James P Arthur v. John Michael Raborn, Blackburne & Brown Mortgage Fund, Inc. ( 2022 )

Opinion issued December 22, 2022
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-21-00072-CV
———————————
JAMES P. ARTHUR, MARY ARTHUR, LEGONITE, INC., PARADISE
LIVING, INC., AND ARTHUR HOLDINGS, L.P., Appellants
V.
JOHN MICHAEL RABORN, Appellee
On Appeal from the 11th District Court
Harris County, Texas
Trial Court Case No. 2020-13849
MEMORANDUM OPINION
Appellants James P. Arthur, Mary Arthur, Legonite, Inc., Paradise Living,
Inc., and Arthur Holdings, L.P. (collectively, “the Arthur parties”) own a parcel of
property that they use to operate an assisted living facility. The Arthur parties sued
their lender, Blackburne & Brown Mortgage Fund I, and appellee John Michael
Raborn, the substitute trustee named in the deed of trust securing the property, and
asserted claims for affirmative relief and injunctive relief. Raborn moved to dismiss
the claims against him under Property Code section 51.007(a), arguing that he had a
reasonable belief that he had been named as a party solely in his capacity as a trustee
under a deed of trust. The trial court granted the motion and dismissed the Arthur
parties’ claims against Raborn without prejudice.
On appeal, the Arthur parties argue that the trial court erred by (1) using an
unauthorized procedure to dismiss the claims against Raborn; (2) granting Raborn’s
motion to dismiss because the motion was substantively deficient and did not comply
with any applicable laws or rules; and (3) denying the Arthur parties’ motion to sever
the claims against Raborn after granting his motion to dismiss. We affirm.
Background
James and Mary Arthur purchased a parcel of property in southwest Houston
sometime before 2006. At the time of purchase, a sixteen-unit condominium
complex was located on the property. The Arthurs decided to renovate the building
and convert it to an assisted living facility. To accomplish this goal, the Arthurs
sought third-party financing and eventually entered into a loan agreement with
Blackburne & Brown Mortgage Fund I (“Blackburne”). Raborn was named
substitute trustee under the deed of trust securing the loan.
2
In late 2015, Raborn, as trustee and on behalf of Blackburne, sent letters to
the Arthur parties notifying them that they had not complied with their payment
obligations under the loan. Blackburne then initiated foreclosure proceedings. The
Arthur parties sued Blackburne in 2016 and asserted claims for wrongful
foreclosure. The trial court granted a temporary restraining order prohibiting
foreclosure of the property.
After a court-supervised mediation, the Arthur parties and Blackburne entered
into a Settlement Agreement in 2016. Among other rights and responsibilities, the
Settlement Agreement set out a schedule for the Arthur parties’ payment obligations
to Blackburne. The parties also drafted a conditional Agreed Final Judgment that
would only be filed with the court if the Arthur parties did not comply with the
payment obligations set out in the Settlement Agreement. The Agreed Final
Judgment authorized foreclosure of the property and provided different amounts of
liquidated damages to Blackburne depending on when the Agreed Final Judgment
was filed with the court.
The signing of the Settlement Agreement did not end the disputes between the
Arthur parties and Blackburne. The Arthur parties alleged that they repeatedly
requested an accounting and payoff balance statement from Blackburne so they
could pay off the entire remaining obligation, but Blackburne did not cooperate.
3
After the Arthur parties did not make a payment required by the Settlement
Agreement, Blackburne filed the Agreed Final Judgment with the trial court.
The Arthur parties filed additional lawsuits against Blackburne, including a
suit filed in 2018 and a suit filed in 2019. Raborn was not named as a defendant in
these lawsuits.
Blackburne initiated foreclosure proceedings against the property in
November 2019. The Arthur parties obtained a temporary restraining order
prohibiting sale of the property. They alleged that Blackburne disregarded this order
and foreclosed anyway.
The Arthur parties filed the underlying lawsuit against Blackburne and
Raborn in March 2020, after Blackburne initiated foreclosure proceedings against
other properties owned by the Arthur parties.1 In this lawsuit, the Arthur parties
alleged that Raborn was acting as trustee for Blackburne. The Arthur parties asserted
claims for breach of the Settlement Agreement, breach of the Agreed Final
1
In their answer, Raborn and Blackburne alleged that a federal bankruptcy court in a
prior proceeding involving Mary Arthur had ruled that her bankruptcy petition was
part of a scheme “to delay, hinder, and defraud Blackburne,” a secured creditor of
Arthur. The bankruptcy court also ruled that Blackburne was “permitted to pursue
its state law remedies” against several named properties in addition to the property
that secured the original loan, “including foreclosure and/or eviction.” The
properties named in the bankruptcy court’s order included the properties at issue in
the underlying lawsuit.
