Opinion
No. 05-16-00471-CV
03-03-2017
DAVID HENDERSON AND KATHY HENDERSON, Appellants v. WELLS FARGO BANK, N.A., Appellee
On Appeal from the County Court at Law No. 2 Dallas County, Texas
Trial Court Cause No. CC-15-04766-B
MEMORANDUM OPINION
Before Justices Bridges, Myers, and Stoddart
Opinion by Justice Bridges
This appeal arises from a forcible detainer action in which the trial court granted summary judgment in favor of appellee Wells Fargo Bank, N.A. (Wells Fargo). Appellants David and Kathy Henderson (the Hendersons) argue the trial court improperly granted summary judgment based on insufficient and incompetent evidence. They further argue the trial court abused its discretion by denying their motion to abate and concluding it had jurisdiction to hear Wells Fargo's forcible detainer action before the right to title was properly adjudicated. We affirm the trial court's judgment.
Background
In March 2004, the Hendersons obtained a residential mortgage loan secured by a deed of trust for the property subject to this appeal. The Hendersons later defaulted on the loan, and Wells Fargo purchased the property on June 2, 2015 at a foreclosure sale for $150,067.29. The substitute trustee's deed contained sworn statements that the foreclosure sale complied with section 51.002 of the property code. The substitute trustee's deed also referenced the deed of trust, which provided:
On December 20, 2014, the Hendersons sent an "offer to perform upon debt validation," in which they acknowledge the efforts of a creditor to collect $200,258.69 on their mortgage loan. On February 17, 2015, the Hendersons executed a warranty deed conveying the property to the Fahamme Nation of Nations Foundation Trust, which states that it is "EFFECTIVE as of October 21, 2014." The Trust subsequently attempted to convey the property by quitclaim deed to Cherie Allen on September 20, 2015. Despite these alleged conveyances, the Hendersons still allege the property is their homestead.
If the Property is sold pursuant to Section 22, Borrower or any person holding possession of the Property through Borrower shall immediately surrender possession of the Property to the purchaser at that sale. If possession is not surrendered, Borrower or such person shall be a tenant at sufferance and may be removed by writ of possession or other court proceeding.According to Wells Fargo, the Hendersons then became tenants at sufferance after the foreclosure sale. Wells Fargo served the Hendersons with a notice to vacate, which they ignored.
Wells Fargo filed a petition for forcible detainer and then a motion for summary judgment arguing no genuine issues of material fact existed as to its ownership and superior right to possession of the property.
The Hendersons filed a response and objected to a portion of Wells Fargo's evidence. They filed a separate motion for summary judgment and motion to abate. In the motions, they argued the issue of title was intertwined with the issue of possession, which was being disputed separately in a district court lawsuit and a federal district court lawsuit. Because of these pending suits, they alleged a genuine issue of material fact existed to preclude summary judgment, and the title dispute precluded the court's jurisdiction.
Cherie Allen and the Fahamme Trust initiated this trespass to try title suit claiming a superior title to Wells Fargo.
The Hendersons filed this lawsuit against Wells Fargo asserting wrongful foreclosure.
The trial court granted Wells Fargo's summary judgment motion, denied the Hendersons' summary judgment motion and motion to abate, and overruled their objections to the summary judgment evidence. It ordered possession of the property to Wells Fargo. This appeal followed.
Jurisdiction
In their first issue, the Hendersons argue the trial court erred by concluding it had jurisdiction to hear Wells Fargo's forcible detainer case before the right to title was properly adjudicated. They contend the issue of title is so intertwined with the issue of possession that possession cannot be adjudicated without first determining title. We disagree.
Whether a court has subject matter jurisdiction is a question of law we review do novo. City of Dallas v. Carbajal, 324 S.W.3d 537, 538 (Tex. 2010).
The jurisdiction of forcible detainer actions is expressly given to the justice court of the precinct where the property is located and, on appeal, to county courts for a trial de novo. Rice v. Pinney, 51 S.W.3d 705, 708 (Tex. App.—Dallas 2001, no pet.). A justice court is not deprived of jurisdiction merely by the existence of a title dispute; it is deprived of jurisdiction only if resolution of the title dispute is a prerequisite to determination of the right to immediate possession. Rice, 51 S.W.3d at 709. This is true "even if the other action involves adjudication of matters that could result in a different determination of possession from the decision rendered in the forcible detainer suit." See Salaymeh v. Plaza Centro, LLC, 264 S.W.3d 431, 436 (Tex. App.—Houston [14th Dist.] 2008, no pet.).
