Freddy Wirt v. LaBelleCo Fab, LLC ( 2024 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-22-00099-CV
__________________
FREDDY WIRT, Appellant
V.
LABELLECO FAB, LLC, Appellee
__________________________________________________________________
On Appeal from the County Court at Law No. 1
Jefferson County, Texas
Trial Cause No. 130,563
__________________________________________________________________
MEMORANDUM OPINION
The underlying dispute between appellant Freddy Wirt (“Wirt”) and appellee
LaBelleCo Fab, LLC (“LaBelleCo”) arises from an interpleader action. Plant &
Machinery, Inc. (“P&M”) interpleaded $35,000.00 in proceeds from an auction held
by its client Wirt. LaBelleCo claimed that because it had a final money judgment
and a writ of execution, it was entitled to the auction proceeds to satisfy the
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judgment; however, Wirt claimed he was entitled to the proceeds as a bona fide
purchaser for value with no notice of the property being encumbered by a judgment.
Wirt subsequently made claims against LaBelleCo for declaratory judgment,
recovery of attorney’s fees, release of funds on deposit in the registry of the court,
as well as tortious interference with a contract. LaBelleCo made a third-party claim
against Wirt under Chapter 24 of the Texas Business & Commerce Code, for fraud,
constructive fraud, and under the Uniform Fraudulent Transfer Act.
The parties filed competing motions for summary judgment. The trial court
signed an interlocutory order granting LaBelleCo’s traditional motion for summary
judgment and denying Wirt’s motion for summary judgment and release of funds on
deposit in the court’s registry. In a final judgment, the trial court ordered the
$35,000.00 in the court’s registry be made payable to LaBelleCo and awarded
LaBelleCo attorney’s fees.
Wirt challenges the trial court’s rendition of a summary judgment in favor of
LaBelleCo. In three issues, Wirt argues the trial court erred (1) in granting judgment
in favor of LaBelleCo and against Wirt; (2) in failing to determine that Wirt is a bona
fide purchaser in good faith and for fair value without actual or constructive notice
of outstanding equity or an adverse interest or title and is entitled to the auction
proceeds on deposit in the registry of the court; and (3) in failing to render judgment
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against LaBelleCo for tortious interference with a contract. As discussed more fully
below, we conclude the trial court erred in granting LaBelleCo’s motion for
summary judgment and in denying Wirt’s claim that he was a bona fide purchaser
of the property at issue. Therefore, we reverse the trial court’s judgment for
LaBelleCo and render the judgment the trial court should have rendered to require
that the proceeds that were placed in the court’s registry be released to Wirt.
Background
On or about August 23, 2016, Howard Hilborn (“Hilborn”) sold to Gator
Specialty Services, LLC, (“Gator”) three tracts of real property in Harris County,
Texas, more commonly known as 2859 Westside Drive, Pasadena, Texas (the “Real
Property”) in exchange for cash and a promissory note in the original principal
amount of $866,250.00. The note was secured by a first and superior vendor’s lien
retained in a special warranty deed with vendor’s lien and by a first lien deed of trust,
both filed on August 24, 2016, in the Harris County real property records.
After Gator defaulted on the note, Hilborn foreclosed upon and acquired
Gator’s interest in and to the Real Property by virtue of a foreclosure sale deed dated
January 2, 2018, which was filed the same day in the Harris County real property
records. The foreclosure sale amount was $1,027,000.00.
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On January 9, 2018, the County Court at Law No. 1 of Jefferson County
signed a final judgment in favor of LaBelleCo against Gator for damages, interest,
attorney’s fees, and costs of court. The final judgment ordered that LaBelleCo have
all writs and processes necessary to enforce the final judgment. On February 14,
2018, the Jefferson County Clerk issued an abstract of judgment for LaBelleCo’s
final judgment against Gator. However, the abstract of judgment was not filed in the
real property records of Jefferson County or the real property records of Harris
County.
On or about April 5, 2018, Freddy Wirt purchased from Howard Hilborn the
Real Property by virtue of a special warranty deed with vendor’s lien dated April 5,
2018, and filed of record on April 9, 2018, in the Harris County real property records.
The special warranty deed with vendor’s lien also contained a clause which
identified exceptions to the conveyance and warranty, which included “[l]iens
described as part of the Consideration and any other liens described in this deed as
being either assumed or subject to which title is taken” as well as “all rights,
obligations, and other matters arising from and existing by reason of the Harris
County Records[.]” Through a bill of sale dated April 5, 2018, Wirt also purchased
“[a]ll items of personal property, both tangible and intangible (excluding cash),
affixed or attached to, or placed or situated on, or used or acquired in any way
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whatever in connection with the use, enjoyment, occupancy, or operation of the Real
Property, including, without limitation, all equipment, furniture, building supplies,
appliances, machinery, and fixtures owned by Seller and located in or on or used in
connection with the Real Property or the operations thereon” (the “Personal
Property”).
On February 14, 2019, LaBelleCo obtained a writ of execution from the
Jefferson County Clerk, seeking to collect on its money judgment against Gator. On
February 19, 2019, LaBelleCo prepared correspondence to Harris County Constable
Phil Sandlin, requesting that the constable “serve the Writ on Gator Specialty
Services, LLC, at 2859 Westside Drive, Pasadena, Texas 77502 on Thursday,
February 19, 2019 [sic] before its 10:00 a.m. auction.”
Wirt and Plant & Machinery, Inc. entered into an agreement to sell Wirt’s
Personal Property on February 21, 2019, in Harris County, Texas. On the day of the
auction, the constable, who was accompanied by a representative of LaBelleCo,
attempted to serve the writ. Wirt advised the constable that he was the rightful owner
of the property being sold because he purchased the property. Wirt gave the bill of
sale and special warranty deed to representatives of P&M and LaBelleCo. The
auction then proceeded.
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The gross sales proceeds from the auction were $198,974.00. After
commission and expenses, P&M tendered $129,788.60 in proceeds to Wirt. This
amount excludes the disputed proceeds that were deposited into the court’s registry.
On March 27, 2019, P&M filed an interpleader requesting that $35,000.00 in
disputed proceeds from the auction be deposited into the registry of the Jefferson
County Court. P&M asserted that it was subject to rival claims to the same funds or
property: LaBelleCo claimed that the property sold at the auction belonged to Gator
and because LaBelleCo holds a judgment and writ of execution, it is entitled to
$35,000.00 in auction proceeds to satisfy the judgment and attorneys’ fees and court
costs, while Wirt claimed to be a bona-fide purchaser with no notice of the property
being encumbered by a judgment. On April 11, 2019, the trial court granted P&M’s
request for the $35,000.00 funds at issue to be placed in the Court Registry.
Subsequently, on June 7, 2019, Wirt filed a petition in intervention for release
of funds deposited into the court registry, asserting that he was an innocent purchaser
for value and without actual or constructive notice of LaBelleCo’s claim. LaBelleCo
responded with only a general denial, and on July 3, 2019, LaBelleCo filed his
original “Plaintiff’s Verified Third-Party Petition Against Freddy Wirt and
Howard Hilborn, or Alternatively Counter-Claim for Damages, Statutory
Relief and Injunctive Relief.” LaBelleCo alleged claims of fraud, constructive
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fraud in violation of LaBelleCo’s right as a judgment creditor, and violations of the
Texas Uniform Fraudulent Transfer Act. See Tex. Bus. & Com. Code Ann. §§
24.001-.013. Subsequently, on July 24, 2019, LaBelleCo filed “Plaintiff’s First
Amended Verified Third-Party Petition Against Freddy Wirt and Howard
Hilborn” again alleging the same causes of action.
