Opinion
No. 05-19-00563-CV
05-19-2020
CRESTOR GLOBAL INVESTMENTS DELAWARE LLC, Appellant v. WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF COLONY AMERICAN FINANCE 2015-1 MORTGAGE-BACKED NOTES, CHRISTOPHER CHAUVIN, INDIVIDUALLY, ET AL., Appellees
On Appeal from the 134th Judicial District Court Dallas County, Texas
Trial Court Cause No. DC-18-01477
MEMORANDUM OPINION
Before Chief Justice Burns, Justice Wright, and Justice O'Neill
Opinion by Chief Justice Burns
The Hon. Carolyn Wright, former Chief Justice of the Court of Appeals for the Fifth District of Texas at Dallas, Retired, sitting by assignment.
The Hon. Michael J. O'Neill, Justice of the Court of Appeals for the Fifth District of Texas at Dallas, Retired, sitting by assignment.
This appeal arises out of appellant Crestor Global Investments, LLC's ("Crestor") default on a commercial loan. Appellees Wilmington Trust, Colony American Finance Lender, LLC ("Colony American"), and Colony American Finance 2015-1 Ltd. ("Colony American Finance") (collectively "Lenders") are lenders in the loan's chain of title; appellee Christopher Chauvin is their lawyer. In two issues, Crestor contends the trial court erred by granting Lenders and Chauvin's no-evidence and traditional motions for summary judgment on its tortious interference and theft claims. We affirm.
Factual and Procedural Background
On June 10, 2015, Crestor, by and through its sole member, Okechukwu Desmond Amadi, entered into a $2,482,700 Loan Agreement with Colony American, which was secured by twenty-six rental properties (the "Properties") located in Tarrant and Dallas Counties. By assignment dated October 29, 2015, Wilmington Trust became the owner and holder of the Loan.
We reference the Loan Agreement, Deeds of Trust, and all other related documents, including the applicable promissory note collectively as the "Loan."
Although Wilmington Trust did not record the assignment until February 23, 2018, the assignment was "effective as of the 29th day of October, 2015."
By August 2017, Crestor was four months behind on its loan payments. Chauvin, as Wilmington Trust's counsel, emailed Crestor a notice of impending legal action, including notice that Wilmington Trust sought to foreclose on the Properties and would request appointment of a receiver to oversee the sales. Chauvin attached a proposed Agreed Order Appointing Receiver to the email and sought Crestor's agreement to entry of the order. Because no agreement was reached, Wilmington Trust filed a lawsuit in Tarrant County and requested appointment of a receiver.
Chauvin communicated with Crestor through Amadi because Crestor did not identify any attorney.
Wilmington Trust set a hearing on its application for appointment of a receiver. By email, Chauvin notified Crestor about the hearing, but agreed to cancel it if Crestor agreed (1) to pay $137,468.34, the entire past due amount, in addition to the required monthly payment on or before September 9, and (2) sign the receivership order that day. When Crestor replied that it would make the payment, Chauvin sought confirmation that Crestor also agreed to entry of the receivership order, to which Crestor responded, "[a]greed." After Crestor failed to make the September 9 payment, Chauvin added Amadi's electronic signature to the order and filed the agreed receivership order in the Tarrant County trial court.
The Tarrant County trial court appointed a receiver to oversee the sale of the Properties, and the Properties were posted for February 2018 non-judicial foreclosure sales. The day before the scheduled sales, however, Crestor filed a counterclaim in the Tarrant County lawsuit and a new lawsuit in Dallas County, seeking injunctive relief to stop the foreclosure sales and asserting claims for declaratory judgment, tortious interference, violation of the Texas Theft Liability Act, breach of contract, "deficient notice of foreclosure," and fraudulent inducement. Wilmington Trust postponed the foreclosure sales.
Crestor also filed a Motion to Vacate Ab Initio Order Appointing Receiver and Plea to the Jurisdiction in the Tarrant County trial court, arguing the receivership order was unenforceable because (1) Wilmington Trust was not the "owner/holder" of the Loan and thus could not foreclose on the Properties, and (2) Wilmington Trust and Chauvin had forged Amadi's signature without Amadi's consent. After an evidentiary hearing, the trial court denied the motion and plea. Crestor immediately filed applications for temporary injunctions in both the Tarrant and Dallas County lawsuits and both were denied. After the Properties were sold, the Tarrant County trial court discharged the receiver.
