Opinion
No. 14-09-00617-CV
Opinion filed February 3, 2011.
On Appeal from the 215th District Court, Harris County, Texas, Trial Court Cause No. 2008-60974.
Panel consists of Justices ANDERSON, FROST, and SEYMORE.
OPINION
A residential real property lien was extinguished by a sale of that property to satisfy a property tax lien. After the tax sale, the former owners sought to redeem the property under section 34.21 of the Texas Tax Code, which governs redemption of real property sold at a tax sale. The holder of the extinguished lien brought a declaratory-judgment suit against the tax sale purchaser, arguing that the former owners had redeemed the property and, in the alternative, that the purchaser was precluded under the doctrine of quasi-estoppel from denying that the former owners had redeemed the property. We conclude that the prerequisites of Texas Tax Code section 34.21 were not satisfied as a matter of law. However, the trial court erred in granting the purchaser's summary-judgment motion because there are fact issues regarding quasi-estoppel and a deed executed by the purchaser. Accordingly, we reverse and remand.
I. FACTUAL AND PROCEDURAL BACKGROUND
The residential real property in question is located on Yoakum Boulevard in Houston, Texas ("Property"). Gordon Wittenberg and his wife Susan Wittenberg constructed a residence on the Property in 2003, when title to the Property was held by Tribus, Inc. Tribus did not pay all of the property tax due on the Property for 2004, and the taxing authorities filed a collection suit in 2005 against Tribus and Frost National Bank, the holder of the mortgage, seeking to collect the taxes and foreclose the tax lien. On behalf of Tribus, Gordon Wittenberg acknowledged that the taxes were past due and stated that Tribus planned to pay the delinquent taxes under a payment plan.
On May 25, 2006, Tribus conveyed to Susan Wittenberg title to the Property. At the same time, the Wittenbergs refinanced the existing mortgage indebtedness on the Property, which had been held by Frost National Bank. The new indebtedness took the form of a promissory note in the principal amount of $650,000 in favor of New Century Mortgage Corporation, secured by a deed-of-trust lien filed for record on June 9, 2006 (the "Bank's Lien"). New Century assigned this indebtedness and lien to plaintiff/appellant Deutsche Bank National Trust Company, as Indenture Trustee for New Century Home Loan Trust 2006-2 (the "Bank"). Shortly after the closing of the refinancing transaction, most of the property taxes on the Property for 2004 and 2005 were paid. Despite these payments, approximately $4,600 in taxes due to the Houston Independent School District for 2005 were not paid. Based on these unpaid taxes, the trial court in the tax suit (the "Tax Court") rendered a final judgment in February 2007 for these taxes plus penalties and interest, for a total amount of $6,847.63. The Tax Court also ordered foreclosure of the tax lien on the Property and sale of the Property, which the court determined had a market value of $659,100 on the date of trial in January 2007. Other than the taxing authorities, the only parties to this judgment were Tribus and Frost National Bank.
Though Tribus conveyed title to the Property to Susan Wittenberg only, for various reasons, perhaps including community-property issues, both Wittenbergs are included as parties to various documents. Therefore, we refer to both Wittenbergs as if both were owners of the Property, even though Gordon Wittenberg was not a record owner.
A trial court rendering judgment in a suit for foreclosure of a tax lien on property is required to make such a finding in its judgment. See TEXAS TAX CODE ANN. § 33.50 (West 2008).
This tax sale occurred on June 5, 2007, and appellee/defendant Stockdick Land Company ("Stockdick") purchased the Property at this sale for $370,000 in cash. Out of these proceeds from the tax sale, the 2005 taxes that were the basis of the judgment were paid, and the 2006 property taxes on the Property were also paid. After these payments, $335,767.52 of the proceeds from the tax sale remained (the "Remaining Proceeds"). If the Bank had filed a claim to these proceeds, the Bank would have had a higher priority of right to them than Tribus had. See TEXAS TAX CODE ANN. § 34.04(c) (West 2008). But before the Bank filed any claim to these proceeds, the Tax Court ordered the Remaining Proceeds returned to Tribus. The Bank had no notice of the court proceedings concerning Tribus's recovery of the Remaining Proceeds. Tribus transferred the Remaining Proceeds to Stockdick.
In a civil appeal, this court will accept as true the facts in the appellant's statement of facts, unless another party contradicts them. See TEX. R. APP. P. 38.1(g).