4
Judgment, fraud, and wrongful foreclosure. The Arthur parties also sought injunctive
relief enjoining the foreclosure sale of their other properties.
Raborn and Blackburne filed an answer.2 Raborn pleaded that he was not a
necessary party to the lawsuit because he was not a party to either the Settlement
Agreement or the Agreed Final Judgment. Instead, Raborn had a reasonable belief
that he had been sued solely in his capacity as substitute trustee under the deed of
trust securing the property. Although this pleading was not verified, Raborn
submitted an unsworn declaration in which he declared under penalty of perjury that
the facts stated in the answer were true and correct.
In May 2020, Raborn filed a motion to dismiss the Arthur parties’ claims
against him pursuant to Property Code section 51.007. This statute sets out a
dismissal procedure for trustees who are not necessary parties because they have
been sued solely in their capacity as trustee under a deed of trust. See TEX. PROP.
CODE § 51.007(a)–(d). Raborn argued that he properly alleged in his answer that he
had a reasonable belief he had been sued solely in his capacity as trustee, and the
Arthur parties failed to file a timely verified response rebutting that pleading. Raborn
requested that the trial court dismiss the claims against him without prejudice.
2
Blackburne also asserted affirmative claims for breach of contract and fraud against
the Arthur parties.
5
The trial court granted Raborn’s motion on July 13, 2020, and dismissed the
Arthur parties’ claims against him without prejudice.
The Arthur parties moved for reconsideration of the trial court’s dismissal
order. On December 8, 2020, the trial court denied the Arthur parties’ motion for
reconsideration.
Following the trial court’s denial of the motion for reconsideration, the Arthur
parties moved to sever their claims against Raborn into a separate lawsuit. At this
time, the underlying proceeding had been consolidated with the Arthur parties’
lawsuits against Blackburne filed in 2018 and 2019. The Arthur parties’ claims
against Blackburne in all three lawsuits, as well as Blackburne’s claims against the
Arthur parties in the underlying proceeding, all remained pending. Raborn opposed
severance of the claims against him.
The trial court denied the Arthur parties’ motion to sever on January 5, 2021.
The Arthur parties filed a notice of appeal from this order, and the case was assigned
appellate cause number 01-21-00072-CV. Raborn is the only appellee in this
appeal.3 Several months after this appeal was filed, the trial court signed a final
3
Because the trial court denied the Arthur parties’ motion to sever and did not sever
the claims against Raborn into a separate lawsuit, the July 13 dismissal order, the
December 8 order denying reconsideration, and the January 5 order denying
severance were not final judgments. See In re Guardianship of Jones, 629 S.W.3d
921, 924 (Tex. 2021) (per curiam) (stating that in cases in which judgment has been
rendered without conventional trial on merits, judgment is not final unless it
(1) actually disposes of all pending claims and parties, or (2) clearly and
6
judgment in the consolidated case. In the final judgment, the trial court dismissed
the Arthur parties’ claims against Blackburne and awarded Blackburne actual
damages and sanctions.
Dismissal of Claims Against Raborn
In their first issue, the Arthur parties argue that the trial court erred by
dismissing the claims against Raborn because the court did not use either of the
dismissal procedures authorized by the Rules of Civil Procedure: dismissal pursuant
to Rule 91a or dismissal on a motion for summary judgment. In their second issue,
the Arthur parties argue that Raborn’s motion to dismiss was substantively defective
and “did not comply with the applicable laws and rules.”
unequivocally states that it finally disposes of all claims and parties, even if it does
not actually do so). Generally, with a few mostly statutory exceptions, a party may
take an appeal only from a final judgment. Elec. Reliability Council of Tex., Inc. v.
Panda Power Generation Infrastructure Fund, LLC, 619 S.W.3d 628, 632 (Tex.
2021). When we receive a notice of appeal in a civil case before the trial court
renders a final judgment, we may treat the case as a prematurely filed appeal and
permit the defect to be cured. Fusion Indus., LLC v. Edgardo Madrid & Assocs.,
LLC, 624 S.W.3d 843, 849 (Tex. App.—El Paso 2021, no pet.); TEX. R. APP. P.