By interlocutory appeal, Crestor challenged the order denying its motion to vacate the agreed receivership order. The Second Court of Appeals dismissed the appeal as moot, explaining it could not grant Crestor any relief regarding a motion to vacate appointment of a receiver who had already been discharged.
After the Tarrant County proceedings concluded, Wilmington Trust and Chauvin filed motions for no-evidence and traditional summary judgment on all of Crestor's claims in the Dallas County lawsuit. The trial court granted summary judgment on all of Crestor's claims. This appeal, challenging dismissal of only the theft and tortious interference claims, followed.
Discussion
I. Standard of Review
We review a trial court's grant of summary judgment de novo. Cmty. Health Sys. Prof'l Servs. Corp. v. Hansen, 525 S.W.3d 671, 680 (Tex. 2017). To prevail on a traditional motion for summary judgment, the movant must prove the absence of a genuine issue of material fact and its entitlement to judgment as a matter of law. Id. at 681; TEX. R. CIV. P. 166a(c). The evidence raises a genuine issue of material fact if reasonable and fair-minded jurors could differ in their conclusions in light of all the summary judgment evidence. Hansen, 525 S.W.3d at 681. A defendant is entitled to summary judgment on a plaintiff's claim if it conclusively negates at least one element of the cause of action. Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 508-09 (Tex. 2010).
A no-evidence summary judgment motion is essentially a motion for a pretrial directed verdict. To prevail, the nonmovant must produce more than a scintilla of evidence raising a genuine issue of material fact on the challenged elements. TEX. R. CIV. P. 166a(i); Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009); Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004).
In reviewing a summary judgment of either type, we credit favorable evidence to the nonmovant if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009) (traditional); Gish, 286 S.W.3d at 310 (no-evidence). If a no-evidence motion for summary judgment and a traditional motion for summary judgment respectively assert the plaintiff has no evidence of an element of its claim and alternatively assert the movant has conclusively negated the same element of the claim, we address the no-evidence motion for summary judgment first. See Ridgway, 135 S.W.3d at 600 ("We first review the trial court's summary judgment under the standards of Rule 166a(i)."). When, as here, the order granting summary judgment does not specify the grounds relied on, we must affirm if any summary judgment grounds are meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex. 2000).
II. Tortious Interference
In its first issue, Crestor contends the trial court erred by granting summary judgment on its tortious interference claim. Specifically, Crestor argues (1) it had an "ongoing business relationship with both the tenants of the real properties and was making payments to Colony American Finance 2015, Ltd.," (2) Wilmington Trust and Chauvin "wrongfully and illegally executed [Amadi's] name to an order on behalf of [Crestor] appointing receivership (without a Rule 11) and submitted it to the court," (3) Wilmington Trust "did not own the note or security instrument at the time it [filed] suit, which then (4) put in place a receiver that took the properties from [Crestor]." Crestor claims Wilmington Trust and Chauvin's actions prevented Crestor from obtaining rent money from its tenants, resulting in the foreclosures.
We begin by observing that in its original petition, Crestor asserted its tortious interference claim against Wilmington Trust only, and only with respect to the Loan. But on appeal, Crestor argues "there is ample evidence to support [Crestor's] tortious interference claim as to both [Chauvin and Wilmington Trust] as it relates to Crestor's rental contracts and the [L]oan." Because Crestor cannot expand the scope of its petition by either its summary judgment response or its opening brief to this Court, we address Crestor's tortious interference claim only as it pertains to Wilmington Trust. See Brown v. Shaffer, 942 S.W.2d 162, 164-65 (Tex. App.—Texarkana 1997, no writ) (in determining whether to grant summary judgment, trial courts should not consider allegations outside the scope of the petition); see also Willis v. Titan Contractors Corp., 625 S.W.2d 69, 74 (Tex. App.—Houston [14th Dist.] 1981, writ ref'd n.r.e.) ("A party cannot raise on appeal an issue which was not raised in the pleading and which was not before the trial court.").
i. Wilmington Trust could not tortiously interfere with its own Loan.