In December 2007, Stockdick signed a deed ("Deed") stating as follows:
[Stockdick] . . . for and in consideration of $462,500 consisting of cash in the amount of $370,000 and one promissory note in the principal sum of $92,500 payable to the order of [Stockdick], bearing interest at the rate therein provided, said note . . . being secured by vendor's lien and superior title retained herein in favor of [Stockdick], and being also secured by Deed of Trust of even date from Grantee to Wade A. Riner, Trustee, the receipt and sufficiency of which is hereby acknowledged and confessed, does hereby sell, transfer, and deliver unto Gordon Wittenberg and wife, Susan Wittenberg whose address is [address of the Property] (hereinafter referred to as "Grantee"), all of Grantor's right, title, and interest in [the Property]. This deed is made without warranty, express or implied, and is executed pursuant to redemption of the Property by Grantee from that certain tax sale conducted on or about June 5, 2007 under Cause No. 2005-74535 styled, Harris County, et al. v. Tribus, Inc., et al., 80th Judicial District Court, Harris County, Texas.
(emphasis added). This Deed and the deed of trust mentioned therein were filed for record on December 10, 2007. The Wittenbergs executed the promissory note mentioned in this deed in the original principal amount of $92,500, with an interest rate of ten percent per year ("Note"). The Note and deed of trust were signed two days before the Deed was signed. All principal and interest under the Note was due on July 31, 2008. The Wittenbergs did not pay the amounts due under the Note on or before this date.
David Petroni, a manager at Carrington Mortgage Services, LLC, sent a letter to Stockdick on September 23, 2008, stating his understanding that Stockdick purchased the Property at a tax sale in June 2007 and obtained a deed for the Property. Petroni stated that Carrington had an active loan on the Property and desired to regain possession of the Property. Petroni requested that Stockdick provide a redemption quote. Stockdick provided a payoff amount to Carrington based on the past-due amount owing on the Note. Neither Carrington nor the Bank made any payment to Stockdick. On October 15, 2008, the Bank filed this declaratory-judgment suit in the trial court below. Stockdick proceeded with a non-judicial foreclosure sale of the Property on November 4, 2008. Stockdick purchased the Property at this sale for $50,000, and the trustee's deed reflecting this sale was filed for record on November 11, 2008.
In its suit, the Bank alleged that the Wittenbergs exercised their statutory right to redeem the Property and that this redemption resulted in the Deed. As a result of this redemption, the Bank alleged, the Bank's Lien was reinstated as a valid and subsisting mortgage against the Property, and this lien was senior and superior to Stockdick's deed-of-trust lien ("Stockdick's Lien"). The Bank alleged estoppel by deed and estoppel generally against Stockdick's attempts to argue that the Deed did not effect a redemption of the Property. The Bank sought declaratory relief regarding the relative lien priorities of the Bank's Lien and Stockdick's Lien. Among other things, the Bank sought declarations that (1) the Wittenbergs redeemed the Property after the tax sale, thus reinstating the Bank's Lien as a valid lien on the Property, (2) the Bank's Lien is senior and superior to Stockdick's Lien, and (3) any foreclosure of Stockdick's Lien has no effect on the validity, seniority, and priority of the Bank's Lien. The Bank also requested reasonable and necessary attorney's fees under section 37.009 of the Texas Civil Practice and Remedies Code.
The Bank filed a traditional motion for summary judgment on all of its claims for declaratory relief. Stockdick filed a traditional motion for summary judgment, asserting the following grounds:
(1) The Wittenbergs did not redeem the Property because they did not comply or substantially comply with the requirement that they pay Stockdick $92,500 in cash, which was the 25% premium required by section 34.21 of the Tax Code.
Unless otherwise expressly stated, all statutory references in this opinion are to the Texas Tax Code.
(2) Stockdick maintained its superior title to the Property by reserving a vendor's lien to secure payment of the Note.
(3) The Bank waived its contention that the Wittenbergs redeemed the Property.
(4) The Bank may not assert its claims under the Declaratory Judgments Act; rather, this action is really a trespass-to-try-title action.
The trial court granted Stockdick's motion, denied the Bank's motion, and rendered judgment that the Bank take nothing. While the trial court still had plenary power over this case, the court granted the Bank leave to supplement its petition to add new claims subject to and without waiving the Bank's claims for declaratory relief. These new claims were claims to the Remaining Proceeds based on section 34.04 of the Tax Code or based on common law claims for money had and received and conversion. The trial court later severed these new claims and transferred them to the Tax Court, thus creating a final and appealable judgment.