Tenant-at-sufferance clauses separate the issue of possession from the issue of title. Smith v. Beneficial Fin. I, Inc., No. 05-14-00497-CV, 2015 WL 6777828, at *2 (Tex. App.—Dallas Nov. 6, 2015, no pet.) (mem. op.). Under such provisions, a foreclosure sale transforms the borrower into a tenant at sufferance who must immediately relinquish possession to the purchaser at the foreclosure sale, and defects in the foreclosure process are not relevant in the forcible detainer suit. Breitling v. LNV Corp., No. 05-15-00677-CV, 2016 WL 3625450, at *2 (Tex. App.—Dallas July 5, 2016, pet. dism'd w.o.j.) (mem. op.).
The general warranty deed at issue in this case contained a tenant-at-sufferance clause. The Hendersons have not challenged the validity of the tenant-at-sufferance clause, but rather argue Wells Fargo failed to conduct a proper foreclosure sale.
For example, in Yarbrough v. Household Finance Corporation, III, 455 S.W.3d 277 (Tex. App.—Houston [14th Dist.] 2015, no pet.), the court concluded the issue of title and possession was so intertwined as to preclude jurisdiction of the justice court when the buyer argued the deed of trust containing the tenants as sufferance provision was void due to forgery. In In re Gallegos, No. 13-13-00504-CV, 2013 WL 6056666, at *5 (Tex. App.—Corpus Christi Nov. 13, 2013, orig. proceeding) (mem. op.), the court determined there as an intertwined title issue when the defendant claimed the transaction creating the tenancy relationship was void under the Texas Constitution. The Hendersons have made no such arguments here.
The law is well-settled that defects in the foreclosure process are not relevant in a forcible detainer suit. Smith, 2015 WL 6777828, at *2; Yarbrough v. Household Fin. Corp. III, 455 S.W.3d 277, 280 (Tex. App.—Houston [14th Dist.] 2015, no pet.) ("When there is no dispute the parties agreed to a tenancy relationship in the event of foreclosure, the tenancy relationship provides an independent basis for resolving the issue of possession."). The alleged landlord-tenant relationship suffices as a basis for the forcible detainer action, even though the deed of trust may later be set aside for wrongful foreclosure or other reasons. See Villalon v. Bank One, 176 S.W.3d 66, 70 (Tex. App.—Houston [1st Dist.] 2004, pet. denied); see also Gardocki v. Fed. Nat'l Mortg. Ass'n, No. 14-12-00921-CV, 2013 WL 6568765, at *3 (Tex. App.—Houston [14th Dist.] Dec. 12, 2013, no pet.) (mem. op.) (recognizing that courts of appeals have consistently allowed forcible detainer actions to proceed based on a tenancy at sufferance clause without regard to whether the party seeking possession complied with terms of deed of trust).
Although the Hendersons seek to frame their issue as a jurisdictional challenge, they are ultimately attacking the validity of the property's foreclosure under paragraph 22 of the deed of trust—issues that can be litigated in the district court. See Gardocki, 2013 WL 6568765, at *3. Accordingly, the issues of possession and title are not intertwined, and the county court had jurisdiction over the possession issue. See Breitling, 2016 WL 3625450, at *2. We overrule the Hendersons' first issue.
Motion to Abate
In their second issue, the Hendersons argue the trial court erred by denying their motion to abate until the underlying causes of action challenging the right to title were adjudicated.
We review the trial court's denial of a motion to abate under an abuse of discretion standard. Ashton Grove L.C. v. Jackson Walker L.L.P., 366 S.W.3d 790, 794 (Tex. App.—Dallas 2012, no pet.). The trial court abuses its discretion when it acts in an unreasonable and arbitrary manner or without reference to any guiding rules or principles. Id.
The county court did not abuse its discretion by denying the Hendersons' motion to abate. It is well-established that forcible detainer actions may be brought and prosecuted concurrently with suits to try title in the district court. Rice, 51 S.W.3d at 709. Thus, we reject the argument that the title disputes were an impediment to the continuation of the forcible detainer suit.
Furthermore, the Hendersons' policy argument that allowing the cases to continue concurrently "could create a nightmare scenario where Appellants are forced to leave their home until they are successful" in the other suits, is not unique to their circumstances, "but rather challenges the wisdom of a legislative scheme that severs issues of immediate possession and title." See Gardocki, 2013 WL 6568765, at *5. A forcible detainer suit is intended to be a speedy, simple, and inexpensive means to regain possession of property. Fontaine v. Deutsche Bank Nat'l Trust Co., 372 S.W.3d 257, 259 (Tex. App.—Dallas 2012, pet. dism'd). If the court had granted the motion to abate, it would have ignored "the long-established legislative scheme of parallel resolution of immediate possession and title." Rice, 51 S.W.3d at 711. We overrule the Hendersons' second issue.
Summary Judgment
In their last two issues, the Hendersons argue Wells Fargo failed to produce competent summary judgment evidence establishing its superior right to possession as a matter of law. Wells Fargo responds the trial court properly overruled the Hendersons' evidentiary objections and granted summary judgment.