To establish a claim for tortious interference with an existing contract, a plaintiff must prove (1) an existing contract subject to interference, (2) by which the defendant willfully and intentionally interfered, (3) that proximately caused the plaintiff's injury, and (4) caused actual damage or loss. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). As a matter of law, a party cannot interfere with its own contract. In re Vesta Ins. Grp., 192 S.W.3d 759, 761 (Tex. 2006) (orig. proceeding) ("The obligation not to interfere with existing contracts is a general obligation imposed by law. But it is not imposed on the parties to that contract, as 'a party cannot interfere with its own contract.'") (emphasis original) (quoting Holloway v. Skinner, 898 S.W.2d 793, 796 (Tex. 1995)).
In support of its tortious interference claim, Crestor argues Wilmington Trust lacked standing to foreclose on the Properties because it was not the owner and holder of the Loan. Wilmington Trust and Chauvin respond, however, that the Tarrant County trial court already decided this issue to the contrary when it determined Crestor's plea to the jurisdiction and thus Crestor's argument is barred by collateral estoppel. We agree with Wilmington Trust and Chauvin.
A party is collaterally estopped from relitigating an issue if (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action. Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1994). An issue is fully and fairly litigated if it is properly raised, by the pleadings or otherwise, submitted for determination, and actually determined. Tenet Health Sys. Hosps. Dallas, Inc. v. N. Tex. Hosp. Physicians Grp., P.A., 438 S.W.3d 190, 203 (Tex. App.—Dallas 2014, no pet.).
Wilmington Trust's standing was fully and fairly litigated in the Tarrant County proceedings. Crestor filed a plea to the jurisdiction challenging Wilmington Trust's standing to enforce the Loan. After an evidentiary hearing, the trial court denied the plea, and Crestor did not raise this issue in its appeal to the Second Court of Appeals. Further, Wilmington Trust's standing was essential to the trial court allowing Wilmington Trust to foreclose on the Properties. See Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443-44 (Tex. 1993) (a party's standing to sue can never be presumed); see also Morlock, L.L.C. v. Bank of N.Y., 448 S.W.3d 514, 519 (Tex. App.—Houston [1st Dist.] 2014, pet. denied) (a secured creditor who owns the deed of trust has the right to foreclose on the property as a matter of law). Lastly, no dispute exists regarding Crestor's and Wilmington Trust's adversarial posture. By denying Crestor's plea to the jurisdiction, the Tarrant County trial court necessarily determined that Wilmington Trust was the owner and holder of the Loan. Accordingly, collateral estoppel bars Crestor's challenge to Wilmington Trust's standing.
In reaching this conclusion, we necessarily reject Crestor's contention that Wilmington Trust and Chauvin waived any argument regarding collateral estoppel by failing to raise it with sufficient specificity. In their motions for summary judgment and their brief to this Court, they asserted the Tarrant County court already "decided that [Wilmington Trust] properly enforced the Loan" by foreclosing on the Properties. We accordingly address Wilmington Trust and Chauvin's estoppel argument. See Williams v. Khalaf, 802 S.W.2d 651, 658 (Tex. 1990) (points of error should be construed liberally "in order to adjudicate justly, fairly and equitably the rights of the litigants."); Holley v. Watts, 629 S.W.2d 694, 696 (Tex. 1982) ("We look not only at the wording of the points of error, but to the argument under each point to determine as best we can the intent of the party.").
We thus agree with Wilmington Trust's contention that it was not a stranger to the Loan and every instance of alleged interference was actually Wilmington Trust exercising its contractual rights. See Flagstar Bank, FSB v. Walker, 451 S.W.3d 490, 497 (Tex. App.—Dallas 2014, no pet.) ("When there is an assignment, the assignee stands in the shoes of the assignor and may assert those rights that the assignor could assert, including bringing suit."). Wilmington Trust therefore conclusively negated the second element of Crestor's tortious interference claim: that Wilmington Trust willfully and intentionally interfered with the Loan. See Morgan Stanley & Co., Inc. v. Tex. Oil Co., 958 S.W.2d 178, 179 (Tex. 1997) ("a person must be a stranger to a contract to tortiously interfere with it"). For that reason, Wilmington Trust was entitled to no evidence summary judgment on Crestor's tortious interference claim. We overrule Crestor's first issue.
Crestor further "contests that it was actually in default" under the Loan. Based on our disposition, we need not address this argument.