On appeal, the Bank asserts various arguments under issues in which it assigns error regarding the trial court's granting of Stockdick's summary-judgment motion and denying of the Bank's summary-judgment motion.
II. STANDARD OF REVIEW
In a traditional motion for summary judgment, if the movant's motion and summary-judgment evidence facially establish its right to judgment as a matter of law, the burden shifts to the nonmovant to raise a genuine, material fact issue sufficient to defeat summary judgment. M.D. Anderson Hosp. Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000). In our de novo review of a trial court's summary judgment, we consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence. Goodyear Tire Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). When, as in this case, the order granting summary judgment does not specify the grounds upon which the trial court relied, we must affirm the summary judgment if any of the independent summary-judgment grounds is meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).
We may review the trial court's denial of the Bank's summary-judgment motion because in it the Bank sought a final summary judgment. See CU Lloyd's of Texas v. Feldman, 977 S.W.2d 568, 569 (Tex. 1998). When both parties move for summary judgment, each party must carry its own burden, and neither can prevail because of the failure of the other to discharge its burden. INAC Corp. v. Underwriters at Lloyd's, 56 S.W.3d 242, 247 (Tex. App.-Houston [14th Dist.] 2001, no pet.). Because each party was a movant, the burden for each was the same: to establish entitlement to a summary judgment by conclusively proving all the elements of the claim or defense as a matter of law. Id. In reviewing the trial court's rulings on these cross-motions, we must consider all summary-judgment evidence, determine all issues presented, and render the judgment that the trial court should have rendered. FM Props. Operating Co., 22 S.W.3d at 872.
III. ANALYSIS
A. Can an owner redeeming property under Tax Code section 34.21(a) pay the redemption premium by providing the purchaser with a promissory note?
The Bank asserts that the Wittenbergs redeemed the Property under Tax Code section 34.21(a) in December 2007. See TEX. TAX CODE ANN. § 34.21(a) (West 2008). Stockdick asserts that there was no redemption because the Wittenbergs provided a promissory note for the redemption premium, which Stockdick asserts does not constitute "paying" the redemption premium, as required by section 34.21(a). See id. To resolve this question, we must interpret the word "paying" as used in section 34.21(a). In construing a statute, our objective is to determine and give effect to the Legislature's intent. See Nat'l Liab. Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex. 2000). If possible, we must ascertain that intent from the language the Legislature used in the statute and not look to extraneous matters for an intent the statute does not state. Id. If the meaning of the statutory language is unambiguous, we adopt the interpretation supported by the plain meaning of the provision's words. St. Luke's Episcopal Hosp. v. Agbor, 952 S.W.2d 503, 505 (Tex. 1997). We must not engage in forced or strained construction; instead, we must yield to the plain sense of the words the Legislature chose. See id. In pertinent part, section 34.21 provides as follows:
Stockdick also asserts, without citing any authority, that the Bank "should be estopped from bringing this appeal" because the Bank is pursuing a claim to the Remaining Proceeds in the part of the Bank's petition that the trial court severed and transferred to the Tax Court. Even if these claims could be a basis for holding that the Bank is estopped from pursuing this appeal, in pleading these claims before they were severed, the Bank made it clear that the Bank's claims to the Remaining Proceeds were made subject to and without waiving its declaratory-judgment claims. Accordingly, Stockdick's argument lacks merit.
Section 34.21(a) gives a right of redemption also provided in article 8, section 13 of the Texas Constitution. See TEX. CONST. art. 8, § 13. The relevant language is substantially similar and, on appeal, the Bank has not referred to the constitutional right of redemption.
(a) The owner of real property sold at a tax sale to a purchaser other than a taxing unit that was used as the residence homestead of the owner . . . may redeem the property on or before the second anniversary of the date on which the purchaser's deed is filed for record by paying the purchaser the amount the purchaser bid for the property . . . plus a redemption premium of 25 percent of the aggregate total if the property is redeemed during the first year of the redemption period. . . .
. . .
(f) The owner of real property sold at a tax sale may redeem the real property by paying the required amount as prescribed by this section to the assessor-collector for the county in which the property was sold, if the owner of the real property makes an affidavit stating:
(1) that the period in which the owner's right of redemption must be exercised has not expired; and
(2) . . . that the owner and the purchaser cannot agree on the amount of redemption money due, or that the purchaser refuses to give the owner a quitclaim deed to the property.