27.1(a). If the trial court renders a final judgment before we dismiss a prematurely
filed notice of appeal, the jurisdictional defect is cured, and we treat the notice of
appeal “as having been filed on the day of the trial court’s final judgment.” Fusion
Indus., 624 S.W.3d at 849. Here, the Arthur parties filed a notice of appeal from an
interlocutory order. While this appeal has been pending, however, the trial court
signed a final judgment on May 15, 2021, that disposes of all claims and all parties.
We therefore deem the Arthur parties’ premature notice of appeal as filed on the
date of the final judgment, and we conclude that we have appellate jurisdiction over
this appeal. See id. (“To the extent Fusion’s notice of appeal was premature, the
later rendition of a final judgment in the trial court cured any defect.”); Espalin v.
Child.’s Med. Ctr. of Dallas, 27 S.W.3d 675, 681 (Tex. App.—Dallas 2000, no pet.)
(“[A] document filed in an attempt to appeal an interlocutory order that later
becomes final serves to appeal the final judgment.”).
7
A. Standard of Review and Governing Law
Property Code section 51.007(a) provides a procedural mechanism for a
trustee under a deed of trust to seek dismissal from a lawsuit. Cantor v. Wachovia
Mortg., FSB, 641 F. Supp. 2d 602, 611 (N.D. Tex. 2009). Pursuant to that section, a
trustee named in a lawsuit “may plead in the answer that the trustee is not a necessary
party by a verified denial stating the basis for the trustee’s reasonable belief that the
trustee was named as a party solely in the capacity as a trustee under a deed of trust,
contract lien, or security instrument.” TEX. PROP. CODE § 51.007(a); Freezia v. IS
Storage Venture, LLC, 474 S.W.3d 379, 384 n.1 (Tex. App.—Houston [14th Dist.]
2015, no pet.).
Within 30 days after the trustee files the verified denial, a verified response is
due from “all parties” to the lawsuit “setting forth all matters, whether in law or fact,
that rebut the trustee’s verified denial.” TEX. PROP. CODE § 51.007(b); Freezia, 474
S.W.3d at 384 n.1. If a party does not have an objection or fails to file a timely
verified response to the trustee’s verified denial, “the trustee shall be dismissed from
the suit or proceeding without prejudice.” TEX. PROP. CODE § 51.007(c); Freezia,
474 S.W.3d at 384 n.1; see WAMCO XXVIII, Ltd. v. Casa Grande Cotton Fin. Co.,
314 F. Supp. 2d 655, 657 (N.D. Tex. 2004) (dismissing claims against substitute
trustee under section 51.007 after plaintiff failed to file verified response to trustee’s
answer containing verified denial).
8
If a party files a timely verified response to the trustee’s verified denial, the
trial court shall set the matter for hearing. TEX. PROP. CODE § 51.007(d). “The court
shall dismiss the trustee from the suit or proceeding without prejudice if the court
determines that the trustee is not a necessary party.” Id.
Whether a defendant is entitled to dismissal under the facts alleged is a legal
question that we review de novo. See In re Farmers Tex. Cnty. Mut. Ins. Co., 621
S.W.3d 261, 266 (Tex. 2021) (orig. proceeding) (considering dismissal under Rule
of Civil Procedure 91a); see also City of Dallas v. Sanchez, 494 S.W.3d 722, 724
(Tex. 2016) (per curiam) (stating that rulings pursuant to Rule 91a are reviewed de
novo “because the availability of a remedy under the facts alleged is a question of
law”); Marsh USA Inc. v. Cook, 354 S.W.3d 764, 768 (Tex. 2011) (stating that courts
review de novo issues of statutory construction and “application of the law to
undisputed facts in summary judgments”).
B. Analysis
1. Whether Raborn Used an Authorized Dismissal Procedure
In this case, the Arthur parties filed suit against Blackburne and Raborn on
March 2, 2020, and asserted claims relating to foreclosure proceedings. The Arthur
parties alleged in their original petition that Raborn represented Blackburne as its
attorney and that Raborn was a trustee under a deed of trust. The allegations
9
described the Arthur parties’ relationship with Blackburne, which dated back at least
to 2006 and concerned a property in southwest Houston.
Specifically with respect to Raborn, the Arthur parties alleged that
Blackburne, beginning in December 2015, “caused its co-Defendant Attorney John
M. Raborn to start sending to Arthurs a series of letters alleging non-payment or late
payment of mortgage and taxes to Harris County Tax Office.” During a prior lawsuit
that the Arthur parties initiated against Blackburne in 2016 related to attempts to
foreclose on the property, Raborn represented Blackburne at court-ordered
mediation. A later court-supervised mediation resulted in the Settlement Agreement
and the conditional Agreed Final Judgment. The Arthur parties also alleged that after
they obtained a temporary restraining order enjoining Blackburne from foreclosing
on the property in 2019, Raborn informed the Arthur parties’ counsel that “he would
still proceed with the Restrained Foreclosure” and he did foreclose on the property.
