Opinion
No. 14-01-01240-CV.
Opinion filed March 27, 2003.
Appeal from the 11th District Court, Harris County, Texas, Trial Court Cause No. 00-23660.
Reversed in Part and Remanded.
Panel consists of Chief Justice BRISTER and Justices HUDSON and FOWLER.
MEMORANDUM OPINION
In the latest episode of a long-running family dispute, the Rosalie Dahl Estate Trust ("Trust") brought suit to declare void a 1988 deed of property conveyed by Rosalie Dahl to two of her daughters and her son-in-law, appellants Arleen Dahl Dillon, Karen Moszkowicz, and Dominik E. Moszkowicz. Several years earlier, Mrs. Dahl had sued Arleen, Karen, and Dominik over the same deed, and the trial court reformed the deed to grant her a life estate. Mrs. Dahl then executed another deed to the property in 1997, this time to the Trust. In 1998, Mrs. Dahl executed a "corrected deed" containing an amended legal description. In the present lawsuit, appellees, the Trust, Rosalie Dahl as beneficiary of the Trust, and Ted Dahl as trustee of the Trust (collectively, Rosalie) argued that the 1988 deed was void because the legal description of the property was defective. The trial court — the same court that decided the earlier dispute — begrudgingly agreed and declared the 1988 deed void. On appeal, Arleen, Karen, and Dominik contend the trial court erred because the present suit was barred by res judicata, or, alternatively, the legal description of the property was not void and should have been reformed.
Ted Dahl is Rosalie Dahl's son.
Separately, appellant Madeline D. Sitzes, an attorney who represented Arleen, Karen, and Dominik in the earlier lawsuit, and received from them an interest in the property as payment for legal fees, joins the other appellants in arguing that the deed is not void. She also appeals the trial court's dismissal of her counterclaims for want of prosecution and the assessment of costs against her. Among other things, Sitzes contends that (1) the parties entered into a Rule 11 agreement to sever and abate the claims against Rosalie and Ted Dahl individually, (2) the judgment did not dispose of all parties and claims, and (3) the trial court erred by not permitting her to present evidence on a motion for sanctions filed after appellees nonsuited their claims against her. Appellees have moved for sanctions against Sitzes for filing a frivolous appeal.
We first address one of the issues raised by Arleen, Karen, and Dominik. We next address attorney Sitzes' issues, and we conclude with a discussion of the motions for sanctions brought by Rosalie and Ted Dahl individually. For the reasons stated below, we reverse the trial court's judgment in part and remand, and we impose sanctions against Sitzes in the amount of $500.00 for filing a frivolous appeal.
ARLEEN, KAREN, AND DOMINIK'S APPEAL
Arleen, Karen, and Dominik present three issues on appeal: (1) the trial court erred in refusing to follow its ruling in the earlier suit; (2) the trial court erred in declaring the deed void; and (3) the trial court erred in denying a request to reform the deed. Because we sustain their third issue — that the trial court erred in refusing to reform the deed — we will not discuss their other two issues. We will address only their third issue, which we conclude disposes of the entire appeal.
1. The trial court erred in refusing to reform the deed.
In their third issue, Arleen, Karen, and Dominik contend that the trial court erred in refusing to reform the deed. We agree.
a. The Record Reveals Mutual Mistake .
Appellants argue the trial court should have reformed the deed because, through a mutual mistake by both the mother and appellants, the original deed and the reformed deed from the first lawsuit did not accurately describe the property meant to be conveyed. See Davis v. Grammar, 750 S.W.2d 766, 767-768 (Tex. 1988). They claim this is evidenced by the fact that the parties went through the earlier lawsuit and obtained a judgment containing an erroneous legal description.
A mutual mistake of fact in a deed may be grounds for reformation when the mistake constitutes a material inducement to the transaction. Tex. Jur. 3D Deeds § 167 (1998).
A mutual mistake is an erroneous Y conception or conviction induced by Y misunderstanding of the truth common to the parties of the transaction, which results in some act or omission done or suffered erroneously by one or both of the parties without its erroneous character being intended or known at the time. Relief from the effects of mutual mistake in a deed may be granted where the parties, under a mutual mistake, include in the deed property other than that intended to be conveyed.
