Opinion
No. 01-02-00867-CV.
Opinion issued October 9, 2003.
Original Proceeding on Petition for Writ of Mandamus.
For Relator: Eric Lipper, Hirsch Westheirmer, P.C., 700 Louisiana, 25th Floor, Houston, TX 77002.
For Real Party in Interest: Braxton L. Pate, P.O. Box 11, Tulepo, OK 74572.
Kelly Harvey, Rubal, Hamm Harvey, 4301 Yoakum Blvd., Houston, TX 77006.
Conrad Day, 18 West Main, Bellville, TX 77418.
Panel consists of Justices TAFT, JENNINGS, and HANKS.
MEMORANDUM OPINION ON REHEARING
On June 12, 2003, we denied the petition for writ of mandamus of relator, Bank of America ("the Bank"), which had challenged three orders of Judge Oakley, and we withdrew a previously granted stay of certain of those orders. The Bank has moved for rehearing, but now challenges only the trial court's order of July 29, 2002, which required the Bank to take possession of and to sell a vehicle. We grant the Bank's rehearing motion and conditionally grant mandamus relief with respect to this order. We deny mandamus relief for all other challenged orders.
The Honorable Gladys M. Oakley, judge of the County Court at Law of Austin County, Texas. The underlying lawsuit is Cliff Jones, Inc. v. Braxton L. Pate Bank of America, trial court cause no. 00CV-3393.
Background
The facts in this background section come from the verified mandamus record submitted by the Bank. CJI filed a response, along with an affidavit and amended docket-control order to supplement the record. However, (1) CJI's response is unverified, (2) the attached "affidavit" does not contain a signed jurat and, thus, is not a true affidavit, and (3) the amended docket-control order is neither verified nor signed by the trial court (although both parties signed it to approve its form only). CJI's materials are thus defective. See Tex.R.App.P. 52.3, 52.4 (requiring that mandamus response comply with certain requirement applicable to relator's mandamus petition, including that all factual statements be verified by affidavit and that certain exhibits be certified or sworn); Tex. Gov't Code Ann. § 312.011(1) (Vernon 1998) ("`Affidavit' means a statement in writing of a fact or facts signed by the party making it, sworn to before an officer authorized to administer oaths, and officially certified to by the officer under his seal of office."). For these reasons, we do not consider the attachments to CJI's response.
In October 1999, the real party in interest, Cliff Jones, Inc. ("CJI"), sold a travel trailer to Braxton and Sheryl Pate, who are husband and wife. As part of that sale, the Pates traded in a 1995 recreational vehicle ("RV"; this particular vehicle is designated "the Pate RV" herein) for a credit of $5,596.04, the difference between the Pate RV's trade-in value of $21,350 and the amount of the Pate RV's financing lien, held by the Bank, of $15,753.96. Braxton Pate allegedly represented that the Pate RV was in "perfect" condition, but CJI claimed that, unbeknownst to CJI at the time, the vehicle was damaged. CJI further alleged that Braxton Pate represented that the Pate RV was registered solely in the name of Sheryl Pate and that he would provide merchantable title.
CJI alleged that, before completing the sale to the Pates, CJI contacted a Bank employee, who confirmed the pay-off amount and also that the Pate RV's title was solely in the name of Sheryl Pate. The Bank disputes whether its employee verified or even had access to the title information. In any event, the Pate RV's title was actually in the names of Sheryl Pate her late father, William Radford Burnette, but CJI alleged that it did not learn this information before completing the sale.
To complete the transaction, Sheryl Pate filled out a form, in her name alone, that gave CJI power of attorney to transfer the Pate RV's ownership. CJI then sent the Bank a cashier's check to pay off the Pate RV's note. After having negotiated the check, the Bank sent the title, showing the Bank's lien released, to the Pates, instead of to CJI — the Bank claims accidentally, CJI claims wrongfully. After having tried to recover the title from the Pates without success, the Bank obtained a replacement title, which the Bank sent to CJI in December 1999. CJI alleged that it first learned that the Pate RV's title listed two owners when CJI received the replacement title. CJI then sued Braxton Pate (but not Sheryl Pate) and the Bank, alleging fraud and conversion and seeking actual and exemplary damages from both.