The Arthur parties asserted four claims for affirmative relief: breach of the
Settlement Agreement; breach of the Agreed Final Judgment; fraud or
misrepresentation; and wrongful foreclosure of the property. The Arthur parties also
sought injunctive relief to prohibit Blackburne and Raborn from foreclosing upon
other properties owned by the Arthur parties.
On March 23, 2020, Blackburne and Raborn filed an answer and asserted
counterclaims. In this filing, they alleged:
10
To the extent there is dispute between the Arthur Parties and
Blackburne that is not precluded by law and/or asserted defenses,
Raborn is not a necessary party to this lawsuit. Raborn is not a party to
the Settlement Agreement or Agreed Final Judgment. Raborn has a
reasonable belief that he is named in this lawsuit solely in his capacity
as a substitute trustee under the deed of trust dated February 16, 2016
that secured the promissory note dated February 16, 2016 that
memorialized a loan by Blackburne to Arthur P. Holding, LP in the
original principal amount of $1,225,000.00. That deed of trust gave
Blackburne a security interest in the Beechnut Property. Upon Arthur
P. Holdings, LP’s failure to satisfy its obligations pursuant to the deed
of trust and promissory note, Blackburne appointed Raborn as
substitute trustee and directed him to foreclose the Beechnut Property.
Ultimately, such foreclosure did not occur but the Beechnut Property
was subsequently sold via a constable’s sale pursuant to the Agreed
Final Judgment. In addition, pursuant to section 51.007 of the Texas
Property Code, a trustee shall not be liable for any good faith error
resulting from reliance on any information in law or fact provided by
the mortgagor or mortgagee. Similarly, a trustee may not be held to the
obligations of a fiduciary of the mortgagor or mortgagee.
Although this denial was not verified, the answer was accompanied by an unsworn
declaration from Raborn. Raborn declared, under penalty of perjury, that the facts
stated in the answer were true and correct.
On May 15, 2020, more than 30 days after Raborn filed the denial contained
in his answer, he moved to dismiss the Arthur parties’ claims against him under
Property Code section 51.007. Raborn argued that he was not a necessary party to
the lawsuit and that he had been sued solely in his capacity as substitute trustee under
the deed of trust securing the loan in favor of Blackburne. He further argued that the
Arthur parties were required to file a verified response by April 22, 2020, but they
failed to do so. He requested that the trial court dismiss the claims against him
11
without prejudice. The trial court granted Raborn’s motion to dismiss, finding that
the Arthur parties failed to file a timely verified response and that Raborn was named
as a party to the lawsuit solely in his capacity as a trustee under a deed of trust.
On appeal, the Arthur parties argue that the trial court’s dismissal of the claims
against Raborn was improper in part because the court did not use a dismissal
procedure authorized by the Rules of Civil Procedure, such as dismissal pursuant to
Rule 91a or the summary judgment procedure. See TEX. R. CIV. P. 91a (setting out
procedure for dismissal of claims on grounds that claims have no basis in law or
fact); TEX. R. CIV. P. 166a (setting out procedure for traditional and no-evidence
motions for summary judgment). The Arthur parties are correct that Raborn’s motion
to dismiss does not meet the procedural requirements of either Rule 91a or Rule
166a. However, Property Code section 51.007 sets out a procedure by which a
trustee under a deed of trust may move for dismissal of certain claims asserted
against him. See TEX. PROP. CODE § 51.007(a)–(d); Cantor, 641 F. Supp. 2d at 611;
Freezia, 474 S.W.3d at 384 n.1.
The Arthur parties do not address section 51.007 in their brief or argue that
Raborn’s motion to dismiss does not meet the requirements of section 51.007. We
therefore conclude that although Raborn did not move for dismissal of the claims
against him pursuant to Rule 91a or the summary judgment procedure, he utilized a
dismissal mechanism that is authorized under Texas law. See TEX. PROP. CODE
12
§ 51.007(a)–(d). The trial court, therefore, did not use an unauthorized procedure to
dismiss the claims against Raborn.4
The Arthur parties also argue in their first issue that the motion to dismiss
“was not properly before the trial court when the order to dismiss was signed by the
trial judge.” They point out that, in late June 2020, their counsel had filed a notice
with the trial court that he would not be available for court proceedings until early
August 2020 due to health reasons. They also point to an email from the trial court’s
coordinator stating that a hearing scheduled for July 13 had “been passed” and that
the Arthur parties’ counsel “will need to be present for the hearing.” The trial court
signed the order dismissing the claims against Raborn on July 13.