On January 8, 2020, Wirt filed his amended petition in intervention against
LaBelleCo making claims against LaBelleCo for tortious interference with a contract
and for declaratory judgment as to his entitlement to the $35,000.00 in auction
proceeds, as well as a claim for attorney’s fees and exemplary damages. LaBelleCo,
in turn on April 29, 2020, filed a “Motion for Release of Funds Deposited into the
Court Registry.” On May 15, 2020, LaBelleCo also filed a general denial and
asserted affirmative defenses of collateral estoppel and lack of jurisdiction. The trial
court denied LaBelleCo’s Motion for Release of Funds on June 1, 2020, finding that
LaBelleCo had failed to establish any basis for entitlement to the funds. LaBelleCo
also filed on May 14, 2020, a “Motion to Dismiss its Verified Third-Party Petition
Against Freddy Wirt and Howard Hilborn, or Alternatively Counter-Claim for
Damages, Statutory Relief and Injunctive Relief, Without Prejudice,” which the trial
court also granted on June 1, 2020, by a document titled “Order Granting
Plaintiff’s Motion to Dismiss its Verified Third-Party Petition Against Freddy
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Wirt and Howard Hilborn, or Alternatively Counter-Claim for Damages,
Statutory Relief and Injunctive Relief, Without Prejudice” It should be noted
that the above quoted Order bore the same title of LaBelleCo’s original Third-Party
Petition, but not its “Plaintiff’s First Amended Verified Third-Party Petition
Against Freddy Wirt and Howard Hilborn.” Finally, LaBelleCo and Howard
Hilborn filed a joint motion to dismiss with prejudice, asking the trial court to
dismiss all their claims and causes of action against each other, which was granted
by the trial court.
Subsequent to the filings referenced above, Wirt and LaBelleCo agreed to file
cross motions for summary judgment to address the remaining claims and issues.1
In his motion for final summary judgment and release of funds on deposit in the
court registry, Wirt sought a declaratory judgment and release of funds on deposit in
the registry of the court, as well as tortious interference with a contract, and
entitlement to actual damages, exemplary damages and attorney’s fees.
In requesting declaratory relief, Wirt asked the trial court to declare that he
was a bona fide purchaser who purchased the disputed property in good faith for
1With regard to the Order Granting Plaintiff’s Motion to Dismiss signed by
the trial court on June 1, 2020 referenced above, there is a question of whether the
original Third-Party Petition was dismissed, but not the First Amended Third-Party
Petition. Regardless, Wirt treated LaBelleCo’s petition as LaBelleCo’s live pleading
when he filed his motion for summary judgment.
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value without notice or knowledge of LaBelleCo’s claim, and to declare that any and
all rights or interests of LaBelleCo in or to the Real Property and Personal Property
or the proceeds from the sale of either were extinguished by virtue of Howard
Hilborn’s foreclosure sale against Gator before LaBelleCo obtained its final
judgment against Gator. According to Wirt, since LaBelleCo obtained a final
judgment against Gator seven days after Hilborn foreclosed on Gator’s interests in
the disputed property, any alleged interest LaBelleCo had in Gator’s assets by virtue
of a judgment would only exist once a judgment against Gator became final. And,
because LaBelleCo never recorded any abstract of judgment in Harris County before
the disputed property was sold to Wirt, there was no instrument of record that
provided Wirt with actual or constructive notice either of LaBelleCo’s claims or that
it had obtained a judgment against Gator.
Wirt asserted that, as an experienced purchaser, he knowingly and
intentionally paid good and valuable consideration – an additional $150,000.00 – to
Hilborn for the Personal Property to be included in the purchase of the Real Property.
Similarly, neither he nor Hilborn had any involvement with or interest in Gator, so
they couldn’t be considered “insiders” or “affiliates” of Gator as that term is used in
the Uniform Fraudulent Transfer Act. See id. § 24.002(1), (7).
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As to his claim for tortious interference with a contract, Wirt asserted that
LaBelleCo had actual and constructive notice of the foreclosure sale by Hilborn and
that LaBelleCo had no right or interest superior to Wirt as the purchaser and
successor-in-interest in the disputed property to Hilborn. Because of this, Wirt
alleged that LaBelleCo had no valid claim to the proceeds of the sale in the P&M
Auction that are tied to the disputed property he sold in the auction. So, when
LaBelleCo made claims to the auction proceeds, Wirt alleged LaBelleCo interfered
with Wirt’s auction contract with P&M by requiring P&M to file an original
interpleader with respect to $35,000.00, the amount tied to the proceeds from the
disputed property that P&M sold.
Wirt’s motion for final summary judgment and release of funds on deposit in
the court registry also requested exemplary damages under sections 41.003 and
41.011 of the Texas Civil Practice and Remedies Code because of the willful,
malicious, and intentional conduct of LaBelleCo for tortiously interfering with the
Wirt’s auction contract with P&M, despite LaBelleCo having actual or constructive
knowledge of the actual status and rights of the affected parties. See Tex. Civ. Prac.
& Rem. Code Ann. §§ 41.003, 41.011. Wirt also requested attorney’s fees pursuant
to Section 37.009 of the Texas Civil Practice and Remedies Code and Chapter 24 of
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the Texas Business and Commerce Code. See id. § 37.009; Tex. Bus. & Com. Code
Ann. § 24.013.
Wirt attached the following evidence to his motion for summary judgment:
(1) the affidavit of Freddy Wirt; (2) the April 5, 2018 special warranty deed with
vendor’s lien; (3) the April 5, 2018 bill of sale; (4) the affidavit of Howard Hilborn;
(5) the August 23, 2016 deed of trust; (6) the January 2, 2018 foreclosure deed; (7)
Freddy Wirt’s deposition transcript; and (8) the declaration of attorney Jarrett T.
LaRochelle.
In LaBelleCo’s traditional motion for summary judgment, it asserted that
LaBelleCo, as a final judgment creditor, had a right to recover the interpleaded
funds. According to LaBelleCo, Wirt is not entitled to recover the interpleaded funds
because Wirt cannot prove he is an innocent purchaser, or bona fide purchaser, for
value of all of Gator’s assets. Specifically, LaBelleCo claims that Wirt’s deposition
testimony establishes that Wirt only purchased Gator’s real estate and one building
in good faith, that Wirt admitted he did not purchase Gator’s personal property assets
for any value, and that Wirt had actual knowledge of LaBelleCo’s final judgment
lien because the constable attempted to enforce the final judgment lien before the
commencement of the P&M auction. By proceeding with the P&M auction,
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LaBelleCo asserted that Wirt violated the UFTA. LaBelleCo sought recovery of its
attorneys’ fees under its theory that Wirt had violated the UFTA.
LaBelleCo asked the court to dismiss Wirt’s causes of action against
LaBelleCo for tortious interference because Wirt sued LaBelleCo for tortious
interference based on LaBelleCo utilizing the legal process to attempt to collect its
final judgment. LaBelleCo also asked the trial court to dismiss Wirt’s claim for
recovery of attorney’s fees on the tortious interference cause of action.
Additionally, LaBelleCo asked the court to dismiss Wirt’s claim for
exemplary or punitive damages against LaBelleCo. It argued that Wirt did not assert
a claim involving allegations of fraud, malice, or gross negligence against
LaBelleCo, so Wirt, it concluded, did not have a basis in law or in fact to recover
exemplary or punitive damages against it under Texas law.
