Opinion
14-20-00822-CV
04-19-2022
LETNER SURVIVORS TRUST, LLC, Appellant v. BERRY GROUP, LP; SAIHAT CORPORATION; SAHARA GROUP, LP;AND OASIS GP, LLC, Appellees
On Appeal from the 333rd District Court Harris County, Texas Trial Court Cause No. 2015-70328
Panel consists of Chief Justice Christopher and Justices Bourliot and Spain.
MEMORANDUM OPINION
CHARLES A. SPAIN, JUSTICE
This appeal involves a dispute over title to real property located in Harris County. In issue 1, appellant Letner Survivors Trust (the Trust) argues the district court erred in awarding title and possession of the real property at issue to appellee Sahara Group, LP, the current owner of record, because the Trust has superior title. In issue 2, the Trust argues that the district court erred because Sahara Group obtained its interest through fraud in concert with the other appellees Berry Group, LP; Oasis GP, LLC; and Saihat Corporation. Concluding the tax sale of the property in 2018 vested Sahara Group with legal and equitable title to the property, we affirm the judgment of the district court.
I. Background
The Trust intended to purchase the real property located at 14902 Crondell Circle in Channelview, Texas (the Property). In 2013, the Trust, working through an investment agent, wired money to Texas Capital Holdings Fund I, LP. In turn, Texas Capital Holdings engaged MNSCI, LLC to acquire the Property at auction. Though MNSCI did acquire the Property in May 2013, it did not timely convey the Property to the Trust due, in part, to an injunction stemming from unrelated litigation restraining MNSCI from transferring property. After the injunction was lifted, a judgment against MNSCI in a another unrelated matter was abstracted and filed of record against the Property. As a result of that judgment, the Property was sold at a constable's sale in June 2015 to Berry Group, even though MNSCI conveyed the Property to the Trust just a few months before in March 2015. In November 2015, the Trust filed suit against Berry Group in the district court seeking a declaratory judgment that the Trust is the legal and equitable owner of the Property.
MNSCI deeded the property to "Letner Survivors Trust, LLC," even though there is no such legal entity in existence. The parties dispute whether the error in this deed was a misnomer that did not affect the validity of the deed or an error rendering the conveyance void. We need not address the issue, as it is mooted by the 2018 tax sale.
During the pendency of the litigation between the Trust and Berry Group, no property taxes were paid on the Property. In 2017, Harris County and four other taxing authorities sued to foreclose liens securing payment of their delinquent taxes on the Property in a separate proceeding in the district court. See Property Tax Code, Tex. Tax Code Ann. §§ 33.41(a), .42(a). In February 2018, the district court rendered judgment in rem foreclosing the tax liens on the Property and ordering the Property sold in execution of the judgment. In June 2018, the constable sold the Property in satisfaction of the amount of the judgment. See Property Tax Code, Tex. Tax Code Ann. § 33.53. The purchaser at the constable's sale and the current legal owner of the Property is Sahara Group, LP. A little more than a year later the Trust added Sahara Group as a party seeking a declaratory judgment in the district court to set aside the deed from the tax sale.
At the time of the tax sale, the Trust had not filed a notice of lis pendens.
Harris Cty. v. Berry Group, LP, No. 2017-37803 (333rd Dist. Ct., Harris County, Tex. Feb. 20, 2018).
The Property Tax Code is Tax Code title 1, covering chapters 1 through 43 (sections 1.01 through 43.04). Tex. Tax. Code Ann. § 1.01.
The deed from the tax sale was filed in the county records on July 3, 2018. However, the Trust did not contest the deed from the tax sale or Sahara's ownership until July 22, 2019, more than a year later.
The district court held a trial on the merits in December 2019, with rendition of a corrected final judgment on September 14, 2020. The final judgment awarded title and possession of the Property to Sahara Group, and ordered a take-nothing judgment on all other claims and counterclaims asserted in the suit. The Trust appeals from the district court's final judgment.