Id.; see also Thalman v. Martin, 635 S.W.2d 411, 413 (Tex. 1982) (holding party was entitled to equitable remedy of reformation of deed when parties had reached agreement, but deeds did not reflect the true agreement because of mutual mistake).
This case provides a textbook example of mutual mistake. Mrs. Dahl testified that her mother conveyed to her the property that she was living on at 1006 Fries Road. She said that she, in turn, intended to convey to Arleen, Karen, and Dominik the same property. She told them of her intent and so, presumably to avoid her having to pay for the preparation of the deed or to move the process along, they had their lawyer obtain the property description and include it in a deed for them; this became the 1988 deed. But what Arleen, Karen, and Dominik did not know, and their lawyer did not discover, was that the property records contained an original deed to Mrs. Dahl, and then a later, corrected deed to her. The corrected deed contained the correct description of the property at 1006 Fries Road. Without Arleen, Karen, Dominik, or Mrs. Dahl's knowledge, Arleen, Karen, and Dominik's lawyer used the wrong property description contained in the original deed. But the parties still executed the document. The parties' subsequent behavior demonstrates they believed the deed to be correct.
In the 1995 lawsuit — the first suit — Mrs. Dahl sued, trying to get the property back, because she was afraid her children were going to sell the property, leaving her without a home to live in for the remainder of her life. The trial court did not award the property back to Mrs. Dahl, but did grant her a life estate in the property. No claim was ever made that the deed was defective. In fact, the court and the parties used the 1988 deed as the correct language and added the life-estate language to it.
Clearly, all of the parties still mistakenly believed that the deed correctly described the property. It was not until after this suit that Mrs. Dahl, apparently still very unhappy with Arleen, Karen, and Dominik, somehow realized that the 1988 deed she executed contained the incorrect property description or, better put, no property description at all.
This evidence proves mutual mistake.
b. Does the Record Reveal the Proper Legal Description ?
Rosalie maintains that appellees still cannot prevail because they offered no evidence of the proper legal description. Appellants, however, assert that the 1988 deed's legal description can be replaced with the legal description in the 1998 corrected deed describing the property that Mrs. Dahl placed in the Trust.
It is evident from Mrs. Dahl's own testimony and actions that she intended to convey the same property two times: first to appellants and later to the Trust. She testified that in 1988, she intended to convey to Arleen, Karen, and Dominik the property she received from her mother, and in 1997, she deeded the same property to the Trust because she wanted it back. She did this because she was unsuccessful in her earlier attempt to get her property back, and because she realized the 1988 deed did not describe her property at 1006 Fries Road. She then filed the 1998 corrected deed to correct the property description in the earlier deed, and later (in 2000) filed a declaratory judgment action stating that she, alone, owned the property and that Arleen, Karen, and Dominik had placed a cloud on her title.
The record also contains the deposition testimony of a surveyor named Jakubik, who used the legal description taken from the 1998 corrected deed to demonstrate the difference between it and the 1988 deed. In the lawsuit below, Mrs. Dahl relied upon the legal description in the 1998 corrected deed to support her claims that (1) the 1988 deed was defective and (2) the 1998 corrected deed accurately reflected the property she intended to convey to the Trust.
Although she did not state her reasons this directly, this conclusion is implicit in her testimony and the only conclusion to reach from it. What she did say directly is that she was told the 1988 deed did not correctly describe the property, and so she filed the corrected deed and transferred the property described in the corrected deed into her own trust because she "wanted the property back from her daughters." The only logical conclusion to reach from this is that she filed the 1998 corrected deed because it correctly described her property at 1006 Fries Road.
This evidence establishes that the 1998 corrected deed contains the correct property description for the property at 1006 Fries Road.
c. Rosalie's claim that appellants still cannot prevail .
But, even if mutual mistake is proved, and even if the record contains an appropriate property description — both of which we have held — Rosalie raises two reasons she believes Arleen, Karen, and Dominik still cannot prevail. First, she argues that the grantee of a gift conveyance may not maintain an action to reform a deed. However, appellants did not initiate an action for reformation, they sought reformation in response to Rosalie's lawsuit. Moreover, the trial court expressly refused proposed findings of fact and conclusions of law that the 1988 deed was a gift deed, and Rosalie Dahl's pleading in the earlier lawsuit specifically alleged that consideration was paid for the deed.