LaBelleCo attached the following evidence to its motion for summary
judgment: (1) the final judgment dated January 9, 2018 LaBelleCo obtained against
Gator; (2) the abstract of judgment issued by the Jefferson County Clerk on February
14, 2018; (3) the writ of execution issued by the Jefferson County Clerk on February
14, 2019; (4) a letter dated February 19, 2019 from LaBelleCo asking the Harris
County Constable to serve the writ of execution on Gator before the auction; (5) the
April 5, 2018 special warranty deed with vendor’s lien; (6) Freddy Wirt’s deposition
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transcript; (7) P&M’s auction analysis; (8) the title insurance on the Real Property
dated May 18, 2018; (9) the closing statement dated April 5, 2018; (10) the March
13, 2019 letter from Wirt to P&M’s attorney regarding the Personal Property at 2859
Westside Drive; (11) the Harris County Appraisal District’s 2019 appraisal for 2859
Westside Drive; (12) the P&M cosignor report; (13) the March 21, 2019 letter from
P&M to Wirt containing a buyer list and list of tangible personal property sold at the
auction; (14) the April 11, 2019 order granting P&M’s request for the $35,000.00 to
be placed into the Court Registry; and (15) the affidavit of attorney John S. Morgan.
Following a hearing, the trial court granted LaBelleCo’s motion for summary
judgment and denied Wirt’s motion for final summary judgment and release of funds
that as of January 13, 2022, were on deposit with the court. 2 In its order, the trial
court ordered that the Jefferson County Clerk shall release the $35,000.00 in the
2The Clerk’s Record doesn’t show that the trial court signed an order
withdrawing the interlocutory order it signed on June 1, 2020, which is titled “Order
Granting Plaintiff’s Motion to Dismiss its Verified Third-Party Petition Against
Freddy Wirt and Howard Hilborn, or Alternatively Counter-Claim for
Damages, Statutory Relief and Injunctive Relief”, Without Prejudice.” (See
footnote 1) However, since the trial court ruled on the parties cross-motions for
summary judgment, which they filed after the trial court signed the June 1, 2020
Order, and because both parties treated LaBelleCo’s Third Party Petition as
LaBelleCo’s live pleading in the respective cross-motions for summary judgment,
which were also both filed months after June 1, 2020, we have implied that the
parties tried the issues raised in LaBelleCo’s pleadings by consent for the reasons
explained in the opinion, just as if the trial court had signed an order withdrawing its
June 1, 2020 interlocutory order of dismissal.
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Court’s registry by issuing a check made payable to LaBelleCo Fab, LLC, awarded
LaBelleCo reasonable and necessary attorneys’ fees, costs and expenses incurred at
the trial court level, and awarded conditional appellate attorney fees to LaBelleCo.
The trial court signed the final judgment on January 18, 2023.
Wirt filed a motion for new trial on January 28, 2022. The trial court allowed
Wirt’s motion for new trial to be overruled by operation of law. Tex. R. Civ. P.
329b(c), (e). This appeal followed.
Standard of Review
We review appeals challenging rulings on motions for summary judgment de
novo. Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 218 (Tex. 2022). “To
prevail on a traditional motion for summary judgment, the movant must show no
material fact issues exist and that it is entitled to judgment as a matter of law.” Id.;
Tex. R. Civ. P. 166a(c). We take as true all evidence favorable to the respondent,
and we indulge every reasonable inference and resolve any doubts in favor of the
non-movant. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.
2003).
“On cross-motions for summary judgment, each party bears the burden of
establishing that it is entitled to judgment as a matter of law.” Miles v. Tex. Cent.
R.R. & Infrastructure, Inc., 647 S.W.3d 613, 619 (Tex. 2022) (quoting City of
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Garland v. Dall. Morning News, 22 S.W.3d 351, 356 (Tex. 2000)). When the trial
court grants one motion and denies the other, as is the case here, we “‘determine all
questions presented’” and “‘render the judgment that the trial court should have
rendered.’” Id. (quoting City of Garland, 22 S.W.3d at 356). When a trial court’s
order does not specify the grounds relied on for its ruling, the summary judgment
will be affirmed if any of the theories advanced is meritorious. Carr v. Brasher, 776
S.W.2d 567, 569 (Tex. 1989); McCrea v. Cubilla Condo. Corp. N.V., 685 S.W.2d
755, 757 (Tex. App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.). If we determine
that a fact issue precludes summary judgment for either party, we remand the cause
for trial. See Univ. of Tex. Health Sci. Ctr. at Houston v. Big Train Carpet of El
Campo, Inc., 739 S.W.2d 792, 792 (Tex. 1987).
Discussion
In Wirt’s first issue, he asserts that the trial court abused its discretion and
erred in granting judgment in favor of LaBelleCo and against Freddy Wirt. In his
second issue, Wirt complains that the trial court abused its discretion and erred in
failing to determine and declare that Wirt is a bona fide purchaser in good faith for
valuable consideration without actual or constructive notice of any outstanding
equity or an adverse interest or title and is entitled to the auction proceeds on deposit
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in the registry of the court. Because our analysis of issue one and issue two overlap,
we will address these issues together.
At the outset of his brief, Wirt asserts that the court improperly granted
judgment in favor of LaBelleCo because it did not have any live pleadings or claims
for affirmative relief on file, and that the only claims on file by LaBelleCo were its
general denial and affirmative defenses of collateral estoppel and lack of jurisdiction.
Unpled claims or affirmative defenses may form the basis of summary judgment if
the nonmovant does not object. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d
754, 756 n.1 (Tex. 2007) (per curiam); Roark v. Stallworth Oil & Gas, Inc., 813
S.W.2d 492, 495 (Tex. 1991) (“[U]npleaded claims or defenses that are tried by
express or implied consent of the parties are treated as if they [were] raised by the
pleadings.”). The movant must object to defeat a motion for summary judgment;
otherwise, the issue will be tried by consent. See Proctor v. White, 172 S.W.3d 649,
652 (Tex. App.—Eastland 2005, no pet.). “The party who allows an issue to be tried
by consent and who fails to raise the lack of a pleading before submission of the case
cannot later raise the pleading deficiency for the first time on appeal.” Roark, 813
S.W.2d at 495. Here, Wirt did not object or raise this issue in his response to its
motion for summary judgment. We treat LaBelleCo’s unpled claims as having been
tried by consent. See Mayes, 236 S.W.3d at 756, n.1.
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As part of his motion for summary judgment, Wirt sought a claim for
declaratory judgment “as to his status as an innocent purchaser for value without
notice of any claim Plaintiff LaBelleCo Fab, LLC, as to his purchase of the Real
Property and Personal Property from Howard L. Hilborn, and as to his entitlement
to the proceeds from the auction of the Personal Property.” By granting summary
judgment in favor of LaBelleCo, the trial court implicitly found that Wirt was not a
bona fide purchaser, and that Wirt was not entitled to the proceeds from the auction,
as the final judgment ordered the Jefferson County Clerk to release the $35,000.00
in disputed funds to LaBelleCo.
LaBelleCo obtained a money judgment against Gator on January 9, 2018.
Execution is a method of enforcing a judgment. See Tex. R. Civ. P. 621; Jong Ik
Won v. Fernandez, 324 S.W.3d 833, 834 (Tex. App.—Houston [14th Dist.] 2010,
no pet.). To initiate an execution, a judgment creditor must obtain from a court a writ
of execution that meets certain requirements, and then deliver the writ of execution
to a sheriff or constable. See Tex. R. Civ. P. 622, 629; Jong Ik Won, 324 S.W.3d at
834. The officer then levies on the property that is described in the writ of execution,
usually by taking possession of the property (if personal property) or endorsing the
writ (if real property). See Tex. R. Civ. P. 637, 639; Jong Ik Won, 324 S.W.3d at
834. If the officer has followed all appropriate procedures, such as providing notice
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to the property owner, the property may be sold to satisfy the judgment. See Tex. R.