In April 2000, in a separate transaction from that involving the Pates, CJI sold a vehicle to Mr. and Mrs. Woytek. As part of the sale, the Woyteks traded in an RV, on which the Bank held a $10,355.99 lien. CJI sent the Bank a cashier's check, which the Bank negotiated, to pay off the Woyteks' lien. The same month, CJI obtained clear title to the Woyteks' traded-in RV. CJI alleged that, in May 2000, Bank employee Tamika Williams nevertheless contacted the Woyteks, falsely claiming that CJI had not paid off the loan and demanding payment. Although the matter was eventually resolved, CJI amended its petition in the Pate lawsuit to allege defamation against the Bank based on Williams's statements to the Woyteks. CJI claimed that Williams's statement had damaged future business with the Woyteks, and CJI sought actual and exemplary damages against the Bank.
The Bank sought mandamus relief in this Court from three ancillary orders in the Pate lawsuit: (1) an order, dated April 25, 2002, denying the Bank's second motion to compel discovery and for sanctions; (2) an order, dated July 29, 2002, compelling the depositions of two Bank employees, Eric Telljohan and Christopher Bates; and (3) an order, dated July 29, 2002, requiring the Bank to take possession of and to sell the Pate RV and to deposit the sale's proceeds into the court's registry. On October 14, 2002, we temporarily stayed the portion of the order that compelled the deposition of Eric Telljohan and the order that required the Bank to take possession of and to sell the Pate RV. See Tex.R.App.P. 52.10. On June 12, 2003, we denied the Bank's mandamus petition and lifted our previous stay. See In re Bank of Am., No. 01-02-00867-CV (Tex.App.-Houston [1st Dist.] June 12, 2003, orig. proceeding) (mem. op.). The Bank has moved for rehearing with respect to the order to sell the Pate RV. CJI has responded.
Standard of Review and Burden of Proof
Mandamus relief is appropriate only when the record shows that the trial court clearly abused its discretion and that no adequate remedy by appeal exists. In re Daisy Mfg. Co., 17 S.W.3d 654, 658 (Tex. 2000). A trial court clearly abuses its discretion if the court's decision is so arbitrary and unreasonable as to be a clear and prejudicial error of law or if the court clearly fails to analyze or to apply the law correctly. Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992). An appellate remedy is not inadequate merely because it involves more expense or delay than if writ issued. Id. at 842. It is the relator's burden to show its entitlement to mandamus relief. See Canadian Helicopters v. Wittig, 876 S.W.2d 304, 305 (Tex. 1994).
The Order for the Bank to Take Possession of and to Sell the Pate RV
In issue seven and on rehearing, the Bank contends that the trial court abused its discretion, for various reasons, by ordering the Bank to sell the Pate RV. In its principal argument, the Bank claims that, because the Bank had no interest in the Pate RV, because the RV's owners were not parties to the Pate lawsuit, and because the trial court had no jurisdiction over the Pate RV itself, the trial court had no jurisdiction to order the Pate RV sold, thus rendering the order void. CJI responds mainly that the Bank waived its mandamus challenges under Rule of Appellate Procedure 33.1 for not having raised them below. See Tex.R.App.P. 33.1(a). On rehearing, the Bank replies that rule 33.1 does not apply to original proceedings.
The Bank did not raise any of its arguments under issue seven or on rehearing in the trial court. In fact, the Bank (1) represented repeatedly to the trial court that the Bank wanted the Pate RV sold; (2) suggested ways that the parties or others might obtain clear title before any sale; and (3) clarified that the Bank's main concern about its being ordered to sell the Pate RV was that CJI might claim that the Bank did not get top dollar. The trial court resolved this final concern by accepting CJI's agreement that it would not make any claim against the Bank for inadequate sales price.
Rule 33.1 does not expressly apply to original proceedings. See Tex.R.App.P. 33.1(a) ("As a prerequisite for presenting a complaint for appellate review, . . . .") (emphasis added). That does not mean, however, that the concept of waiver has no application in an original proceeding or that a relator has no duty to raise non-jurisdictional arguments in the trial court. "Mandamus is an extraordinary remedy, not issued as a matter of right, but at the discretion of the court. Although mandamus is not an equitable remedy, its issuance is largely controlled by equitable principles." Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex. 1993) (citations omitted). Equity is generally not served by issuing an extraordinary writ against a trial court on a ground that was never presented to the court and that the court thus had no opportunity to address. Moreover, the standard of review on mandamus is whether the trial court clearly abused its discretion. It would be hard to conclude, without circumstances that were highly unusual or that made a trial court's ruling void, that a trial court could abuse its discretion in making a ruling for a reason that was never presented to the court.