Second, Rosalie argues that the claim for reformation is barred by limitations.
A suit for reformation of a deed is governed by the four-year statute of limitations. See Tex. Civ. Prac. Rem. Code Ann. § 16.051 (Vernon 1997); Brown v. Havard, 593 S.W.2d 939 (Tex. 1980). Rosalie argues that the statute of limitations begins to run from the time of the delivery of the deed, and that a grantee is charged with knowledge of the recitals in the deed. See Carminati v. Fenoglio, 267 S.W.2d 449, 452 (Tex.Civ.App.-Fort Worth 1954, writ ref'd n.r.e.); Texas Osage Coop. Royalty Pool v. Colwell, 205 S.W.2d 93, 96 (Tex.Civ.App.-Amarillo 1947, writ ref'd n.r.e.). This rule is not set in stone, as Rosalie would have us believe.
In Sullivan v. Barnett, the Texas Supreme Court explained that the presumption that a grantor or grantee has immediate knowledge of a mutual mistake contained in a deed is rebuttable, and there are various circumstances, such as subsequent conduct of the parties, that will excuse a delay in discovery of the mutual mistake. 471 S.W.2d 39, 45 (Tex. 1971). The Court went on to state the now well-recognized rule that "once the presumption of immediate knowledge is rebutted, the statute of limitation will commence to run when the mutual mistake was, or in the exercise of reasonable diligence should have been, discovered." Id.; see also Escamilla v. Estate of Escamilla by Escamilla, 921 S.W.2d 723, 727 (Tex.App.-Corpus Christi 1996, writ denied) ("The discovery rule may extend limitations until the party seeking reformation knew, or in the exercise of reasonable diligence should have known, of the mistake in the deed.").
Because reformation is an equitable remedy, courts have, in certain instances, determined that the statute of limitations does not apply when its application would produce an inequitable result. For example, in Barnett, the court noted that when no rights of bona fide innocent purchasers have intervened, or would be impacted, (1) actions or defenses by persons in peaceable possession based upon mutual mistakes in deeds, and (2) removal of clouds from title, are not barred by the four-year statute of limitation. Barnett, 471 S.W.2d. at 47; see also Texas Co. v. Davis, 113 Tex. 321, 336, 254 S.W. 304, 309 (1923) (holding that action to remove cloud on title to real estate is continuing and never barred while cloud exists); Terry v. Baskin, 44 S.W.2d 929, 932-33 (Tex. Comm'n App. 1932, holding approved) (allegation of fraud by defendants in possession of property as defense to plaintiff's action for partition and sale not barred by statute of limitations).
Our review of these and other cases convinces us that equity bars the application of the statute of limitations here. Here, Mrs. Dahl testified that, when she executed the 1988 deed, she intended to convey the property at 1006 Fries Road to her daughters and son-in-law. Thereafter, she became dissatisfied with them and filed a lawsuit in 1995 to get the property back. Instead, she was awarded only a life estate; she did not appeal this decision. At some point after that, although it is unclear from the record exactly when, Mrs. Dahl discovered the incorrect legal description. Seizing upon the error, she then reconveyed the property to the Trust (of which she was the beneficiary) and filed the present lawsuit. This time, she alleged that the 1988 deed was void because the legal description of the property was insufficient, that she owned the property described in the 1998 corrected deed, and that appellees had created a cloud on her title by pledging the property as security on a legal fee debt owed to Sitzes. By way of counterclaim, appellees sought reformation only in defense to Rosalie's claims. In this situation, it would be unfair and unjust to hold that the statute of limitations bars the reformation claim; the purpose of the reformation claim is to correct the deed so that it can carry out the original intentions of the parties. Rosalie's purpose in throwing up the statute of limitations as a bar to suit is to thwart the parties' original intentions. In cases of mutual mistake as here, equity does not favor such a bar. See Barnett, 471 S.W.2d at 47. We also believe that it contradicts public policy favoring finality of judgments to hold that limitations should bar a party from presenting evidence that would uphold a judgment based on a deed all parties thought was correct.