Civ. P. 646a-650; Jong Ik Won, 324 S.W.3d at 834. “A valid levy of an execution
creates a lien on the debtor’s property in favor of the judgment creditor.” Gordon v.
West Houston Trees, Ltd., 352 S.W.3d 32, 39 (Tex. App.—Houston [1st Dist.] 2011,
no pet.) (citations omitted).
Filing and recording an abstract of judgment creates a judgment lien as to a
debtor’s real property. Id. at 38. To obtain a judgment lien on a judgment, the
judgment creditor must comply with the statutory requirements to create the lien.
Tex. Prop. Code Ann. §§ 52.001-.007. The first step in creating a lien on a judgment
is to obtain an abstract of the judgment. Citicorp Real Estate, Inc. v. Banque Arabe
Internationale D’Investissement, 747 S.W.2d 926, 929 (Tex. App.—Dallas 1988,
writ denied). “The purpose of the abstract of judgment is (1) to create a judgment
lien in the first place and (2) to provide notice to subsequent purchasers of that lien’s
existence.” Gordon, 352 S.W.3d at 37. Typically, the clerk of the court in which the
judgment was rendered prepares the abstract of the judgment. Tex. Prop. Code Ann.
§ 52.002(a). “It is the judgment creditor’s responsibility, however, to ensure that the
clerk abstracts the judgment properly.” Gordon, 352 S.W.3d at 38.
When a lien is properly filed in the property records of a county, the lien
attaches to any real property of the defendant in that county. Tex. Prop. Code Ann.
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§ 52.001. Thus, “[w]hen properly recorded and indexed, an abstract of judgment
creates a judgment lien that is superior to the rights of subsequent purchasers and
lien holders.” Wilson v. Dvorak, 228 S.W.3d 228, 233 (Tex. App.—San Antonio
2007, pet. denied). “Accordingly, if a judgment lien is properly attached to a
property, a subsequent purchaser of the property purchases subject to the judgment
lien.” Gordon, 352 S.W.3d at 39. “Substantial compliance with section 52.003 is
essential and mandatory to the creation of the lien itself and is not required solely to
ensure that subsequent purchasers are provided notice.” Citicorp Real Estate, Inc.,
747 S.W.2d at 931 (emphasis in original).
As to Wirt’s purchase of the Real Property, we conclude that the summary
judgment evidence shows that Wirt was an innocent purchaser for value without any
notice of a claim by LaBelleCo. The summary judgment evidence shows that
Hilborn foreclosed on Gator’s real property by foreclosure deed on January 2, 2018;
that deed was filed of record in the real property records of Harris County on the
same day; that LaBelleCo obtained a money judgment against Gator on January 9,
2018; that LaBelleCo obtained an abstract of judgment on February 14, 2018; that
Wirt purchased the Real Property from Howard Hilborn on April 5, 2018; that the
special warranty deed with vendor’s lien was recorded in the real property records
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of Harris County on April 9, 2018; and that LaBelleCo never filed an abstract of
judgment in the real property records of Harris County.
In its motion for summary judgment, LaBelleCo asserts that it abstracted its
final judgment in the real property records of Jefferson County on February 14,
2018, and abstracted its final judgment in the real property records of Harris County,
Texas on July 1, 2019. LaBelleCo offers no summary judgment evidence to prove
that it abstracted its final judgment in Harris County. As to the judgment in Jefferson
County, LaBelleCo attached to its motion an “Abstract of Judgment” issued by the
Jefferson County Clerk on February 14, 2018. However, LaBelleCo’s evidence
shows that abstract of judgment was never filed in the real property records of
Jefferson County; therefore, there is no proof on its face that the instrument was
recorded in any Texas county, let alone Harris County. Therefore, LaBelleCo cannot
show as a matter of law that its abstract of judgment created a creditor’s lien. See
Tex. Prop. Code Ann. § 52.001; Hoffman, McBryde & Co., P.C. v. Heyland, 74
S.W.3d 906, 909 (Tex. App.—Dallas 2002, pet. denied); accord McGlothin v.
Coody, 59 S.W.2d 819, 820 (Tex. Comm’n App. 1933, judgm’t adopted); Olivares
v. Nix Trust, 126 S.W.3d 242, 248 (Tex. App.—San Antonio 2003, pet. denied).
Thus, the summary judgment evidence shows that because LaBelleCo never
recorded its abstract of judgment, its January 9, 2018, final judgment does not
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constitute a lien that attached to the Real Property. Wirt purchased the Real Property
without notice of LaBelleCo’s claims.
Moreover, LaBelleCo’s judgment against Gator’s assets could have attached
solely to the assets Gator owned as of January 9, 2018, the date the trial court signed
the final judgment against Gator. Since Hilborn properly foreclosed on the Real
Property on January 2, 2018 – before LaBelleCo obtained its final judgment –
LaBelleCo’s final judgment could not attach to the Real Property because Gator had
no interest in the Real Property when on January 9, 2018, LaBelleCo obtained a final
judgment against Gator.
Next, we turn to whether Wirt produced summary judgment evidence
sufficient to establish that as a matter of law he was a bona fide purchaser of the
Personal Property. To be an innocent purchaser or a bona fide purchaser, the buyer
must have (1) purchased the property in good faith, (2) paid value for the property,
and (3) had no legal notice, actual or constructive, of the outstanding interest. See
Cooksey v. Snider, 682 S.W.2d 252, 253 (Tex. 1984) (per curiam). Bona fide
purchaser status is an affirmative defense to a title dispute. Madison v. Gordon, 39
S.W.3d 604, 606 (Tex. 2001). A defendant seeking summary judgment on an
affirmative defense must conclusively establish each element of the defense. Tex. R.
Civ. P. 166a(b), (c); Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).
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If the movant produces sufficient summary judgment evidence to establish his right
to summary judgment, the burden shifts to the nonmovant to raise a genuine issue of
material fact precluding summary judgment. Siegler, 899 S.W.2d at 197.
Here, the summary judgment evidence produced by Wirt established that he
was a bona fide purchaser who made a good faith purchase for valuable
consideration without actual or constructive notice of an outstanding equity or an
adverse interest or title. Wirt’s summary judgment evidence shows that: (1) Wirt
purchased from Hilborn through a bill of sale on April 5, 2018, “[a]ll items of
personal property, both tangible and intangible (excluding cash), affixed or attached
to, or placed or situated on, or used or acquired in any way whatever in connection
with the use, enjoyment, occupancy, or operation of the Real Property, including,
without limitation, all equipment, furniture, building supplies, appliances,
machinery, and fixtures owned by Seller and located in or on or used in connection
with the Real Property or the operations thereon”; (2) the total purchase price of the
Real Property and Personal Property was $959,142.62; (3) the total purchase price
included a negotiated cash consideration of $150,000.00 due to the Personal
Property; (4) Wirt had no knowledge of any claims or judgment in favor of
LaBelleCo at the time he purchased the Real Property and Personal Property from
Howard Hilborn; (5) Wirt had no knowledge of any claims or judgment in favor of
22
LaBelleCo at the time he entered into the contract with P&M to auction various items
of Personal Property; and (6) on the date of the auction (February 21, 2019) agents
and/or attorneys from LaBelleCo contacted Wirt and P&M demanding proceeds
from the auction sale of the Personal Property that Wirt purchased from Hilborn.
In their motion for summary judgment, LaBelleCo argued that Wirt cannot
establish the first two elements of the bona fide purchaser defense because Wirt
cannot “establish [that] he bought Gator’s industrial equipment in good faith and for
equivalent value.” LaBelleCo claims that Wirt admitted in his deposition testimony
that “he did not purchase Gator’s personal property assets for any value, because
Wirt paid nothing for Gator’s personal, industrial assets.” LaBelleCo also claims
“Wirt admitted under oath” the following statements: “(1) Wirt did not know Gator’s
personal industrial equipment was included in Wirt’s purchase of Gator’s real
property from Hilborn; (2) Wirt never appraised the value of Gator’s personal
property; and (3) the sale price paid by Wirt was the foreclosure price on Gator’s
real estate – which means Gator’s $198,000.00 of industrial equipment was obtained
by Wirt for free.”