(f-1) An assessor-collector who receives an affidavit and payment under Subsection (f) shall accept that the assertions set out in the affidavit are true and correct. The assessor-collector receiving the payment shall give the owner a signed receipt witnessed by two persons. The receipt, when recorded, is notice to all persons that the property described has been redeemed. The assessor-collector shall on demand pay the money received by the assessor-collector to the purchaser.
The redemption period for the Wittenbergs expired on March 20, 2010, the second anniversary of the date on which the purchaser's deed was filed for record. The versions of subsections (f) and (f-1) quoted above apply to redemptions that take place on or after September 1, 2009. See Act of May 21, 2009, 81st Leg., R.S., ch. 374, §§ 2, 3, 2009 Tex. Gen. Laws 913, 914. For redemptions occurring between June 5, 2007 and August 31, 2009, there was no subsection (f-1) of section 34.21, and the wording of subsection (f) was different; but the differences in these two versions of the statute are not material to the statutory construction issue in this case. Therefore, we have cited the current version.
TEX. TAX CODE ANN. § 34.21 (West Supp. 2010) (emphasis added). The parties have not cited and research has not revealed any cases addressing (1) the meaning that should be given to the terms "paying" or "pay" in this statute or (2) whether providing a promissory note to the purchaser constitutes "paying" within the meaning of this statute. The statute does not define the terms "paying" or "pay," so we construe these terms based on their ordinary meaning. See City of San Antonio v. Hartman, 201 S.W.3d 667, 672 n. 19 (Tex. 2006). But, the verb "to pay" has various meanings in ordinary usage, including both to give money to another and to give to another what is due. See WEBSTER'S THIRD NEW INT'L DICTIONARY 1659 (1993 ed.) (stating various definitions for "to pay," including "to . . . discharge an obligation to: make due return to" and "to make any agreed disposal or transfer of (money)").
Our construction of the word "paying" in subsection (a) of section 34.21 is informed by subsections (f) and (f-1) of this statute. Under the latter subsections, if the owner and the purchaser cannot agree on the redemption amount or if the purchaser refuses to give the owner a quitclaim deed to the property, the owner may redeem the property by "paying" the redemption amount to the assessor-collector for the county in which the property was sold, if the owner submits an affidavit that complies with section 34.21(f). See TEX. TAX CODE ANN. § 34.21(f), (f-1). Significantly, in subsection (f), the Legislature refers to the redemption amount to be paid under subsection (a) as "the amount of redemption money due." TEX. TAX CODE ANN. § 34.21(f) (emphasis added). In addition, after the owner has paid the assessor-collector, the assessor-collector shall give the owner a signed receipt and "shall on demand pay the money received by the assessor-collector to the purchaser." TEX. TAX CODE ANN. § 34.21(f-1) (emphasis added). If the owner could "pay" the assessor-collector by providing a promissory note for the redemption amount, then the assessor-collector would not have received any money, yet subsection (f-1) states that "paying" the assessor-collector results in receipt of money by the assessor-collector. Under the unambiguous language of subsections (f) and (f-1), to "pay" the assessor-collector, the owner must give money to the assessor-collector. It would not be reasonable to construe the word "paying" to have a different meaning in subsection (a) of section 34.21 than it has in subsection (f).
In some cases courts state that a proper tender of the required amount of money is sufficient to redeem property under section 34.21. See Jensen v. Covington, 234 S.W.3d 198, 206-07 (Tex. App.-Waco 2007, pet. denied). Though a proper tender likely would be considered paying the money, we need not and do not address this subject because there is no issue as to whether the Wittenbergs made a proper tender.
In addition, though some purchasers at tax sales may be favorably disposed to a redemption under section 34.21 by the owner, other purchasers may not want the property to be redeemed and may insist that all the requirements of the statute be satisfied. It is reasonable to expect that many owners whose real property is sold at a tax sale are experiencing financial difficulties. In this context, it would not be reasonable to allow an owner to redeem the property based on a promise to pay, especially when the purchaser bought the property by paying cash at a tax sale.
As the Bank notes, the Supreme Court of Texas has stated that "statutes which give the right to redeem are to be regarded favorably and construed with liberality." Buckholts v. Alsup, 56 S.W.2d 301, 305 (Tex. App.-Texarkana 1932, writ ref'd). Under this rule, we must construe section 34.21(a) liberally. See id. But we cannot use this doctrine of liberal construction as a license to contradict the plain meaning of this statute. See State v. PR Investments, 180 S.W.3d 654, 665 (Tex. App.-Houston [14th Dist.] 2005) (en banc), aff'd, 251 S.W.3d 472 (Tex. 2008).