II. Analysis
A. Title and possession to the Property
In issue 1, the Trust argues that the district court erred by awarding title and possession of the Property to Sahara Group because it has superior title to Sahara Group. The Trust describes myriad title issues affecting the conveyance to and ownership of the Property by Berry Group, which in turn it argues precluded a tax sale of Berry Group's interest to Sahara Group. In response, Sahara Group argues that its affirmative defense of limitations and status as a bona fide purchaser are determinative.
In its findings of fact and conclusions of law, the district court concluded that Sahara Group, as a purchaser at a tax sale, took title free and clear of all interests subject only the statutory rights of redemption. See Property Tax Code, Tex. Tax Code Ann. § 34.08. An action for title to property may not be maintained against the purchaser of the property at a tax sale unless the action is commenced "before the first anniversary of the date that the deed executed to the purchaser at the tax sale is filed of record." Property Tax Code, Tex. Tax Code Ann. §§ 33.54(a)(1), 34.08(b). Further, a person may not "commence" an action against the purchaser of the property following a tax sale unless the person deposits into the registry of the court an amount equal to that of the delinquent taxes, penalties, and interest specified in the foreclosure judgment, plus all costs of the tax sale. Property Tax Code, Tex. Tax Code Ann. § 34.08(a). The Trust did neither of these things. Therefore, its challenge to the deed from the tax sale is barred. Property Tax Code, Tex. Tax Code Ann. § 33.54(c) ("When actions are barred by this section, the purchaser at the tax sale or the purchaser's successor in interest has full title to the property, precluding all other claims."); see Property Tax Code, Tex. Tax Code Ann. § 34.08(b) ("The purchaser may conclusively presume that the tax sale was valid and shall have full title to the property free and clear of the right, title, and interest of any person that arose before the tax sale . . . ."); see also Jordan v. Bustamante, 158 S.W.3d 29, 39 (Tex. App.-Houston [14th Dist.] 2005, pet. denied) (discussing statute of limitations in section 33.54); Allen v. Jungenberg, No. 14-18-00712-CV, 2020 WL 1467368, at *2 (Tex. App.-Houston [14th Dist.] Mar. 26, 2020, pet. denied) (affirming Jordan as "binding precedent"). We conclude the district court did not err in its conclusion that Sahara Group was entitled to "judgement for title and possession to the real property . . . free and clear of any and all claims of" the Trust.
We overrule issue 1.
B. Fraud claims
In issue 2, the Trust argues that the district court erred in awarding title to Sahara Group because Sahara Group attained its ownership of the Property through fraud in concert with the other appellees. In its findings of fact and conclusions of law, the district court concluded there was no fraud or conspiracy perpetrated by Berry Group or Sahara Group. However, the district court also concluded that the Trust's claims against Sahara Group were not timely filed and barred by the statute of limitations.
The Trust challenges the deed from the tax sale based on fraud. Property Tax Code, Tex. Tax Code Ann. § 34.01(n) ("The deed vests good and perfect title in the purchaser or the purchaser 's assigns . . . subject only to the defendant's right of redemption . . . . The deed may be impeached only for fraud."). The Trust asserts that because Berry Group did not notify the Trust of the failure to pay taxes or the tax sale, even though Berry Group knew that the Trust was asserting ownership in its ongoing declaratory action, Berry Group and Sahara Group acted fraudulently in concert to have the Property sold at a tax sale to extinguish any prior legal claims.
We do not reach the fraud claims. The Property Tax Code requires that challenges to a deed from a tax sale must be asserted within one year of the recording of the deed from the tax sale. Property Tax Code, Tex. Tax Code Ann. §§ 33.54(a)(1), 34.08(b). The Trust does not offer any authority extending the limitations period beyond a year in situations in which a deed from a tax sale is impeached for fraud. We conclude the district court did not err in determining the Trust's claims of fraud against Sahara Group were not filed within the limitations period.
We overrule issue 2.
III. Conclusion
We affirm the judgment of the district court as challenged on appeal.