However, that is not what Wirt’s deposition testimony shows. Wirt’s
testimony shows that he knew he was purchasing the Personal Property. Wirt
testified that he purchased from Hilborn “[b]uildings on about five acres in Pasadena
23
with improvements and personal properties, everything he had over there.” Wirt also
included a Bill of Sale as part of his summary judgment evidence which shows he
purchased the Personal Property associated with the Real Estate. He also testified in
his deposition:
So the personal property on there – I mean, the reason I bought the
building and paid what I did was because I knew there was some stuff
– some money available to where I could sell it even for scrap, you
know, at 5 cents a pound for metal, that I’d have some money to….help
me make payments on it.
Likewise, the deposition testimony does not show that Wirt obtained
$198,000.00 of Gator’s industrial equipment for free. Wirt testified that he did not
pay separately for the Personal Property, but rather the purchase of the Real Property
and Personal Property was “done all in one closing” “instead of doing two different
deals.” Wirt testified that his purchase was a “total package. That’s why we did a
bill of sale, but everything was to be included.” And, both Wirt and Hilborn averred
in their affidavits that an additional $150,000.00 in cash was included in the sales
price as consideration for the Personal Property.
LaBelleCo has failed to raise a genuine issue of material fact whether or not
Wirt paid value for the Personal Property. A property owner may testify to the value
of his property. Nat. Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150, 156 (Tex.
2012); Porras v. Craig, 675 S.W.2d 503, 504 (Tex. 1984). “The consideration
24
necessary to establish a bona fide purchaser for value is not market value, it is value
that is not grossly inadequate.” Southside Partners v. Collazo Enters., LLC, No. 11-
16-00346-CV, 2018 WL 6729732, at *6 (Tex. App.—Eastland Dec. 21, 2018, no
pet.) (mem. op.); see McAnnaly v. Panther, 26 S.W.2d 478, 480 (Tex. Civ. App.—
Eastland 1930, no writ) (where price is grossly inadequate, the purchaser cannot be
a bona fide purchaser for value); Phillips v. Latham, 523 S.W.2d 19, 24 (Tex. App.—
Dallas 1975, writ ref’d n.r.e.) (“Although good faith does not necessarily require
payment of the full value of the property, a purchaser who pays a grossly inadequate
price cannot be considered a good-faith purchaser for value.”).
Wirt did admit in his deposition testimony and in his affidavit that he did not
conduct an appraisal of the personal property items that were previously owned by
Gator. However, Wirt’s affidavit and deposition testimony established that Wirt was
an experienced real estate and business investor, and as such, Wirt knew the Personal
Property had value which Wirt thought he could recover through direct sales or in
an auction. Both Wirt and Hilborn averred in their affidavits that the total purchase
price included an additional $150,000.00 of consideration, which they attributed due
to the Personal Property. The net proceeds from the auction were $198,974.00. Thus,
the evidence in the record provides no support for LaBelleCo’s claim that Wirt
considered $150,000.00 to be a grossly inadequate price to pay for the Personal
25
Property. We conclude that LaBelleCo failed to present summary judgment evidence
to meet its burden of proof sufficient to raise a genuine issue of material fact
regarding the first two elements of Wirt’s bona fide purchaser defense.
LaBelleCo also asserts in its motion for summary judgment that Wirt cannot
prove the third element of his bona fide purchaser defense: whether Wirt had notice
of LaBelleCo’s final judgment lien. LaBelleCo claims that its final judgment was
abstracted in Jefferson County and that Wirt received a phone call from the Harris
County constable attempting to enforce LaBelleCo’s final judgment before the
auction occurred; therefore, LaBelleCo concludes that before the auction, Wirt had
actual knowledge that LaBelleCo had a final judgment lien against Gator.
The required notice of a third-party claim or interest may be constructive or
actual. Madison, 39 S.W.3d at 606. Actual notice requires personal information or
knowledge. Id. Constructive notice will be found only if the third party has
possession of the property, and that possession is visible, open, exclusive, and
unequivocal. Id. (citing Strong v. Strong, 98 S.W.2d 346, 350 (Tex. 1936)). Whether
such notice exists is determined at the time of the transfer, meaning when the
defendant acquired the disputed property, a determination that is made without the
benefit of hindsight. See Janvey v. GMAG, L.L.C., 592 S.W.3d 125, 130 (Tex. 2019).
26
As previously discussed, LaBelleCo never abstracted its judgment in the real
property records of Jefferson County or of Harris County. Therefore, Wirt was not
on notice that LaBelleCo had a final judgment for a money judgment against Gator.
And even though Wirt learned about LaBelleCo’s final judgment on the day of the
auction, notice is determined at the time of the transfer. See id. It is inconsequential
that Wirt learned about LaBelleCo’s final judgment almost ten months after the
transfer of the Personal Property. LaBelleCo has failed to raise a genuine issue of
material fact as to all elements of the bona fide purchaser defense. With respect to
the Personal Property, we conclude that the trial court abused its discretion in failing
to declare Wirt a bona purchaser.
In its motion for summary judgment, LaBelleCo also asserts a claim against
Wirt for violations of the Uniform Fraudulent Transfer Act (“UFTA”). Specifically,
LaBelleCo claims that Wirt violated Texas and Business and Commerce Code
section 24.005(a) (the BCC) because “Wirt’s instructions to [Plant & Machinery,
Inc.] to proceed with the auction was a ‘transfer made or obligation incurred by a
debtor [that is] fraudulent to a creditor [LaBelleCo], whether the creditor’s claim
arose before or within a reasonable time after the transfer was made or the obligation
was incurred…[.]’” See Tex. Bus. & Com. Code Ann. § 24.005(a). LaBelleCo
claims that Wirt had “actual knowledge” of LaBelleCo’s final judgment prior to the
27
P&M auction and that by proceeding with the auction, Wirt violated the UFTA.
LaBelleCo claims that Wirt cannot qualify for a bona fide purchaser defense under
the BCC section 24.004(b) because his deposition testimony shows that Wirt did not
give a “reasonably equivalent value” for Gator’s industrial equipment. See id. §
24.004(b), (d).
Chapter 24 of the BCC is known as the Uniform Fraudulent Transfer Act. See
id. §§ 24.001-.013. UFTA is intended to prevent debtors from defrauding creditors
by moving assets out of reach. Challenger Gaming Solutions, Inc. v. Earp, 402
S.W.3d 290, 293 (Tex. App.—Dallas 2013, no pet.); Arriaga v. Cartmill, 407
S.W.3d 927, 931 (Tex. App.—Houston [14th Dist.] 2013, no pet.). “[T]he focus of
an UFTA claim is to ensure the satisfaction of a creditor’s claim when the elements
of a fraudulent transfer are proven.” Challenger Gaming Solutions, 402 S.W.3d at
298.
Consistent with its purpose, UFTA provides a comprehensive statutory
scheme through which a creditor may seek recourse for a fraudulent transfer of assets
or property. Arriaga, 407 S.W.3d at 932. UFTA delineates what types of transfers
and obligations are fraudulent, enumerates the remedies available to a creditor,
prescribes the measure of liability of a transferee, and lists the defenses and
protections afforded a transferee. Altus Brands II, LLC, v. Alexander, 435 S.W.3d
28432, 441 (Tex. App.—Dallas 2014, no pet.). Under the UFTA, the trial court may
find a substantial likelihood of success on the merits when it is “presented with
evidence or intent to defraud the creditor.” See Tanguy v. Laux, 259 S.W.3d 851,
858 (Tex. App.—Houston [1st Dist.] 2008, no pet.).