In cases decided after 1927, the Supreme Court of Texas's notation of "writ refused" denotes that the court of appeals' opinion is the same as a precedent of the Supreme Court of Texas. See Yancy v. United Surgical Partners Int'l, Inc., 236 S.W.3d 778, 786 n. 6 (Tex. 2007); see also State Farm Fire Cas. Co. v. Gandy, 925 S.W.2d 696, 707 (Tex. 1996) (referring to a "writ refused" court of appeals opinion as an opinion of the Supreme Court of Texas).
The Bank also asserts that the Wittenbergs were not required to strictly comply with the requirements of section 34.21 and that substantial compliance was sufficient. Though other Texas intermediate courts of appeals have held to this effect, the parties have not cited and research has not revealed any case from the Supreme Court of Texas or this court addressing this issue. We presume for the sake of argument that the Wittenbergs were only required to substantially comply with section 34.21. But, even under this presumption, we conclude that providing a promissory note as "payment" of the redemption premium does not constitute substantial compliance with section 34.21. See Burd v. Armistead, 982 S.W.2d 31, 35 (Tex. App.-Houston [1st Dist.] 1998, pet. denied) (holding that tender of amount that was more than sixty percent of the redemption amount under section 34.21 did not constitute substantial compliance).
The Bank also relies on the opinion of the Tenth Court of Appeals in Jensen v. Covington. See 234 S.W.3d 198, 206-07 (Tex. App.-Waco 2007, pet. denied). But the Jensen court did not address the meaning that should be given to the term "paying" in section 34.21 or whether providing a promissory note to the purchaser constitutes "paying" within the meaning of this statute. See id. Instead, the Jensen court concluded that tender of the redemption amount would be sufficient to comply with section 34.21 and then examined whether the tender in that case was a sufficient tender. See id. The Jensen case is not on point.
For the reasons stated above, we conclude that, to the extent the ordinary meaning of "paying" would allow an owner to redeem property under section 34.21(a) by giving a promissory note to the purchaser for all or part of the redemption amount, this construction would be unreasonable. Under the unambiguous language of the statute, an owner may not provide a promissory note to the purchaser to satisfy the requirement of "paying" the redemption amount under section 34.21(a). Therefore, the Wittenbergs did not satisfy the requirements of section 34.21(a).
B. Did the trial court err by granting summary judgment based on the substantial-compliance or reservation-of-vendor's-lien grounds asserted by Stockdick?
In its first summary-judgment ground, Stockdick asserted that the Wittenbergs did not redeem the Property because they did not comply or substantially comply with the requirement that they pay Stockdick $92,500 in cash, which was the 25% premium required by section 34.21. See TEX. TAX CODE ANN. § 34.21(a). In its second summary-judgment ground Stockdick asserted that it maintained superior title to the Property by reserving a vendor's lien to secure payment of the Note. In response, the Bank asserted that the doctrine of quasi-estoppel precluded Stockdick from denying that the Deed effected a redemption of the Property.
The Bank sufficiently pleaded quasi-estoppel. See Steubner Realty 19, Ltd. v. Cravens Road 88, Ltd., 817 S.W.2d 160, 164 (Tex. App.-Houston [14th Dist.] 1991, no writ).
The doctrine of quasi-estoppel precludes a party from asserting, to another's disadvantage, a right inconsistent with a position previously taken. See Steubner Realty 19, Ltd. v. Cravens Road 88, Ltd., 817 S.W.2d 160, 164 (Tex. App.-Houston [14th Dist.] 1991, no writ). This doctrine applies when it would be unconscionable to allow a party to maintain a position inconsistent with one in which it acquiesced, or from which it accepted a benefit. See Curry v. Pickett, No. 14-09-00188-CV, 2010 WL 3353952, at *4 (Tex. App.-Houston [14th Dist.] Aug. 26, 2010, no pet.) (mem. op.); Steubner Realty 19, Ltd., 817 S.W.2d at 164. This principle precludes a party from accepting the benefits of a transaction and then taking a subsequent inconsistent position to avoid corresponding obligations or effects. See Cambridge Production, Inc. v. Geodyne Nominee Corp., 292 S.W.3d 725, 732 (Tex. App.-Amarillo 2009, pet. denied).