We first note that the email from the court coordinator, which was part of an
exchange between the coordinator and Raborn, reflects the cause number for the
2019 case between the Arthur parties and Blackburne, not the 2020 case that also
involved Raborn. At the time of this email exchange, the 2019 and 2020 cases had
not been consolidated yet. Later emails reflected that the passed hearing was a status
conference hearing for the 2019 case, a hearing which required the presence of the
4
The Arthur parties also argue that although Blackburne and Raborn’s answer
contained special exceptions, the trial court did not follow the procedure for granting
special exceptions and instead dismissed Raborn from the lawsuit. The Arthur
parties cite no authority requiring the trial court to rule on the special exceptions
before ruling on Raborn’s motion to dismiss. We further note that dismissal pursuant
to section 51.007 is specifically required to be without prejudice. See TEX. PROP.
CODE § 51.007(c)–(d).
13
Arthur parties’ counsel. The hearing would be rescheduled once counsel was
available.
Additionally, we note that section 51.007 only requires a hearing if the
respondent “files a timely verified response to the trustee’s verified denial.” See id.
§ 51.007(d) (providing that under such circumstances “the matter shall be set for
hearing”). The statute is silent about the necessity of a hearing when the respondent
does not file a timely verified response. Id. § 51.007(c) (“If a party has no objection
or fails to file a timely verified response to the trustee’s verified denial, the trustee
shall be dismissed from the suit or proceeding without prejudice.”); see Cadena
Comercial USA Corp. v. Tex. Alcoholic Beverage Comm’n, 518 S.W.3d 318, 325–
26 (Tex. 2017) (“We presume the Legislature chooses a statute’s language with care,
including each word chosen for a purpose, while purposefully omitting words not
chosen. In that vein, we take statutes as we find them and refrain from rewriting the
Legislature’s text.”) (internal quotations and citations omitted). The Arthur parties
did not file a timely verified response to Raborn’s denial pleaded in his answer.
Because the Arthur parties did not file a verified response to Raborn’s denial,
the trial court was not statutorily required to hold a hearing on Raborn’s motion to
dismiss. We hold that the trial court did not use an unauthorized procedure when it
dismissed the claims against Raborn pursuant to Property Code section 51.007.
We overrule the Arthur parties’ first issue.
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2. Whether Raborn’s Motion to Dismiss Was Substantively Deficient
The Arthur parties argue that Raborn’s motion to dismiss was substantively
deficient because it was based on Raborn’s “beliefs,” which is not a sufficient basis
to grant a dispositive motion. Section 51.007(a), however, specifically provides that
a trustee may plead in his answer that he is not a necessary party to the lawsuit by a
verified denial “stating the basis for the trustee’s reasonable belief that the trustee
was named as a party solely in the capacity as a trustee under a deed of trust, contract
lien, or security instrument.” TEX. PROP. CODE § 51.007(a) (emphasis added). The
statute allows the plaintiff to file a verified response and set “forth all matters,
whether in law or fact, that rebut the trustee’s verified denial.” Id. § 51.007(b). If, as
here, the plaintiff does not timely respond, “the trustee shall be dismissed from the
suit or proceeding without prejudice.” Id. § 51.007(c).
Here, Raborn pleaded in his answer that he was not a necessary party to the
lawsuit, noting that he was not a party to either the Settlement Agreement or the
Agreed Final Judgment. Instead, he reasonably believed that he was named as a party
solely in his capacity as substitute trustee under the deed of trust securing the
property. He pleaded that Blackburne named him as substitute trustee and directed
him to initiate foreclosure proceedings on the property after the Arthur parties
allegedly breached their obligations under the Settlement Agreement and Agreed
Final Judgment. The statutory language requires only that the trustee, in his verified
15
denial, state the basis for his reasonable belief that he was named as a party solely
in his capacity as trustee.5 Id. § 51.007(a). Raborn did so here. Under this particular
statutory scheme, Raborn’s denial was not deficient because it was based on his
“belief.”