Under the UFTA, “a transfer made with actual or constructive intent to
defraud any creditor may be avoided to the extent necessary to satisfy the creditor’s
claims.” Janvey v. Golf Channel, Inc., 487 S.W.3d 560, 566 (Tex. 2016). Actual
intent to defraud creditors is ordinarily a fact question. Qui Phuoc Ho v. MacArthur
Ranch, LLC, 395 S.W.3d 325, 328 (Tex. App.—Dallas 2013, no pet.).
Circumstantial proof may be used to prove fraudulent intent since direct proof is
often unavailable. Id. Facts and circumstances that may be considered in determining
fraudulent intent include a nonexclusive list of “badges of fraud” prescribed by the
legislature. See Tex. Bus. & Com. Code Ann. § 24.005(b). These include, for
example, transfer to an insider, suit or threatened suit against the debtor before the
transfer, transfer of substantially all of the debtor’s assets, the debtor’s insolvency at
the time of transfer or shortly afterwards, concealment of the transfer, and whether
the consideration the debtor received was reasonably equivalent to the asset
transferred. See id. § 24.005(b).
29
As applicable to this case, “[a] transfer made…by a debtor is fraudulent as to
a creditor, whether the creditor’s claim arose before or within a reasonable time after
the transfer was made or the obligation was incurred, if the debtor made the transfer
or incurred the obligation with actual intent to hinder, delay, or defraud any creditor
of the debtor.” Id. § 24.005(a)(1). A “‘[t]ransfer means every mode, direct or
indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting
with an asset or an interest in an asset, and includes payment of money, release,
lease, and creation of a lien or other encumbrance.” Id. § 24.002(12). “Value” is
given for a transfer or obligation if, in exchange for the transfer or obligation,
property is transferred, or an antecedent debt is secured or satisfied. Id. § 24.004(a).
A “[r]easonably equivalent value” includes a transfer or obligation that is within the
range of values for which the transferor would have sold the asset in an arm’s length
transaction. Id. § 24.004(d).
“The fundamental remedy for a creditor who establishes a fraudulent transfer
is recovery of the property from the person to whom it has been transferred.”
Challenger Gaming Solutions, Inc., 402 S.W.3d at 294; see Tex. Bus. & Com. Code
Ann. § 24.008. Section 24.009 provides an affirmative defense to “a person who
took [the asset] in good faith and for reasonably equivalent value.” Tex. Bus. Com
Code. Ann § 24.009(a). If the person establishes the defense, then the transfer “is
30
not voidable under Section 24.005(a)(1)” and the transferee may keep the transferred
asset. Id. § 24.009(a). However, if a transferee does not establish the affirmative
defense, the creditor, subject to certain exceptions, “may recover judgment [against
the transferee] for the value of the asset transferred, as adjusted under Subsection (c)
of this section, or the amount necessary to satisfy the creditor’s claim, whichever is
less.” Id. § 24.009(a). In addition, “if the judgment under Subsection (b) of this
section is based upon the value of the asset transferred, the judgment must be for an
amount equal to the value of the asset at the time of the transfer, subject to adjustment
as the equities may require.” Id. § 24.009(c).
“Debtor” is defined as “a person who is liable on a claim.” Id. § 24.002(6).
“Claim” means “a right to payment or property, whether or not the right is reduced
to judgment […]” Id. § 24.002(3). LaBelleCo obtained a final money judgment
against Gator. Therefore, Gator is considered a debtor under the UFTA. Wirt is not
a debtor of LaBelleCo.
Here, the UFTA requires evidence of the following: (1) that LaBelleCo is a
creditor, i.e., has a claim against; (2) debtor Gator; (3) that Gator transferred the asset
after, or a short time before, LaBelleCo’s claim arose; and (4) that those transfers
were made with the intent to hinder, delay, or defraud LaBelleCo. See id. §
24.005(a)(1).
31
LaBelleCo has produced no evidence that Gator transferred assets before or
after LaBelleCo’s claim arose with the intent to hinder, delay, or defraud LaBelleCo.
Instead, the summary judgment evidence shows that (1) Howard Hilborn sold to
Gator three tracts of real estate in Harris County on August 23, 2016; (2) that the
note was secured by a first and superior vendor’s lien; (3) Gator failed to make
payment due under the note; (4) Hilborn foreclosed on Gator’s interest in the real
property by virtue of a foreclosure deed dated January 2, 2018; (5) Hilborn sold the
Real Property to Wirt by virtue of a special warranty deed with vendor’s lien dated
April 5, 2018 and filed of record April 9, 2018; and (6) Hilborn sold all the items of
Personal Property that were on the Real Property to Wirt by virtue of a bill of sale
dated April 5, 2018. Wirt and Hilborn averred in their summary judgment affidavits
that neither had any involvement with or interest in Gator. Wirt specifically stated
that he has never been an “affiliate” or “insider” of Gator.
LaBelleCo did not produce summary judgment evidence to show that it is
entitled to judgment as a matter of law on its UFTA claim, and LaBelleCo did not
produce summary judgment evidence that showed Gator transferred assets to a
transferee (Wirt) with actual intent to hinder, delay, or defraud LaBelleCo.
Therefore, the trial court erred when it granted summary judgment to LaBelleCo on
its UFTA claim.
32
Because Wirt established by summary judgment evidence that he was an
innocent purchaser for value without notice of LaBelleCo’s claim, LaBelleCo did
not raise a genuine issue of material fact as to this issue with their summary judgment
evidence, and that LaBelleCo did not prove that Wirt violated the UFTA3, it follows
that Wirt is entitled to the proceeds from the auction. The trial court erred in
awarding the $35,000.00 to LaBelleCo that had been deposited into the registry of
the court and represented the proceeds of the sale from the disputed property in the
P&M auction.
In his third issue, Wirt complains that the trial court erred in failing to grant
summary judgment as to Wirt’s claim for tortious interference with a contract. Wirt’s
3Because the record demonstrates that Wirt is a bona fide purchaser who made
a good faith purchase for valuable consideration without actual or constructive
notice of LaBelleCo’s claim, the record also demonstrates that LaBelleCo cannot
establish its claims against Wirt for fraud and constructive fraud as a matter of law.
See Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015) (stating that
a common-law fraud claim requires a material misrepresentation, which was false,
and which was either known to be false when made or was asserted without
knowledge of its truth, which was intended to be acted upon, which was relied upon,
and which caused injury); Strobach v. WesTex Community Credit Union, 621
S.W.3d 856, 879 (Tex. App.—El Paso 2021, pet. denied) (stating that “constructive
fraud is the breach of some legal or equitable duty which, irrespective of moral guilt,
the law declares fraudulent because of its tendency to deceive others, to violate
confidence, or to injure public interests”); see also Janvey v. GMAG, L.L.C., 592
S.W.3d 125, 129 (Tex. 2019) (holding that a good faith transferee, in the context of
the Uniform Fraudulent Transfer Act, is a transferee who “was honest in fact,
reasonable in light of known facts, and free from willful ignorance of fraud”).
33
claim against LaBelleCo for tortious interference is based on his allegation that
LaBelleCo had no valid claim or interest against the proceeds from the auction sale
conducted by P&M and that P&M “failed to release any auction proceeds to Wirt
until LaBelleCo required it to file an original interpleader petition with respect to
$35,000.00 in auction proceeds,” which the trial court ordered deposited into the
registry of the court.