In its appellate brief, Stockdick states that parties can agree to modify their statutory rights by insisting on some but not all of these rights. Stockdick indicates that it made such an agreement in December 2007, but that the Wittenbergs did not comply with the terms of that agreement and therefore failed to satisfy the requirements of section 34.21 as modified by the parties' agreement. Stockdick concedes that the December 2007 transaction between the Wittenbergs and Stockdick constituted an agreement by Stockdick as to the manner by which the Wittenbergs could redeem the Property, and Stockdick cites the documents from this transaction, including the Deed, as evidence of this agreement. This raises the issue of the terms to which Stockdick agreed in December 2007. Stockdick asserts that it agreed the Wittenbergs could redeem the Property by paying $370,000 in cash and then paying the amounts due under the Note on or before July 31, 2008.
Section 34.21 indicates that after the owner of real property sold at a tax sale redeems the property from the purchaser under section 34.21(a), the purchaser should give the owner a quitclaim deed transferring title to the property from the purchaser to the owner. See TEX. TAX CODE ANN. § 34.21(f). The undisputed summary-judgment evidence shows that Susan Wittenberg held title to the Property when it was sold at the tax sale and that Stockdick purchased the Property at the tax sale for $370,000. The Deed was a quitclaim deed, in which Stockdick transferred title to the Property to the former owner and her husband for an expressly stated consideration of $370,000 in cash and the Note. See Geodyne Energy Income Prod. P'ship I-E v. Newton Corp., 161 S.W.3d 482, 486-87 (Tex. 2005) (concluding that assignment and bill of sale that never stated the nature or percentage interest that was being conveyed and expressly disclaimed warranty of title was a quitclaim deed). The Deed, which was executed by Stockdick and recorded in the Harris County Real Property Records, expressly recites that it "is executed pursuant to redemption of the Property by [the Wittenbergs] from [the tax sale in question]." Under precedent from the Supreme Court of Texas "pursuant to redemption of the Property" means "in carrying out redemption of the Property." See Syntax, Inc. v. Hall, 899 S.W.2d 189, 191-92 (Tex. 1995) see also Bryan A. Garner, A Dictionary of Modern Legal Usage 454 (1987 ed.) (defining "pursuant to" as "in carrying out"). Therefore, Stockdick stated that the Deed was executed in carrying out redemption of the Property. See id. Stockdick did not state that redemption would occur in the future after the Wittenbergs paid the amounts due under the Note. Indeed, if the redemption were not to occur until the Note was paid in full, then one would expect that a quitclaim deed would not be executed until after the Note was paid.
Stockdick concedes and the record reflects that Tribus conveyed title to the Property to Susan Wittenberg by a deed filed for record in June 2006. The summary-judgment evidence does not reflect that Title to the Property was conveyed back to Tribus before the tax sale on June 5, 2007. Nonetheless, Stockdick asserts in its appellate brief that Tribus owned the Property at the time of the tax sale on June 5, 2007. That Tribus owned the Property when the tax collection suit was filed and that Tribus was personally liable for payment of the taxes did not prevent Tribus from conveying title to the Wittenbergs before the tax sale. See TEX. TAX CODE ANN. § 32.07 (West 2008) (stating that, with exceptions that do not apply to the case under review, property taxes are the personal obligation of the person who owns the property on January 1 of the year for which the tax is imposed and that such an owner is not relieved of this personal obligation because it no longer owns the property).
On the other hand, in the Deed, Stockdick stated that the Note was "secured by vendor's lien and superior title retained herein in favor of [Stockdick]." This language in the Deed indicates that as between Stockdick and the Wittenbergs, Stockdick retained superior title to the Property, giving Stockdick the option to treat the Deed as an executory contract and to choose to rescind this contract. See Minter v. Burnett, 38 S.W. 350, 353 (Tex. 1896) (stating that reservation to grantor of superior title is only for purpose of enforcing payment of purchase money and has no application as between grantee and third parties); Lusk v. Mintz, 625 S.W.2d 774, 775 (Tex. Civ. App.-Houston [14th Dist.] 1981, no writ) (discussing grantor's right to rescind based on vendor's lien). Stockdick also had the option to seek judicial foreclosure of the vendor's lien or to pursue nonjudicial foreclosure under the deed of trust. Though Stockdick chose to pursue foreclosure under the deed of trust and did not seek rescission based on the vendor's lien, the presence of language reserving a vendor's lien conflicts with the language indicating that the Deed is effecting a redemption of the tax sale. Such a redemption ordinarily would restore title to the Property to what it was before the tax sale — the Wittenbergs holding title subject to the Bank's Lien — except that the tax liens are discharged. See Assocs. Home Equity Servs. Co. v. Hunt, 151 S.W.3d 559, 561-62 (Tex. App.-Beaumont 2004, no pet.).
