was not presented with the statute of limitations argument but
discussed res judicata only and should not be applied to statutory interpretation of
37
Montenegro v. Wells Fargo Bank, N.A., No. 03-13-00123-CV, 2015 WL 3543055, at *3
(Tex. App.-Austin June 3, 2015, no pet.); citing Massaad v. Wells Fargo Bank, Nat’l Ass’n,
No. 03-14-00202-CV, 2015 WL 410514, at *1 (Tex. App.-Austin Jan. 30, 2015, no pet.) (each
refusal to surrender possession constitutes new forcible detainer); Pham, 449 S.W.3d at 235-36
(same)
38
Federal Home Loan Mortg. Corp. v. Pham., 449 S.W.3d 230, 235–36 (Tex.App.–Houston
[14th Dist.] 2014, no pet.)
Appellants’ Brief Pg. 25
Texas Civil Practice and Remedies Code §16.003. Puentes is wrongly decided
and contrary to well-established Texas law
Appellee filed their prior forcible detainer case, received an adverse
judgment, and dismissed their appeal. Appellee should not be able to revive or
create a new cause of action, which involves the same parties, same facts, and
same legal issues, by sending a new notice to Appellant. By allowing this, the
Court is completely disregarding the limitations period set out by statute and
leads to absurd results. 40
ISSUE 4: Applying Res judicata.
Res judicata prevents parties and those in privity with them from re-
litigating a case that a competent tribunal has adjudicated to finality. Ingersoll-
Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 206 (Tex. 1999). The doctrine
is intended to curb vexatious litigation and promoting judicial economy. See
Ingersoll-Rand Co., 997 S.W.2d at 207. There is a long line of Texas cases that the
cause of action accrues when the injury occurs, and that a decision on possession in
forcible detainer context is res judicata between the parties. Reese v. Reese, 672
S.W.2d 1, 2 (Tex. Civ. App.—Waco 1984, no writ); Buttery v. Bush, 575 S.W.2d
144, 146 (Tex. Civ. App.—Tyler 1978, writ ref'd n.r.e.).
39
Puentes v. Fannie Mae, 350 S.W.3d 732, 739 (Tex. App. - El Paso 2011, pet. dism‘d)
40
See McKinney v. Blakenship, 282 S.W.2d 69,698 (Tex. 1955).
Appellants’ Brief Pg. 26
Single Action Rule
The single action rule, also known as the rule against splitting claims,
provides a plaintiff one indivisible cause of action for all damages arising from a
defendant's single breach of a legal duty. Pustejovsky v. Rapid-American Corp. v.
Pustejovsky, 35 S.W.3d 643, 646 (Tex.2000), citing Gideon v. Johns-Manville
Sales Corp., 76 1 F.2d 1129, 1136-37 (5th Cir. 1985). This equitable doctrine is a
species of res judicata that prohibits splitting a cause of action and subsequently
asserting claims that should have been litigated (or in the present case were
litigated) in the first instance and prevents more than one suit growing out of the
same subject-matter of litigation and "and our decisions from the first have
steadily fostered this policy." Id. at 647.
If a suit involves the same issue (possession of the Property), the same
property, same parties, and the same date of foreclosure sale, the Court cannot
construe a new set of circumstances exists because a more current notice to
vacate is issued. It is obvious the accrual of action began when the first notice to
vacate issued Appellants refused to vacate the Property. It is at that point in time
when the tenant at sufferance takes on the legal status of forcible detainer. Unless
there is an agreement or some other written concession, the forcible detainer
maintains that legal status until he is dispossessed, his dispossession is barred by
limitations, or he reaches a state of repose. In this case, there is no new owner
Appellants’ Brief Pg. 27
who issued a notice to vacate, it is the same party, Appellee, whose action
accrued at the latest three days after May 3, 2012. Appellee’s prior lawsuit and
the current lawsuit involve the exact same parties, the same issues, and same
cause of action. The only thing that changed from each suit was the date on
Appellee’s Notice to Vacate letter.
PRAYER
WHEREFORE, Appellants respectfully request:
1. That this Court reverse the trial court’s judgment and dismiss the
case, or, in the alternative,
2. That this Court reverse the trial court's judgment and remand the
case for further proceedings, or
3. That this Court reverse the trial court’s judgment in whole or in part
and render the judgment that the trial court should have rendered, and
4. For such other and further relief as this Court deems just and proper.
Respectfully submitted,
By: /s/ Penny Y. Haye
Penny Y. Haye
State Bar No. 24030363
Law Office of Penny Haye
7703 North Lamar Blvd Suite 340
Austin, Texas 78752
Telephone: (512) 677-4293
Facsimile: (512) 777-4535
Penny haye@sbcglobal.net
ATTORNEY FOR APPELLANTS
Appellants’ Brief Pg. 28
CERTIFICATE OF SERVICE
I hereby certify that on this the 23rd day of November 2015, a true and
correct copy of the foregoing was served upon counsel of record for Appellee via
this Court’s online filing system to the following:
Sarah Robbins
Hughs, Watters & Askanase, L.L.P.
Three Water Center
333 Clay, 29th floor
Houston, Texas 77002
ATTORNEY FOR APPELLEE
By: /s/ Penny Y. Haye
Penny Y. Haye
CERTIFICATE OF COMPLIANCE
Relying on the word count function in the word processing software used to
produce this document, I certify that the number of words in this brief (excluding
any caption, identity of parties and counsel, statement regarding oral argument,
table of contents, index of authorities, statement of the case, statement of issues
presented, statement of jurisdiction, statement of procedural history, signature,
proof of service, certification, certificate of compliance, and appendix) is 5,739.
By: /s/ Penny Y. Haye
Penny Y. Haye
Appellants’ Brief Pg. 29
APPENDIX
Appellants’ Brief Pg. 30