In short, in this case, both equity and public policy favor allowing Arleen, Karen, and Dominik to present their evidence of mutual mistake. The only policy that favors Rosalie's position is the policy that suits should be brought within a certain amount of time. However, that policy is based on the belief that parties to a transaction should not be subject to suit forever and, especially in the case of land, the more time that elapses, the more likely it is that a third party's rights will be impacted. However, here, neither aspect of the policy is violated. First, the party trying to undo the original transaction is also the party trying to assert limitations; this type of offensive — rather than defensive — use of the procedural device of limitations is unfair. Second, no third parties' rights will be impacted by allowing the parties to present evidence of mutual mistake; the only parties involved are the ones who entered into the original transaction.
In short, we find that the trial court erred in refusing to reform the 1988 deed to contain the legal description of the property contained in the 1998 corrected deed.
Accordingly, we sustain Arleen, Karen, and Dominik's third issue and order the 1988 deed reformed to include the following legal description:
Being part of Lots Eighteen (18) and Nineteen (19) in the unrecorded subdivision of John Fries, a 51 acre tract out of the A. H. Osborne survey, A-610 in Harris County, Texas, and being more particularly described by metes and bounds as follows:
BEGINNING at an iron rod in the Southwest corner of Lot No. 19, being at the intersection of the East line of Fries Road and the North property line of the MK T Railway property;
Thence N 89° 44' 00 E, along the North right-of-way line of the MK T Railway, a distance of 242.69 feet to an iron rod for a corner;
Thence N 00° 26' 09" W, a distance of 174.49 feet to an iron rod for a corner;
Thence S 89° 23' 40" W a distance of 242.97 feet to an iron rod in the East right-of-way line of Fries Road and being 30 feet South of the Northwest corner of Tract No. 18;
Thence S 00° 32' 31" E 169.90 feet to the Place Of Beginning, and containing .96 acres of land.
We further order that the above reformation is retroactive to July 22, 1988 to effect the intent of Rosalie Dahl at the time she executed the deed. In so doing, we expressly incorporate the trial court's judgment in 1996 granting Rosalie Dahl a life estate in the property.
SITZES' APPEAL
In seventeen somewhat jumbled and overlapping issues, appellant Madeline Sitzes complains the trial court erred in (1) rendering judgment against her and dismissing her counterclaims for want of prosecution when the parties had entered into a Rule 11 agreement to sever and abate her counterclaims and third-party claims, (2) failing to dispose of all parties and claims in the judgment, (3) failing to permit her to present evidence on her motion for sanctions, (4) proceeding to trial without her when she was a necessary party, (5) declaring the deed void, (6) assessing costs against her, and (7) rendering judgment against her when she was not served with citation. We address each in turn.
1. The purported Rule 11 agreement.
In issues 1, 3, and 4, Sitzes contends the trial court erred in entering a judgment against her and dismissing her counterclaims for want of prosecution. Specifically, Sitzes claims the parties entered into a Rule 11 agreement in which they agreed that the defendants' counterclaims and third-party claims would be severed and abated until further notice from the court. Sitzes argues the trial court erred in entering a judgment against her because the plaintiffs nonsuited their claims against her before trial, and the Rule 11 agreement severed her counterclaims and third-party claims. Sitzes also argues that the trial court erred in dismissing her claims for want of prosecution because the Rule 11 agreement should have been enforced.
Based on record cites, it appears that Sitzes is referring to an alleged agreement apparently made between her and the other parties that her claims would be severed, and that discovery in the severed case would be abated until further notice. This agreement — if it was an agreement — was contained in a proposed order submitted to the court by which the court denied two motions for summary judgment. However, in addition to denying both motions for summary judgment, the court struck the entire paragraph containing the agreement to sever and abate. For several reasons, this proposed order does not accomplish what Sitzes hopes it did.
First, it does not qualify as a Rule 11 Agreement. Rule 11 of the Texas Rules of Civil Procedure provides that, unless otherwise provided in the rules, "no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record." Tex.R.Civ.P. 11. Although the proposed order was in writing and filed in the papers of the cause, it was approved only as to form. Nothing in order indicates all of the parties agreed to the severance and abatement.
A second, more fundamental, problem also exists. The court crossed out the entire paragraph, refusing to sever or to abate these claims. This decision — whether to sever and abate — was the court's to make. The rules of civil procedure give the court the authority to decide whether to sever or abate. See Tex.R.Civ.P. 41. The parties may request an abatement or a severance, but an abatement or severance will occur only on the court's approval or own motion.