Though the Wittenbergs' execution of a promissory note and deed of trust may be unusual in the redemption context, it does not conflict with the nature of a redemption. See id. However, the reservation of a vendor's lien, with the accompanying right to rescind the Deed, raises issues as to whether the parties were seeking to provide security for the Note given in the December 2007 redemption but did not realize that this language would give Stockdick a right to rescind, whether the parties intended to agree to a redemption in December 2007 subject to a right by Stockdick to seek rescission of the redemption by using the vendor's lien, or whether the parties did not intend a redemption in December 2007. We conclude that there is more than one reasonable construction of the language of the Deed and that the Deed is ambiguous in this regard.
But, after the Wittenbergs failed to pay the Note, Stockdick asserted that no redemption had occurred in December 2007, and that Stockdick is entitled to keep the $370,000. On this record, there is a genuine fact issue as to whether it would be unconscionable to allow Stockdick to maintain this position and as to whether this position is inconsistent with Stockdick's position as stated in the Deed, a prior position from which Stockdick accepted a $370,000 benefit. Under the circumstances reflected by the summary-judgment evidence and based on the ambiguous language in the Deed, we conclude that there is a genuine fact issue as to whether Stockdick is precluded under the doctrine of quasi-estoppel from denying that the Wittenbergs redeemed the Property through the Deed in December 2007. See Steubner Realty 19, Ltd., 817 S.W.2d at 164. Therefore, the trial court erred to the extent it granted Stockdick's motion for summary judgment based on the first two grounds.
C. Did the trial court err in granting summary judgment on the ground that the Bank waived its right to assert that a redemption occurred?
In its third summary-judgment ground, Stockdick asserted that as a matter of law the Bank waived its contention that the Wittenbergs redeemed the Property. Stockdick relies on a September 2008 letter from David Petroni, a manager at Carrington Mortgage Services, LLC. In the letter, Petroni states that Carrington has an active loan on the Property and wants to regain possession of the Property. Petroni asks for a redemption quote. The letter indicates that Petroni believed in September 2008 that the Property had not been redeemed. But, there is no summary-judgment evidence that Carrington or Petroni were agents of the Bank. Even if they were the Bank's agents, there is no evidence that Petroni was aware of the Deed, and the belief of one of the Bank's agents that no redemption had occurred would not operate to waive as a matter of law the Bank's right to assert that a redemption had occurred or that Stockdick was estopped from denying that a redemption had occurred.
Stockdick also asserts that the Bank made the conscious decision not to redeem the Property, not to participate in the foreclosure sale on November 4, 2008, and not to seek an injunction of this sale. Presuming for the sake of argument that the Bank made these conscious decisions, the Bank would not thereby waive its right to assert that a redemption had occurred or that Stockdick was estopped from denying that a redemption had occurred. The only case that Stockdick cites is Rotge v. Murphy. See 198 S.W.2d 932, 935-36 (Tex. Civ. App.-San Antonio 1946, writ ref'd n.r.e.). That case did not involve a deed like the Deed in the case under review or issues of estoppel or whether a redemption had occurred. See id. In Rotge, the former owner did not make any attempt to redeem the property before the end of the redemption period; rather, she filed suit alleging that the tax sale was void. See id. She then argued that if she were unsuccessful in that suit she should be allowed to redeem the property even though the deadline had passed. See id. The court did not hold that she had waived her right to redeem by filing suit; rather, the court held that it was too late for her to redeem the property. See id. The summary-judgment evidence does not prove as a matter of law that the Bank intentionally relinquished its right to pursue the claims it is asserting in this case. The trial court erred to the extent it granted Stockdick's motion for summary judgment based on the third summary-judgment ground.
D. Did the trial court err in granting summary judgment on the ground that the Bank cannot assert its claims under the Declaratory Judgments Act?