The Arthur parties also contend that Raborn’s presence in the lawsuit was
required to afford them complete relief, arguing that “[i]t was [Raborn’s] churning
of legal work and bills beginning in 2014 which precipitated these lawsuits.” The
Arthur parties, however, made no allegations concerning Raborn’s attorney’s fees
or billing practices in their original petition. Their petition contains few references
to Raborn by name, and those references make clear that Raborn was acting in his
5
To the extent the Arthur parties argue that Raborn’s denial was substantively
deficient because it was not verified, we note that Raborn supported the pleading in
the answer with his unsworn declaration. He declared under penalty of perjury that
the facts contained in the answer were true and correct. An unsworn declaration may
be used “in lieu of a written sworn declaration, verification, certification, oath, or
affidavit required by statute or required by a rule, order, or requirement adopted as
provided by law.” TEX. CIV. PRAC. & REM. CODE § 132.001(a); Gillis v. Harris
Cnty., 554 S.W.3d 188, 192 (Tex. App.—Houston [14th Dist.] 2018, no pet.). Such
a declaration must be in writing and must be subscribed as true under penalty of
perjury. Baylor Scott & White v. Project Rose MSO, LLC, 633 S.W.3d 263, 291
(Tex. App.—Tyler 2021, pet. denied); Gillis, 554 S.W.3d at 193 (stating that “key”
to unsworn declaration is that it is signed under penalty of perjury); TEX. CIV. PRAC.
& REM. CODE § 132.001(c) (requiring unsworn declaration to be in writing and
subscribed as true under penalty of perjury), (d) (requiring unsworn declaration to
contain jurat in substantially same form as shown in statute). Raborn’s unsworn
declaration was in writing, signed, and made under penalty of perjury. This
declaration complies with section 132.001 and may therefore be used in lieu of a
verification. See TEX. CIV. PRAC. & REM. CODE § 132.001(a), (c), (d).
16
capacity as trustee under the deed of trust. The Arthur parties do not assert any claims
against Raborn that are independent from his actions as trustee.
Moreover, all the Arthur parties’ claims stem from the alleged wrongful
foreclosure of the property and their attempts to prevent Blackburne from
foreclosing on other properties that they own. Federal district courts interpreting
section 51.007 have held that trustees are “nominal” parties in suits for wrongful
foreclosure and that a trustee named solely in that capacity is not a necessary party
in a suit to prevent foreclosure. See Fairport Ventures, LLC v. Long as Tr. for U.S.
Bank Nat’l Ass’n, No. H-21-2347, 2021 WL 4267175, at *2 (S.D. Tex. Sept. 20,
2021); Eisenberg v. Deutsche Bank Tr. Co. Ams., No. SA-11-CV-384-XR, 2011 WL
2636135, at *4 (W.D. Tex. July 5, 2011); see also TEX. PROP. CODE § 51.007(e) (“A
dismissal of the trustee pursuant to Subsections (c) and (d) shall not prejudice a
party’s right to seek injunctive relief to prevent the trustee from proceeding with a
foreclosure sale.”).
Finally, the Arthur parties argue that dismissal based on their failure to file a
verified response to Raborn’s denial was improper because at the time their response
was due, a Texas Supreme Court Emergency Order relating to the COVID-19
pandemic was in effect that suspended filing deadlines. We disagree that the trial
court’s order granting Raborn’s motion to dismiss violated the applicable
Emergency Order.
17
Section 51.007(b) provides that “[w]ithin 30 days after the filing of the
trustee’s verified denial, a verified response is due from all parties to the suit or
proceeding setting forth all matters, whether in law or fact, that rebut the trustee’s
verified denial.” TEX. PROP. CODE § 51.007(b). If the respondent does not file a
timely verified response, “the trustee shall be dismissed from the suit or proceeding
without prejudice.” Id. § 51.007(c). Raborn filed his denial on March 23, 2020. The
Arthur parties’ response was therefore due thirty days later, or by April 22, 2020.
In response to the COVID-19 pandemic, the Texas Supreme Court has issued
a series of Emergency Orders relating to the conduct of court proceedings. The
court’s First Emergency Order Regarding the COVID-19 State of Disaster, signed
on March 13, 2020, provided, in relevant part:
2. Subject only to constitutional limitations, all courts in Texas may
in any case, civil or criminal—and must to avoid risk to court
staff, parties, attorneys, jurors, and the public—without a
participant’s consent:
a. Modify or suspend any and all deadlines and procedures,
whether prescribed by statute, rule, or order, for a stated
period ending no later than 30 days after the Governor’s
state of disaster has been lifted; . . . .