In short, Sitzes' claims were properly before the court on the day of trial. The trial court entered a finding of fact that Sitzes was given notice of the trial setting, which Sitzes does not challenge. The trial court did not err in entering a judgment against her and in dismissing her claims for want of prosecution when she did not appear for trial, and we overrule issues 1, 3, and 4.
Moreover, Sitzes did not file a verified motion to reinstate challenging the trial court's dismissal of her claims. See Tex.R.Civ.P. 165a(3).
2. The effect of the judgment on the parties and claims.
In issues 7 through 9, Sitzes complains that the trial court did not dispose of all parties and claims in the judgment. Sitzes acknowledges that the judgment contains a "Mother Hubbard" clause stating that "[t]he court denies all relief not granted in this judgment." Nevertheless, she argues that the judgment did not dispose of her "cross-action" against Rosalie Dahl, Ted Emil Dahl individually, and against Ted Emil Dahl as trustee of the Rosalie Dahl Estate Trust, because they are not specifically mentioned in the judgment. In support of her contention, she cites Lehmann v. Har-Con Corp., 39 S.W.3d 191, 200 (Tex. 2001), for the proposition that to be a final judgment, a judgment must dispose of all claims and all parties. Apparently, Sitzes misunderstands the principles announced in Har-Con. In that case, the Texas Supreme Court held that a Mother Hubbard clause or its equivalent does not indicate that a judgment rendered without a conventional trial is final for purposes of appeal. See id. at 203-04. The Court reiterated that Mother Hubbard language in a judgment after a full trial on the merits, either to the bench or before a jury, indicates the trial court's intention to finally dispose of the entire matter, assuming that a separate or bifurcated trial is not ordered. Id. at 204. Therefore, contrary to Sitzes' assertion, the judgment's language indicating that the court was denying all relief not granted disposed of all of the claims and motions in the lawsuit.
One of Sitzes' arguments is that the judgment recites that her "counter-claims" are dismissed, but makes no mention of her "cross-claims" against Ted Emil Dahl individually, Ted Emil Dahl as trustee of the Rosalie Dahl Estate Trust, and Rosalie M. Dahl. However, Sitzes (and the other appellants) misidentified the claims. A "cross-claim" is a claim by one party against a co-party. See Tex.R.Civ.P. 97(e). Sitzes makes no claims against the other appellants; therefore, technically, she has made no cross-claims. To the extent her claims are directed to a party that is not a plaintiff or another defendant, her claim is properly identified as a third-party action. See Tex.R.Civ.P. 38. In any event, the misidentification does not affect our analysis of her complaint.
We overrule issues 7 through 9.
3. The motion for sanctions.
In issues 5, 6, 10, 11, and 12, Sitzes raises various complaints about a motion for sanctions she filed after Rosalie nonsuited her claims against Sitzes and before judgment was entered in the case.
A trial court's decision whether to award sanctions will be set aside only if it abused its discretion in making its decision. See Aldine Indep. Sch. Dist. v. Baty, 999 S.W.2d 113, 115 (Tex.App. — Houston [14th Dist.] 1999, no pet.). But Sitzes does not argue that the trial court abused its discretion in denying her motion for sanctions; her argument appears to be that a denial was improper because the judgment was not final — an assertion we have already rejected. Even if she had argued that the trial court abused its discretion, however, we would not have agreed. A review of her motion for sanctions reveals that it is rambling, largely incoherent, and devoid of any articulable basis for imposing sanctions. Sitzes filed a post-trial motion for new trial on her sanctions motion, which was denied, but she does not complain on appeal of the denial of the motion for new trial.
Therefore, we overrule issues 5, 6, 10, 11, and 12.
4. Trial in the absence of a necessary party.
In issue 13, Sitzes contends her presence was necessary for a just adjudication of the claims pertaining to the 1988 deed and Sitzes' deed of trust. She makes no argument in support of her contention, and her only citations to authority are general propositions of law relating to compulsory counterclaims. Sitzes also overlooks the fact that she was a party to the suit, but her claims were dismissed for want of prosecution. We find this issue both inadequately briefed and wholly without merit. We therefore overrule it.