In its fourth summary-judgment ground, Stockdick asserted that the Bank cannot assert these claims under the Declaratory Judgments Act because the Bank seeks a determination of title to real property that may only be made in a trespass-to-try-title action. The Bank has sought relief only under the Declaratory Judgments Act. Under this statute, "[a] person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder." TEX. CIV. PRAC. REM. CODE ANN. § 37.004(a) (West 2008). In this suit, the Bank seeks a declaratory judgment determining issues as to whether a redemption of the Property occurred and whether the Bank's Lien is still a valid lien on the Property. These issues involve the construction of the Deed.
Stockdick is the current owner of the Property. If the Bank succeeds in its arguments regarding the Deed and estoppel, then the Property is subject to the Bank's Lien. If not, then the Property is not subject to the lien. In any event, title to the Property or to the liens is not in question. Stockdick relies upon Southwest Guaranty Trust Co. v. Hardy Road 13.4 Joint Venture. See 981 S.W.2d 951 (Tex. App.-Houston [1st Dist.] 1998, pet. denied). In that case, the court determined that the substance of the plaintiff's case was a suit to quiet title, in which attorney's fees are not recoverable. See id. at 957. The court held that the trial court did not abuse its discretion in denying attorney's fees because it could have determined that the plaintiff could not use the Declaratory Judgments Act to obtain attorney's fees for a case that was really a suit to quiet title. See id. Stockdick also cites other cases in which courts have held that the Declaratory Judgments Act cannot be used when the substance of the suit is one to remove a cloud on title to real property or a suit over a boundary dispute between owners of real property. The substance of the Bank's suit is not one to quiet title, to remove a cloud on title to real property, or to resolve a boundary dispute. Therefore, these cases are not on point.
If the Bank succeeds in its estoppel arguments, then Stockdick would be estopped from denying that a redemption occurred in December 2007, resulting in the reinstatement of the Bank's Lien. Because Stockdick's Lien would be subordinate to the Bank's Lien, the foreclosure of Stockdick's Lien would not affect the Bank's Lien.
We conclude that the Bank can seek this declaratory relief and is not required to pursue a trespass-to-try-title action. See TEX. CIV. PRAC. REM. CODE ANN. § 37.004(a) (West 2008); Chase Home Finance, L.L.C. v. Cal Western Reconveyance Corp., 309 S.W.3d 619, 633-34 (Tex. App.-Houston [14th Dist.] 2010, no pet.); Red Rock Properties 2005, Ltd. v. Chase Home Finance, L.L.C., No. 14-08-00352-CV, 2009 WL 1795037, at *5-6 (Tex. App.-Houston [14th Dist.] June 25, 2009, no pet.) (mem. op.); Aquaduct, L.L.C. v. McElhanie, 116 S.W.3d 438, 444-45 (Tex. App.-Houston [14th Dist.] 2003, no pet.); Burd, 982 S.W.2d at 33 (affirming trial court's disposition of competing claims under the Declaratory Judgments Act as to whether a redemption occurred under section 34.21). The trial court erred to the extent it granted Stockdick's motion for summary judgment based on the fourth summary-judgment ground.
Having determined that none of grounds in Stockdick's motion for summary judgment provide a basis for affirming the trial court's judgment, we conclude that the trial court erred in granting the motion.
E. Did the trial court err in denying the Bank's summary-judgment motion?
On appeal, the Bank also asserts that the trial court erred in denying the Bank's motion for summary judgment. Though the Bank raised various issues, including estoppel, in response to Stockdick's summary-judgment motion, the Bank did not assert estoppel in its motion. Rather, the Bank moved for summary judgment based only on the grounds that, as a matter of law, the Wittenbergs redeemed the Property and therefore the Bank's Lien is now a valid first lien on the Property. These arguments lack merit for the reasons addressed in section III. A., above. Therefore, the trial court did not err in denying the Bank's motion for summary judgment.
IV. CONCLUSION
Under the unambiguous language of Tax Code section 34.21, an owner may not provide a promissory note to the purchaser to satisfy the requirement of "paying" the redemption amount under section 34.21(a). Therefore, the Wittenbergs did not satisfy the requirements of section 34.21(a) for redeeming the Property. Nonetheless, the trial court erred in granting Stockdick's summary-judgment motion, and there are genuine fact issues as to the meaning of the ambiguous language of the Deed and as to whether Stockdick is precluded under the doctrine of quasi-estoppel from denying that the Wittenbergs redeemed the Property through the Deed in December 2007. Because the Bank did not prove its entitlement to summary judgment on the grounds asserted in its summary-judgment motion, the trial court did not err in denying this motion. We reverse the trial court's judgment and remand for further proceedings.