The standard of review for a traditional summary judgment is well known. See TEX. R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). We review a trial court's decision to grant or deny a motion for summary judgment de novo. Tex. Mun. Power Agency v. Pub. Util. Comm'n of Tex., 253 S.W.3d 184, 192 (Tex. 2007). We must determine whether the movant demonstrated that no genuine issues of material fact existed and it was entitled to judgment as a matter of law. Nixon, 690 S.W.2d at 548-49.
When reviewing a summary judgment, we must accept as true all evidence favorable to the non-movant and indulge every reasonable inference and resolve any doubts in the non-movant's favor. Provident Life and Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When both parties move for summary judgment on the same issues and the trial court grants one motion and denies the other, we review both parties' summary judgment evidence and determine all questions presented. Davis v. Tex. Mut. Ins. Co., 443 S.W.3d 260, 266 (Tex. App.—Dallas 2014, pet. denied). We review a trial court's decision to admit summary judgment evidence under an abuse of discretion standard. Holloway v. Dekkers, 380 S.W.3d 315, 319 (Tex. App.—Dallas 2012, no pet.).
To prevail and obtain possession in its forcible detainer action, the law required Wells Fargo to show: (1) the substitute trustee conveyed the property by deed to Wells Fargo after the foreclosure sale; (2) the Hendersons became a tenant-at-sufferance when the property was sold under the deed of trust; (3) Wells Fargo gave proper notice to the Hendersons requiring them to vacate the premises; and (4) the Hendersons refused to vacate the premises. TEX. PROP. CODE ANN. §§ 24.002(a)(2), (b), 24.005; see also U.S. Bank Nat'l Ass'n v. Freeney, 266 S.W.3d 623, 625 (Tex. App.—Dallas 2008, no pet.).
In support of its motion for summary judgment, Wells Fargo relied on three documents: (1) the substitute trustee's deed; (2) the deed of trust; and (3) the notice to vacate. The Hendersons argue the evidence does not establish that Wells Fargo conducted a "public sale at auction" as required under property code section 51.002. See TEX. PROP. CODE ANN. § 51.002(a) (West 2014). They objected to the following statement in the substitute trustee's deed:
WHEREAS, I, the said Substitute Trustee, did, between the hours of ten o'clock A.M. and four o'clock P.M. and beginning not earlier than 10:00 A.M., or not later than three hours thereafter, on the date for which said sale was advertised, offered the said land and premises for sale at public venue at the Courthouse of DALLAS County, in the area designated by the Commissioners' Court of such county, pursuant to § 51.002 of the Texas Property Code as amended, or if no area was designated by the Commissioner's Court, the sale was conducted in the area immediately (next) adjacent to the location where the Notice of Sale was posted[.]They argue the statement indicates a sale occurred at an unspecified time at one of two possible locations, which is not "clear, positive, direct, credible, free from contradiction, or uncontroverted." They further argue the substitute trustee's deed is not based on personal knowledge. However, any alleged defects in the foreclosure process may not be considered in a forcible detainer action. See Williams v. Bank of N.Y. Mellon, 315 S.W.3d 925, 927 (Tex. App.—Dallas 2010, no pet.) (alleged insufficiency of substitute trustee's deed because of non-compliance with property code section 51.002 not relevant to forcible detainer action). The Hendersons arguments are nothing more than such a challenge. Moreover, a substitute trustee's deed is not an affidavit, and the Hendersons have failed to provide any authority that it is subject to the personal knowledge requirements of rule 166(f). See TEX. R. CIV. P. 166(f) (requirements of affidavits in support of summary judgment). Accordingly, the trial court did not err in overruling their objection to the evidence.
Based on the documents attached to its summary judgment motion, Wells Fargo proved its right to possession of the property as a matter of law. The substitute trustee's deed showed it purchased the property for $150,067.29 in a public auction following the Hendersons' default on the deed of trust. The deed of trust indicated the Hendersons became tenants-at-sufferance when they failed to vacate the property. The notice to vacate informed them of their tenants-at-sufferance status and demanded they vacate the property. This evidence conclusively established Wells Fargo right to immediate possession of the property. Shutter v. Wells Fargo Bank, N.A., 318 S.W.3d 467, 471 (Tex. App.—Dallas July 2010, pet. dism'd w.o.j.). Accordingly, the trial court did not err by granting summary judgment for Wells Fargo. We overrule the Hendersons' third and fourth issues.
Conclusion
The judgment of the trial court is affirmed.
/David L. Bridges/
DAVID L. BRIDGES
JUSTICE 160471F.P05
JUDGMENT
On Appeal from the County Court at Law No. 2, Dallas County, Texas
Trial Court Cause No. CC-15-04766-B.
Opinion delivered by Justice Bridges. Justices Myers and Stoddart participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellee WELLS FARGO BANK, N.A. recover its costs of this appeal from appellants DAVID HENDERSON AND KATHY HENDERSON. Judgment entered March 3, 2017.