5. The trial court's declaration that the 1988 deed was void.
In issues 14 through 16, Sitzes contends the trial court erred in declaring the 1988 deed void because the legal description was sufficient. Sitzes' entire support for these issues consists of a single block quote from one case setting out the general rules of law pertaining to the legal sufficiency of a property description in a deed. She does not apply these rules to the facts or make any argument in support of her contentions. Therefore, Sitzes has waived these issues by failing to properly brief them. See Tex.R.App.P. 38.1(h) (requiring that appellant's brief "must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record").
6. The assessment of costs.
In issue 2, Sitzes contends the trial court erred in granting judgment for costs against her because Rosalie was not the "successful" party as to Sitzes. See Tex.R.Civ.P. 131 (authorizing the recovery of costs to the successful party to a suit). She argues that Rosalie was not successful against her because Rosalie nonsuited her claims against Sitzes before trial, and the parties agreed to sever and abate the their claims against Rosalie in the Rule 11 agreement. She also contends the judgment is "vague and obscure" as to whether costs are awarded to Ted Dahl individually. We find these arguments meritless.
First, as discussed above, the trial court dismissed Sitzes' claims for want of prosecution, and the purported Rule 11 agreement was not accepted by the trial court. Given these facts, it is completely disingenuous for Sitzes to argue that Rosalie was not "successful" against her. Second, Sitzes' argument is based on the presumption that the trial court awarded costs under Rule 131. However, Rosalie sued for declaratory relief under the Uniform Declaratory Judgments Act, which specifically authorizes the trial court to award costs and attorney's fees in its discretion. See Tex. Civ. Prac. Rem. Code Ann. § 37.009 (Vernon 1997). Sitzes does not even address this basis for the recovery of costs. Finally, we disagree that the judgment is vague. The costs adjudged against Sitzes and the other named defendants were clearly awarded to the named plaintiffs only. We therefore overrule issue 2.
7. No citation.
In issue 17, Sitzes contends that the trial court erred in rendering judgment against her when she was never served with citation by Rosalie Dahl as beneficiary of the Rosalie Dahl Estate Trust or Ted Emil Dahl as trustee of the Rosalie Dahl Estate Trust, and they were never aligned as plaintiffs as recited in the judgment. Rosalie argues Sitzes has waived the issue because the argument section of her brief makes no mention of it, and nowhere in her brief does she cite the record in support of her contentions. In reply, Sitzes acknowledges her failure to brief the issue, and her only explanation for this is her "obvious negligence." We therefore overrule Sitzes' issue 17.
APPELLEES' MOTION FOR SANCTIONS
Appellees urge us to impose sanctions on Sitzes for filing a frivolous appeal. Having spent considerable time and effort addressing her seventeen issues, most of which were so poorly written it was difficult to discern her argument, and many of which — once we understood the rambling argument — were waived, irrelevant, or meritless, we agree.
Whether to grant sanctions is a matter of discretion, which we exercise with prudence, caution, and after careful deliberation. See Rios v. Northwestern Steel and Wire Co., 974 S.W.2d 932, 936 (Tex.App.-Houston [14th Dist.] 1998, no pet.). We consider the case from the viewpoint of the advocate and determine whether she had reasonable grounds to believe the judgment should be reversed. See id.
Here, it is evident that Sitzes did not sufficiently review the Texas Rules of Appellate Procedure or the legal issues involved. Instead, she raised seventeen issues — far more than the three issues raised by the other appellants — many of which were incoherent, illogical, and inadequately briefed. She should not have filed a brief that so unnecessarily burdened appellees and this Court and, being a lawyer, she should have known that the issues were either inadequately briefed or meritless.
Therefore, we grant appellees' motions for sanctions and impose sanctions in the amount of $500 against Sitzes. Of this total amount, Sitzes is ordered to pay $250.00 to appellees Rosalie Dahl Estate Trust, Rosalie Dahl, beneficiary of the Rosalie Dahl Estate Trust, and Ted Dahl, trustee of the Rosalie Dahl Estate Trust; and $250.00 to Ted Dahl, individually.
CONCLUSION
The judgment of the trial court is reversed in part and remanded for entry of a judgment in accordance with this opinion. We also impose sanctions on appellant Madeline Sitzes in the amount of $500.00. We affirm the judgment in all other respects.