We note, however, that several courts of appeals have applied rule 33.1 or its predecessor in original proceedings, despite the fact that the rule appears to concern only appeals. See In re Senior Living Props., L.L.C., 63 S.W.3d 594, 598 (Tex.App.-Tyler 2002, orig. proceeding); In re United Supermarkets, Inc., 36 S.W.3d 619, 622 (Tex.App.-Amarillo 2000, orig. proceeding); Tjernagel v. Roberts, 928 S.W.2d 297, 303 (Tex.App. Amarillo 1996, orig. proceeding); Dallas Fire Ins. Co. v. Davis, 893 S.W.2d 288, 293 (Tex.App.-Fort Worth 1995, orig. proceeding); Susman Godfrey, L.L.P. v. Marshall, 832 S.W.2d 105, 109 (Tex.App.-Dallas 1992, orig. proceeding). Whether rule 33.1 applies directly or only by analogy is not important; what is important, as discussed below, is that a party seeking the extraordinary writ generally must have apprised the trial court of the arguments on which the party later bases its mandamus petition.
But when an order is void, the relator need not have advised the trial court of jurisdictional challenges to that order to be entitled to mandamus relief in an appellate court. This is true because lack of jurisdiction is fundamental error and may be raised for the first time in an appellate court. See Mapco, Inc. v. Carter, 817 S.W.2d 686, 687 (Tex. 1991). Additionally, subject-matter jurisdiction cannot be conferred by consent, waiver, or estoppel. See Fed'l Underwriters Exch. v. Pugh, 174 S.W.2d 598, 600 (Tex. 1943); Tourneau Houston, Inc. v. Harris County Appraisal Dist., 24 S.W.3d 907, 910 (Tex.App.-Houston [1st Dist.] 2000, no pet.). The Bank's main challenge is that the order of sale is void, not just voidable. We thus consider that challenge.
"Absent one of those rare circumstances that makes the judgment `void,' the mere fact that an action by a court . . . is contrary to statute, constitutional provision or rule of civil or appellate procedure makes it `voidable' or erroneous. A judgment is void only when it is apparent that the court rendering the judgment had no jurisdiction of the parties, no jurisdiction of the subject matter, no jurisdiction to enter the judgment, or no capacity to act as a court." Mapco, Inc. v. Forrest, 795 S.W.2d 700, 703 (Tex. 1990).
Here, the trial court had no personal jurisdiction over Sheryl Pate or William Radford Burnette or his heirs, the title holders of the Pate RV, because they were not named as parties to the suit. See Nixon v. Cowan, 135 S.W.2d 96, 98-99 (Tex. 1940) (holding that entity, which was named as "nominal defendant" only, against which no relief was sought, on which citation was not served, and which had not appeared in suit, was "not brought within the court's active jurisdiction"); see also Mohamed v. AutoNation USA Corp., 89 S.W.3d 830, 837 (Tex.App.-Houston [1st Dist.] 2003, no pet.) (combined appeal orig. proceeding) ("Generally speaking, a trial court has no personal jurisdiction over defendants that have not yet been served, appeared, or otherwise waived service, and they are thus not yet parties to the suit."); Fikes v. Ports, 373 S.W.2d 806, 808 (Tex.Civ.App.-Fort Worth 1963, writ ref'd n.r.e.). The trial court's order thus could not bind the Pate RV's title holders or divest them of their property rights. See Edinburg Irrigation Co. v. Paschen, 235 S.W. 1088, 1091 (Tex. Comm'n App. 1922, judgm't adopted) (holding, "But where the proceeding is not strictly in rem, . . . the court cannot render a judgment which shall be valid against the rights of third persons, unless it is shown that such third persons have voluntarily appeared and become parties to the suit, or have had legal notice of the pendency of the suit and an opportunity to be heard therein."); Lee v. Massey, 135 S.W.2d 529, 531 (Tex.Civ.App.-Dallas 1939, no writ). Furthermore, the order to sell the Pate RV recites only that CJI and the Bank appeared and that Braxton Pate defaulted by not appearing; the order does not mention Sheryl Pate or William Radford Burnette or his heirs or state that they received any notice.
CJI argues that one of the owners, Sheryl Pate, was technically before the trial court because (1) CJI was before the trial court and (2) Sheryl Pate had executed a power of attorney in CJI's favor to "transfer ownership and to disclose mileage" by "execut[ing] all documents necessary to transfer [Sheryl Pate's] interest in the [Pate RV] and [by] disclos[ing] the mileage on the title for the [Pate RV]. . . ." The fact that CJI held the power of attorney to obtain title in its name is not the same as its having done so, but even if the power of attorney resulted in Sheryl Pate's ownership interests being adequately represented and protected by CJI, that fact does not alter the absence of the other title owner, William Radford Burnette or his heirs.