“A party to a contract has a cause of action for tortious interference against
any third person who wrongly induces another contracting party to breach the
contract.” Swank v. Sverdlin, 121 S.W.3d 785, 799 (Tex. App.—Houston [1st Dist.]
2003, pet. denied); see Holloway v. Skinner, 898 S.W.2d 793, 794-95 (Tex. 1995).
The elements of tortious interference with an existing contract are (1) there exists an
existing contract subject to interference, (2) a willful and intentional act of
interference with the contract, (3) that proximately caused the plaintiff’s injury, and
(4) caused actual damages or loss. Prudential Ins. Co. of Am. v. Fin. Rev. Servs.,
Inc., 29 S.W.3d 74, 77 (Tex. 2000).
A defendant may obtain summary judgment dismissing a claim of tortious
interference with an existing contract by disproving one or more elements of the
claim as a matter of law. Powell Indus., Inc. v. Allen, 985 S.W.2d 455, 456 (Tex.
1998). As an affirmative defense, a defendant may negate liability for tortious
34
interference on the ground that its conduct was privileged or justified. Prudential,
29 S.W.3d at 80; see also Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 727 (Tex.
2001) (holding that a defendant who induces breach of contract must show some
justification or privilege for depriving another of benefits to which agreement
entitled him). Merely inducing an obligor under a contract to do what it has a right
to do is not actionable interference. Baty v. ProTech Ins. Agency, 63 S.W.3d 841,
857 (Tex. App.—Houston [14th Dist.] 2001, pet. denied). When a defendant asserts
this affirmative defense, the burden shifts to him to prove the defense. Cmty. Health
Sys. Prof’l Servs. Corp. v. Hansen, 525 S.W.3d 671, 697 (Tex. 2017).
A party is privileged to interfere with the contractual relations of another if
(1) it acts in the bona fide exercise of its own right, or (2) it has an equal or superior
right in the subject matter to that of the party to the contract. Id. The justification
defense is based on either the exercise (1) of one’s own legal rights; or (2) a good-
faith claim to a colorable legal right, even though the claim ultimately proves to be
mistaken. Tex. Beef Cattle Co. v. Green, 921 S.W.2d 203, 211 (Tex. 1996). When a
defendant establishes a legal right to act as it did, the defendant conclusively
establishes the defense of justification, and the defendant’s motivation behind the
assertion of its right is irrelevant. Id. The good faith of the defendant is legally
significant only where the defendant asserts a mistaken, but colorable, claim of a
35
legal right. See id. at 212. A right is colorable “if it appears, without further inquiry
(that is, if it appears on its face), genuine, truthful, valid, or existing.” Bennett v.
Comput. Assocs. Intern., Inc., 932 S.W.2d 197, 202 (Tex. App.—Amarillo 1996,
writ denied).
On appeal, Wirt argues that the evidence establishes as a matter of law all vital
facts supporting Wirt’s claim for tortious interference because the summary
judgment evidence shows that LaBelleCo caused P&M to breach its contract with
Wirt in that LaBelleCo required P&M to file an original interpleader petition with
respect to the $35,000.00 in auction proceeds, which were then deposited into the
court’s registry. More specifically, Wirt’s summary judgment evidence
demonstrates that he had no knowledge of any claims or judgment in favor of
LaBelleCo at the time he purchased the Real Property and the Personal Property.
Wirt attested that on the day of the auction, LaBelleCo contacted him and P&M
demanding proceeds of the sale of the Personal Property from Hilborn. According
to Wirt, Wirt asked LaBelleCo to provide evidence or documentation that would
entitle it to proceeds from the auction of the Personal Property and that P&M initially
refused to release any proceeds from the auction of his Personal Property because of
LaBelleCo’s claims. Wirt further claimed that LaBelleCo “forced” P&M to file an
original interpleader with respect to the $35,000.00 in auction proceeds. By forcing
36
P&M to file an interpleader, LaBelleCo caused P&M to breach its contract with
Wirt.
At issue is whether this constitutes some evidence of LaBelleCo’s “willful
and intentional act of interference.” Texas courts have held that to satisfy this
element of the cause of action for tortious interference, a party must be more than a
willing participant; it must knowingly induce one of the contracting parties to breach
its obligations. See Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 927 (Tex.
1993); John Paul Mitchell Sys. v. Randall’s Food Mkts., 17 S.W.3d 721, 730 (Tex.
App.—Austin 2000, pet. denied). To establish an actionable “willful and intentional
act,” the evidence must show the defendant’s influence and “knowing inducement”
of the contract obligor’s wrongful action. Browning-Ferris, 865 S.W.2d at 927.
The summary judgment evidence here, however, raises a genuine issue of
material fact as to whether LaBelleCo acted with the requisite intent. The summary
judgment evidence produced by LaBelleCo establishes that it obtained a final
judgment against Gator on January 9, 2018, and that it obtained a writ of execution
on February 14, 2019. LaBelleCo attempted to execute this writ on February 19,
2019, as evidenced by its letter to the Harris County Constable asking the constable
to serve the writ on Gator at the auction. The summary judgment evidence shows
that, even though later proven to be mistaken, LaBelleCo believed it was exercising
37
its legal right when it attempted to execute the writ and collect its final judgment
against Gator. See Bennett, 932 S.W.2d at 202. By filing the interpleader action,
P&M was asserting its rights as disinterested stakeholder subject to rival and
conflicting claims. See Tex. R. Civ. P. 43; State Farm Life Ins. Co. v. Martinez, 216
S.W.3d 799, 807 (Tex. 2007); Aaron v. Fisher, 645 S.W.3d 299, 313 (Tex. App.—
Eastland 2022, no pet.).
We conclude the summary judgment evidence raises a material fact issue
regarding whether there was a willful and intentional act of interference with Wirt’s
contract to sell his property at auction. Accordingly, the trial court erred when it
granted LaBelleCo’s motion for summary judgment on Wirt’s tortious interference
claim. Since there is a fact issue as to Wirt’s intentional interference claim, we would
usually consider remanding to the trial court for a trial before a factfinder to
determine whether LaBelleCo willfully, maliciously, and intentionally tortiously
interfered with Wirt’s contract with P & H. However, in his brief, Wirt only seeks
reversal of the trial court’s Final Judgment and for this Court to render judgment in
favor of Wirt. In other words, Wirt did not request a reversal and remand, nor did
he in the alternative request a remand on any fact issue that would prevent the trial
court from granting a summary judgment. Since this Court cannot grant relief not
requested by the Appellant, we conclude Wirt waived a request for a reversal and
38
remand. See Solomon v. Buckle, No. 01-23-00349-CV, 2024 WL 1098204, at *7
(Tex. App.—Houston [1st Dist.] Mar. 14, 2024, no pet. h.). Furthermore, and
regardless of the above, we further conclude that in his motion for summary
judgment, Wirt’s evidence was insufficient and failed to establish as a matter of law
that LaBelleCo willfully, maliciously, and intentionally tortiously interfered with
Wirt’s contract with P & H. See Tex. Beef Cattle Co. v. Green, 921 S.W.2d 203, 211-
12 (Tex. 1996).
Finally, Wirt complains of the trial court’s award of attorney’s fees. As part
of his first issue, Wirt complains the trial court abused its discretion in awarding
LaBelleCo attorney’s fees. In its motion for summary judgment, LaBelleCo asked
the court to award its attorney’s fees, costs, and expenses. LaBelleCo claimed it was
entitled to attorney’s fees, costs, and expenses from Wirt “[s]ince Wirt intentionally
violated the Texas Uniform Transfer Act.” In his third issue, Wirt complains on
appeal that the trial court abused its discretion by failing to award Wirt attorney’s
fees against LaBelleCo in its final judgment. Wirt claims that the evidence shows he
is entitled to attorney’s fees under Section 37.009 of the Texas Civil Practice and
Remedies Code and Chapter 24 of the Texas Business and Commerce Code.