See 596 S.W.3d 265, 265 (Tex. 2020) (Order) (effective March 13, 2020) (emphasis
added). In the First Emergency Order, the Texas Supreme Court did not, as the
Arthur parties appear to argue, automatically suspend all deadlines in all cases.
Instead, this Emergency Order gave trial courts broad discretion to modify or
18
suspend any deadlines and procedures prescribed by statute, rule, or order. See Kim
v. Ramos, 632 S.W.3d 258, 269–70 (Tex. App.—Houston [1st Dist.] 2021, no pet.)
(construing similar language in Texas Supreme Court’s Twenty-Ninth Emergency
Order).
The First Emergency Order was in effect at the time Raborn filed his answer,
which contained his pleading that the Arthur parties had sued him solely in his
capacity as trustee under the deed of trust. The trial court therefore had the authority
to modify or suspend the Arthur parties’ 30-day response deadline. However, the
Arthur parties point to no evidence in the appellate record that the trial court did so.
The Arthur parties argue that the trial court issued an abatement order on March 20,
2020, but there is no indication that this abatement order was issued in the underlying
proceeding. The appellate record does not contain an abatement order. The trial
court’s docket sheet for this proceeding contains no entry on March 20, 2020, and
does not reference the entry of an abatement order at any point during the pendency
of the proceeding. Instead, the email exchange between the trial court coordinator
and Raborn, discussed above, indicates that the abatement order was issued in the
2019 case between the Arthur parties and Blackburne.
We conclude that the Arthur parties have not demonstrated that the trial court,
by granting Raborn’s motion to dismiss in part because the Arthur parties did not
timely file a verified response, violated any order of the Texas Supreme Court or
19
another order of the trial court. We further conclude that Raborn’s motion to dismiss
pursuant to Property Code section 51.007 was not substantively deficient.
We overrule the Arthur parties’ second issue.
Denial of Motion to Sever
In their third issue, the Arthur parties argue that the trial court abused its
discretion by denying the motion to sever their claims against Raborn into a separate
cause number, which would have made the trial court’s order dismissing those
claims a final judgment.
Rule of Civil Procedure 41 provides that “[a]ny claim against a party may be
severed and proceeded with separately.” TEX. R. CIV. P. 41. “A severance divides
the lawsuit into two or more separate and independent causes.” In re United Fire
Lloyds, 327 S.W.3d 250, 254 (Tex. App.—San Antonio 2010, orig. proceeding); see
Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 383 (Tex. 1985)
(“A severance splits a single suit into two or more independent actions, each action
resulting in an appealable final judgment.”).
A claim is properly severable if (1) the controversy involves more than one
cause of action; (2) the severed claim would be the proper subject of a lawsuit if
independently asserted; and (3) the severed claim is not so interwoven with the
remaining action that they involve the same facts and issues. In re State, 355 S.W.3d
611, 614 (Tex. 2011) (orig. proceeding); F.F.P. Operating Partners, L.P. v. Duenez,
20
237 S.W.3d 680, 693 (Tex. 2007) (quoting Guar. Fed. Sav. Bank v. Horseshoe
Operating Co., 793 S.W.2d 652, 658 (Tex. 1990)). We review a trial court’s order
on a motion to sever for an abuse of discretion. F.F.P. Operating Partners, 237
S.W.3d at 693; Liberty Nat’l Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex. 1996)
(orig. proceeding) (“Severance of claims under the Texas Rules of Civil Procedure
rests within the sound discretion of the trial court.”).
The trial court granted Raborn’s motion to dismiss on July 13, 2020. This
ruling dismissed the claims against Raborn without prejudice, but the Arthur parties’
claims against Blackburne remained pending. The Arthur parties filed a motion for
reconsideration of the court’s dismissal order.
While the Arthur parties’ motion for reconsideration was pending, the trial
court granted Blackburne’s motion to consolidate the underlying suit with the two
previous suits that the Arthur parties had filed against Blackburne. These lawsuits
did not contain any claims asserted against Raborn. Thus, at the time the trial court
consolidated the three cases, the only claims asserted against Raborn had been
dismissed.
On December 8, 2020, the trial court denied the Arthur parties’ motion for
reconsideration. Ten days later, the Arthur parties moved to sever the claims against
Raborn into a separate cause number. The Arthur parties argued that the order
denying reconsideration was a final order or judgment with respect to Raborn, and a
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severance would “permit\allow the removal of Defendant Raborn from the case.”
Raborn responded to this motion and opposed severance.
The trial court denied the Arthur parties’ motion to sever on January 5, 2021.