III. Theft
In its second issue, Crestor contends the trial court erred by granting summary judgment on its theft claim. To establish a claim under the Texas Theft Liability Act ("TTLA"), a plaintiff must prove: (1) the plaintiff had a possessory right to property, (2) the defendant unlawfully appropriated the property with intent to deprive the owner of the property, and (3) the plaintiff sustained damages as a result of the theft. TEX. CIV. PRAC. & REM. CODE §§ 134.002(2), 134.003, 134.005(a); TEX. PENAL CODE §§ 31.03(a); 31.03(b). For purposes of liability under the TTLA, "theft" means "unlawfully appropriating property or unlawfully obtaining services as described by Section 31.03, 31.04, 31.06, 31.07, 31.11, 31.12, 31.13, or 31.14, Penal Code." TEX. CIV. PRAC. & REM. CODE §§ 134.002(2).
Crestor's arguments in support depend on its challenge to the receivership order's validity, which in turn rest primarily on two allegations: (1) Amadi never agreed to the receivership order's entry, and (2) Wilmington Trust and Chauvin signed Amadi's name on the order without Amadi's permission and without a Rule 11 agreement on file. Wilmington Trust and Chauvin again rely on collateral estoppel by asserting that the Tarrant County trial court already determined "Crestor unambiguously agreed to the . . . entry of the Agreed Receivership Order."
Crestor also re-urges its argument that "Wilmington Trust didn't own/hold the note or security agreement. Because we earlier addressed this argument, we will not address it there.
The receivership order's validity was fully and fairly litigated in the Tarrant County proceedings. Crestor filed a motion to vacate the receiver, arguing (i) Amadi never agreed to the order's entry, and (ii) Wilmington Trust and Chauvin forged Amadi's name on the order. In denying Crestor's motion, the Tarrant County trial court relied on Wilmington Trust and Chauvin's argument that Crestor had agreed to the receivership order, and expressly stated the court had "ample evidence" that Crestor agreed to that receivership.
The Tarrant County trial court also noted Crestor never objected to nor appealed from the appointment of the receiver. Because Crestor did not appeal from the order appointing the receiver, but rather—five months later—filed its motion to vacate, Crestor also waived any defect incident to the receiver's appointment. See TEX. CIV. PRAC. & REM. CODE § 51.014(a)(1) (a person may appeal from an interlocutory order of a district court that appoints a receiver); see also Long v. Spencer, 137 S.W.3d 923, 926 (Tex. App.—Dallas 2004, no pet.) ("[a] challenge to [a] receivership order after twenty days has passed is untimely and will be dismissed by the appellate court.").
Further, the receivership order's validity was essential to the judgment in Wilmington Trust's favor, which included rejection of Crestor's injunction. Lastly, no doubt exists as to the adverse relationship between Crestor and Wilmington Trust and Chauvin. We therefore conclude collateral estoppel precludes Crestor from challenging the receivership order's validity and reject Crestor's contention that Wilmington Trust and Chauvin "unlawfully appropriated [the] Properties without effective consent," by forging Amadi's signature on the agreed receivership order.
Because Crestor presented no additional evidence of unlawful appropriation, Wilmington Trust and Chauvin were entitled to no evidence summary judgment on Crestor's theft claim. We overrule Crestor's second issue.
Conclusion
We conclude the trial court did not err by granting summary judgment on Crestor's tortious interference and theft claims. Crestor was collaterally estopped from raising any issues regarding Wilmington Trust's standing and the receivership order's validity which, in turn, conclusively negated elements of both of Crestor's claims. We affirm the trial court's judgment.
/Robert D. Burns, III/
ROBERT D. BURNS, III
CHIEF JUSTICE 190563F.P05
JUDGMENT
On Appeal from the 134th Judicial District Court, Dallas County, Texas
Trial Court Cause No. DC-18-01477.
Opinion delivered by Chief Justice Burns. Justices Wright and O'Neill participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellees WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF COLONY AMERICAN FINANCE 2015-1 MORTGAGE-BACKED NOTES, CHRISTOPHER CHAUVIN, INDIVIDUALLY, ET AL. recover their costs of this appeal from appellant CRESTOR GLOBAL INVESTMENTS DELAWARE, LLC. Judgment entered May 19, 2020.