“In any proceeding [for declaratory judgment] the court may award costs and
reasonable and necessary attorney’s fees as are equitable and just.” Tex. Civ. Prac.
39
& Rem. Code Ann. § 37.009. A party doesn’t need to prevail to be awarded
attorney’s fees under the Declaratory Judgments Act (“DJA”). City of Pasadena v.
Gennedy, 125 S.W.3d 687, 700-01 (Tex. App.—Houston [1st Dist.] 2003, pet.
denied). The award of such costs and fees is within the discretion of the trial court
and an award premised on an action for declaratory judgment will not be disturbed
on appeal absent a clear showing of an abuse of discretion. Oake v. Collin Cnty., 692
S.W.2d 454, 455 (Tex. 1985).
Under the UFTA, a trial court may also award costs and reasonable attorney’s
fees “as are equitable and just.” See Tex. Bus. & Com. Code Ann. § 24.013; Citizens
Nat’l Bank of Tex. v. NXS Constr., Inc., 387 S.W.3d 74, 80 (Tex. App.—Houston
[14th Dist.] 2012, no pet.). This provision of the UFTA “gives the trial court the
sound discretion to award attorney’s fees based on the evidence the trial court
heard.” Walker v. Anderson, 232 S.W.3d 899, 919 (Tex. App.—Dallas 2007, no
pet.). When fees may be awarded by statute, the award is not dependent upon
whether the party prevails in the case. See Barshop v. Medina Cnty. Underground
Water Conservation Dist., 925 S.W.2d 618, 637 (Tex. 1996).
Furthermore, where the prevailing party has changed on appeal, we would
usually consider remanding the issue of attorney fees to the trial court for
consideration of what is equitable and just.” See Morath v. Tex. Taxpayer & Student
40
Fairness Coal., 490 S.W.3d 826, 885 (Tex. 2016). However, as mentioned, Wirt
asked this Court to reverse the trial court’s Final Judgment and render judgment in
his favor. He did not request that this Court reverse and remand any issues to the
trial court if he prevailed on any of the claims he raised in his appeal, nor did Wirt
alternatively request that this Court remand as to any issues so that the trial court
could consider whether to award him attorney’s fees. In fact, Wirt claimed that his
attorney’s fees testimony was direct and uncontroverted by any other evidence, and
he argued that this Court should reverse and render an award of attorney’s fees in
the amounts set forth in his attorney’s Declaration, which he attached as Exhibit D
to his motion for summary judgment. However, as we explained, under the DJA and
the UFTA the trial court’s decision about whether to award attorney’s fees lies within
the discretion of court, an issue which may only be determined on remand. As an
intermediate appellate court, we may not grant the relief that the Appellant failed to
request in his brief, and for that reason we conclude that Wirt waived his right to
have this Court reverse the trial court’s judgment and remand the case to the trial
court so that the trial court may consider whether he should be awarded his attorney’s
fees. See Solomon, 2024 WL 1098204, at *7.
41
Conclusion
We conclude that Wirt was entitled to summary judgment on his claim that he
was a bona fide and good faith purchaser for value as to the real and personal
property conveyed to him through a special warranty deed dated April 9, 2018, and
filed of record in Harris County, and that Wirt did not have actual or constructive
notice of an outstanding equity or an adverse interest or title by LaBelleCo. Because
Wirt established that he was entitled to summary judgment on his bona fide
purchaser defense, we hold the trial court erred in failing to grant Wirt’s motion for
summary judgment seeking the $35,000.00 in proceeds that P&M Machinery, Inc.
deposited into the registry of the court.
We further conclude that in its motion for summary judgment, LaBelleCo
failed to establish that it was entitled to judgment as a matter of law on its UFTA
claim. Specifically, LaBelleCo’s evidence fails to establish as a matter of law that
Gator transferred assets to a transferee (Wirt) with the intent to hinder, delay, or
defraud LaBelleCo. Likewise, LaBelleCo’s evidence fails to establish as a matter of
law that Wirt did anything to hinder, delay, or defraud LaBelleCo. Therefore, the
trial court erred in granting LaBelleCo’s request for summary judgment on its UFTA
claim, awarding attorney’s fees to LaBelleCo on the UFTA claim, and awarding the
money that P&M had deposited into the registry of the court to LaBelleCo.
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Given these conclusions, it appears that Wirt is the sole party who has
prevailed on a claim to the proceeds in the registry of the court. Yet in addition to
Wirt’s claim to the proceeds on his theory that when he purchased the property he
didn’t have notice of LaBelleCo’s claim, Wirt also sued LaBelle for tortiously
interfering with the auction of the property, which resulted in P&M depositing the
disputed proceeds of the auction into the registry of the court. The trial court granted
LaBelleCo’s motion for summary judgment against Wirt on that claim, but we
conclude that the evidence that Wirt presented to support his intentional interference
with contract claim raises an issue of material fact as to whether LaBelleCo willfully
and intentionally interfered with Wirt’s contract with Plant & Machinery, Inc.
Thus, Wirt has two claims to the proceeds in the registry of the court. As a
bona purchaser for value, we hold his motion for summary judgment established that
he was a bona purchaser as a matter of law. As to his intentional interference claim,
however, there is a fact issue that would require a trial before a factfinder to
determine whether he is entitled to the proceeds in the registry of the court. However,
in his brief, Wirt only seeks reversal of the trial court’s Final Judgment and for this
Court to render judgment in favor of Wirt. In other words, Wirt did not request a
reversal and remand, nor did he in the alternative request a remand on any fact issue
that would prevent the trial court from granting a summary judgment. Since this
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Court cannot render a judgment not requested by the Appellant, we conclude Wirt
waived a request for a reversal and remand. Furthermore, and regardless of the
above, we further conclude that in his motion for summary judgment, Wirt’s
evidence was insufficient and failed to establish as a matter of law that LaBelleCo
willfully, maliciously, and intentionally tortiously interfered with Wirt’s contract
with P & H.
Based on these conclusions, we reverse the trial court’s summary judgment
order granting LaBelleCo’s traditional motion for summary judgment against Wirt.
We also reverse the trial court’s Final Judgment, which awards $35,000.00 in the
trial court’s registry to LaBelleCo, requires the Jefferson County Clerk to release the
$35,000.00 in the registry of the court to LaBelleCo, and orders additional recoveries
against Freddy Wirt for attorney’s fees, costs, and conditional awards of attorney’s
fees for appeals. We render judgment that LaBelleCo take nothing on its claims
against Wirt.
As to Wirt’s claims, we have held that he established he is a bona fide
purchaser as a matter of law and entitled to the $35,000.00 in proceeds that were
deposited in the registry of the court, so we reverse the trial court’s summary
judgment order denying Wirt’s traditional motion for summary judgment against
LaBelleCo on Wirt’s bona fide purchaser defense. We render judgment that Wirt is
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entitled to the $35,000.00 and is awarded those proceeds that were deposited in the
registry of the court. We further render judgment that the Jefferson County Clerk
shall release the $35,000.00 in the Court's Registry via a check made payable to
"Freddie Wirt" within seven (7) days of the date of this Court’s Mandate, and the
Jefferson County Clerk shall mail that check to Wirt’s attorney of record on
appeal.
REVERSED AND RENDERED.
W. SCOTT GOLEMON
Chief Justice
Submitted on August 17, 2023
Opinion Delivered April 4, 2024
Before Golemon, C.J., Horton and Johnson, JJ.
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