When a trial court has no in rem jurisdiction over property owned by a person who is not before the court, the court cannot dispose of the property. See Paschen, 235 S.W. at 1091. Here, the trial court had no in rem jurisdiction over the Pate RV because the Pate lawsuit was in personam, not in rem or even quasi in rem. Accordingly, the trial court had no power to order any party — especially a party that had no interest in the Pate RV whatsoever — to dispose of the RV because the court had no in rem jurisdiction over the RV itself and no personal jurisdiction over the RV's owners. Cf. Paschen, 235 S.W. at 1092 ("Jurisdiction in a particular matter . . . requires that the parties whose rights are to be affected be brought before the court in the manner prescribed by law, and that their interest be put in issue in the particular action before the court."); cf. Graham v. Graham, 733 S.W.2d 374, 377 (Tex.App.-Amarillo 1987, writ ref'd n.r.e.) ("`Jurisdiction of a court must be legally invoked. . . .' In order to invoke the court's jurisdiction . . . persons or property over which the court has potential jurisdiction must be brought before the court by service of process. . . . Until the court's potential jurisdiction is activated, the court is not authorized to exercise its jurisdictional power.") (citations omitted). The order to sell the Pate RV was void for this reason. See Forrest, 795 S.W.2d at 703; Fikes, 373 S.W.2d at 808 (holding that order subjecting property to receivership was "complete nullit[y]" because defendant-property owners had not been served with citation); Lee, 135 S.W.2d at 531 (holding that judgment adjudicating custody of children was "nullity" because mother had not been made party to judgment). Because the order was void, it is of no importance that the Bank did not complain of the order below or that it agreed that the Pate RV should be ordered sold. See Carter, 817 S.W.2d at 687; Tourneau Houston, Inc., 24 S.W.3d at 910.
An in rem proceeding has been described as
one which "is taken directly against property, and has for its object the disposition of property, without reference to the title of individual claimants." The object is to determine the status or condition of the property (res), and the proceeding is not concerned explicitly with the determination of personal rights or liabilities. . . . The proceeding is instituted, not against the person, but against or on the thing or subject matter whose status or condition is to be determined.
See Roy McDonald Elaine Carlson, Texas Civil Practice §§ 4:7, 413 (1992) (citations omitted). A quasi in rem proceeding has been described as
an action "between parties, where the direct object is to reach and dispose of property owned by them, or of some interest therein. It differs from a proceeding in rem in that here the suit is between definite parties . . . who alone are bound by the judgment. It differs from an action in personam in that the defendant in a quasi in rem proceeding may validly be served with constructive notice only, and in such event the judgment is binding on and to the extent of the defendant's interest in the res, which must be within the court's control so that the judgment may act directly on it.
Id. § 4:8, 414-15. Here, CJI sued the Bank and Braxton Pate for fraud and conversion and sued the Bank for defamation, and CJI prayed for actual and exemplary damages. CJI did not seek to reach or to dispose of the Pate RV or any interest in it. Those allegations, and the service rendered on the defendants, made this lawsuit in personam, which has been described as "a proceeding to enforce personal rights and obligations brought against the person . . ., although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court." Id. § 4:6, 411.
CJI argues that mandamus relief is inappropriate because CJI explained without objection at the hearing how the Bank could obtain clear title or reassert its lien before sale and, alternatively, how the Bank could sell the Pate RV at auction despite unclear title. The order to sell the Pate RV provided that the Bank "sell the [Pate RV] by any means available to it, in the manner [that] it deems fit." CJI argues that the order's broad language as to the method of sale allows the Bank, in one of the ways that CJI explained at the hearing, to obtain clear title before any sale, allegedly removing any problem with the order to sell. CJI's argument overlooks that the trial court had no power to order any sale, however accomplished, without first having personal jurisdiction over the RV's owners or in rem jurisdiction over the RV itself.
Mandamus will issue to vacate "an interlocutory or temporary order that the court had no jurisdiction to make," as well as "to prevent a court from exercising jurisdiction it does not have, even if there is an adequate remedy by appeal." In re Cornyn, 27 S.W.3d 327, 332 (Tex.App.-Houston [1st Dist.] 2000, orig. proceeding). Accordingly, we grant rehearing, conditionally grant mandamus relief, and order the trial court to vacate its July 29, 2002 order for the Bank to take possession of and to sell the Pate RV. Writ will issue only if the trial court does not vacate that order. We deny mandamus relief for any other challenged order.