The Arthur parties filed a notice of appeal from this order on February 5, 2021. On
May 15, 2021, while this appeal against Raborn was pending, the trial court signed
a final judgment disposing of the remaining claims between the Arthur parties and
Blackburne in the three consolidated cases.
Texas courts have held that severing a claim after a dispositive ruling on that
claim to expedite appellate review is not an abuse of discretion. See Cherokee Water
Co. v. Forderhause, 641 S.W.2d 522, 525–26 (Tex. 1982) (concluding that
severance of deed-reformation claim after trial court granted summary judgment on
declaratory judgment claim, “apparently in an effort to expedite appellate review of
the declaratory judgment action,” did not constitute abuse of discretion); Dorsey v.
Raval, 480 S.W.3d 10, 15 (Tex. App.—Corpus Christi–Edinburg 2015, no pet.)
(holding that trial court did not abuse its discretion by severing claims against
particular defendant because, at time severance occurred, all claims against
defendant had been dismissed by summary judgment).
Conversely, this Court has held that no authority limits a trial court’s
discretion and requires it to sever a claim after the trial court issues an interlocutory
dispositive ruling on the claim. Marshall v. Harris, 764 S.W.3d 34, 35 (Tex. App.—
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Houston [1st Dist.] 1989, orig. proceeding) (per curiam) (concluding that relator did
not demonstrate he was entitled to mandamus relief when trial court denied motion
to sever claims asserted by relator after court granted interlocutory summary
judgment in favor of defendant on relator’s claims); In re De La Cerda, No. 12-12-
00149-CV, 2013 WL 451830, at *3 (Tex. App.—Tyler Feb. 6, 2013, orig.
proceeding [mand. denied]) (mem. op.) (declining to grant mandamus relief when
trial court refused to sever claims resolved by interlocutory default judgment). We
further stated that no authority holds that a trial court abuses its discretion by denying
a motion to sever claims “resolved by an interlocutory summary judgment that
delays the movant’s appeal.” Marshall, 764 S.W.2d at 35.
Even if the trial court erred by denying the Arthur parties’ motion to sever the
claims against Raborn, we conclude that this ruling does not constitute reversible
error. The trial court disposed of the claims against Raborn when it granted Raborn’s
motion to dismiss in July 2020, and it reaffirmed that dismissal when it denied the
Arthur parties’ motion for reconsideration in December 2020.
Denying the motion to sever—and keeping the claims against Raborn in the
consolidated case even though no further actions needed to be taken with respect to
those claims—could have potentially delayed the Arthur parties’ seeking of
appellate remedies against Raborn. However, the Arthur parties filed a notice of
appeal from the order denying the motion to sever—resulting in this appeal—even
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though the order denying the motion to sever was interlocutory and not appealable.
The Arthur parties thus began the appellate process on their claims against Raborn,
albeit prematurely. The trial court then signed a final judgment disposing of all
claims and all parties in the case approximately three months after the Arthur parties
filed their notice of appeal. The signing of the final judgment cured the jurisdictional
defect arising from the prematurely filed notice of appeal. See Fusion Indus., LLC v.
Edgardo Madrid & Assocs., LLC, 624 S.W.3d 843, 849 (Tex. App.—El Paso 2021,
no pet.); TEX. R. APP. P. 27.1(a).
The trial court’s denial of the Arthur parties’ motion to sever did not probably
cause the rendition of an improper judgment, nor did it prevent the Arthur parties
from properly presenting their case to this Court. See TEX. R. APP. P. 44.1(a) (stating
standard for reversible error in civil cases). Moreover, the only parties to this appeal
are the Arthur parties as appellants and Raborn as the sole appellee. The only other
issues in this appeal are whether the trial court properly dismissed the claims against
Raborn; the merits of the trial court’s dismissal of the Arthur parties’ claims against
Blackburne are not at issue in this appeal. Thus, even if the trial court erred by
denying the Arthur parties’ motion to sever, remanding the case to the trial court and
ordering the court to grant the motion to sever would serve no practical effect. See
Meeker v. Tarrant Cnty. Coll. Dist., 317 S.W.3d 754, 759 (Tex. App.—Fort Worth
2010, pet. denied) (“An issue may become moot when a party seeks a ruling on some
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matter that, when rendered, would not have any practical legal effect on a then-
existing controversy.”). We therefore hold that the trial court’s denial of the Arthur
parties’ motion to sever did not constitute reversible error.
We overrule the Arthur parties’ third issue.
Conclusion
We affirm the judgment of the trial court.
April L. Farris
Justice
Panel consists of Justices Goodman, Countiss, and Farris.
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