Opinion
NO. 12-20-00142-CV
07-31-2020
U.S. BANK NATIONAL ASSOCIATION, IN ITS CAPACITIES AS INDENTURE TRUSTEE AND COLLATERAL TRUSTEE, APPELLANT v. H & H PIPE & STEEL AND MADDUX BUILDING MATERIALS, INC., JOE LANE D/B/A HALLSVILLE WOODYARD, GOOD TIMES WOOD PRODUCTS, INC., TERRY DIFFEY D/B/A CHARTER TRUCKING, W.D. TOWNLEY AND SON LUMBER COMPANY, INC., D/B/A TOWNLEY LUMBER, WANNER ENTERPRISES, INC., D/B/A EWELL EQUIPMENT CO., DP SOLUTIONS, INC., AND PRIME ACRES MANAGEMENT, INC., APPELLEES
APPEAL FROM THE 217TH JUDICIAL DISTRICT COURT ANGELINA COUNTY , TEXAS ORDER
Appellant, U.S. Bank National Association, in its Capacities as Indenture Trustee and Collateral Trustee, filed a petition for permissive appeal with this Court. The record demonstrates that, in the trial court, (1) the Bank filed a summary judgment motion on its first amended counterclaim, cross-claim, and third party claim, (2) Appellees Maddux Building Material, Inc. and H & H Pipe & Steel (the Maddux lien claimants) jointly filed a motion for summary judgment and a cross-motion, (3) Appellees/Cross-Appellants DP Solutions, Inc., Wanner Enterprises, Inc. d/b/a Ewell Equipment Co., Terry Diffey d/b/a Charter Trucking, Good Times Wood Products, Inc., Joe Lane d/b/a Hallsville Woodyard, and W.D. Townley and Son Lumber Company, Inc. d/b/a Townley Lumber (the DP Solutions lien claimants) jointly filed cross motions for summary, and (4) Appellee/Cross-Appellant Prime Acres Management, Inc. joined in the cross motions filed by the DP Solutions lien claimants. In an order, the trial court denied all motions and granted the Bank permission to appeal three controlling issues of law, which the trial court outlined as follows:
Issue No. 1: Aspen Power took title to the subject property on the exact date and time as the deed of trust granted to U.S. Bank, as Trustee. Under these circumstances, the Trustee asserts that no judgment lien or mechanic's lien claimant, as a matter of law, could have priority over the first-filed deed of trust assigned to the Trustee under the bond documents, even if certain work commenced prior to the time the borrower acquired the property. The Court denied the Trustee's motion for summary judgment on this issue.The court explained that the motions and cross motions "raise pure questions of law, and there are no issues of material fact with respect to these determinations." Accordingly, the trial court identified three "controlling questions of law" raised by the motions, whether (1) as a matter of law, no lien claimant could have priority over the deed of trust granted to the Bank, even assuming prior work was performed by third parties, when the deed of trust is filed and recorded at the same time and date that the borrower acquires the real property subject to the deed of trust; (2) the lien claimants' allegations of unclean hands and other equitable defenses, without additional supporting evidence, constitutes a genuine issue of material fact sufficient to prevent summary judgment in favor of the Bank; and (3) the loan documents at issue are ambiguous, and if so, whether the trial court must interpret their meaning on summary judgment when the opposing parties do not offer any extrinsic evidence with respect to an alleged ambiguity. The Bank now seeks a permissive appeal as to these three issues.
Issue No. 2: Angelina and Neches River Authority Industrial Development Corporation issued $53,330,000 in bond and loaned the proceeds from issuance of the bonds to Aspen Power to construct a power plant in Lufkin, Texas. The Authority assigned its rights, liens and interests under the loan documents to U.S. Bank, as Trustee, to secure repayment of the bonds issued to bondholders. Various lien claimants [parties objecting to the Bank's summary judgment motion] have made allegations of unclean hands and other defenses relating to the creation of and enforcement of the rights, liens, and interests granted to the Trustee, including rights to a certain ITC grant relating to construction of the power plant. The Trustee asserts that these allegations, unsupported by any summary judgment evidence, fail to raise genuine issues of material fact for trial and that it is entitled to judgment as a law.
Notwithstanding the allegations of unclean hands by Lien Claimants, by order dated September 29, 2016, the Court found that the Trustee was entitled to judgment in an amount up to $88,428,563 through November 1, 2016. By order dated September 29, 2016, the Court further directed that $3,432,224.28 of the sale proceeds be paid to the Trustee to reimburse the Trustee for payment of tax liens filed against the mortgaged properties. Otherwise, the Court has denied the Trustee's motions for summary judgment on this issue.
Issue No. 3: The loan documents assigned to the Trustee allow for "Permitted Liens." Certain of the Lien Claimants assert that all mechanics' liens and judgment liens against the mortgaged property are "Permitted Liens" under the loan documents and, accordingly, have priority over the mortgage lien granted to the Trustee. The Trustee asserts that the loan documents are unambiguous, and that the Lien Claimants' interpretation of the loan documents is illogical, unreasonable, not supported by any extrinsic evidence, and renders other provisions of the loan documents meaningless. The Trustee further asserts that, absent extrinsic evidence, the Court must interpret the loan documents to give meaning to all terms of the provisions and agreements. The Court denied the parties' motions for summary judgment on this issue.
The DP Solutions lien claimants filed a response and a cross-petition for permissive appeal, which presents additional issues for our consideration: (1) "Is the Angelina Fuels' deed of trust legally defective for lack [of] consideration, therefore the Trustee is not entitled to any lien interest against the sale proceeds of Angelina Fuels;" and (2) "Is the property description in [] Angelina Fuels' deed of trust legally insufficient to convey an interest in the Angelina Fuels real property because the deed of trust failed to describe the 'subject property' with sufficient particularity to identify the property." Lien claimant Prime Acres filed a response adopting the cross-petition. In response, the Bank asserts that the lien claimants are not entitled to a permissive appeal on the two issues they raised because they did not request and receive permission from the trial court to pursue those two issues on appeal. The Maddux lien claimants have not filed a response or cross-petition.
"On a party's motion or on its own initiative, a trial court in a civil action may, by written order, permit an appeal from an order that is not otherwise appealable if: (1) the order to be appealed involves a controlling question of law as to which there is a substantial ground for difference of opinion; and (2) an immediate appeal from the order may materially advance the ultimate termination of the litigation." TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(d) (West Supp. 2019). Rule 168 of the Texas Rules of Civil Procedure states that:
On a party's motion or on its own initiative, a trial court may permit an appeal from an interlocutory order that is not otherwise appealable, as provided by statute. Permission must be stated in the order to be appealed. An order previously issued may be amended to include such permission. The permission must identify the controlling question of law as to which there is a substantial ground for difference of opinion, and must state why an immediate appeal may materially advance the ultimate termination of the litigation.If the order is amended by the trial court, either on its own or in response to a party's motion, to include the court's permission to appeal, the time to petition the court of appeals runs from the date the amended order is signed. TEX. R. APP. P. 28.3(c).
This Court is of the opinion that further briefing, including citations to authorities, is necessary for disposition of the petition and cross-petitions for permissive appeal.
Accordingly,
It is ORDERED that the Bank, the DP Solutions lien claimants, and Prime Acres Management shall submit additional briefing to the Court as to the following: (1) given the two issues identified in the cross-petitions (and set forth above), whether addressing the three issues in which the Bank seeks an interlocutory appeal will materially advance the ultimate termination of the litigation; (2) whether the two issues identified in the cross-petitions involve a controlling question of law as to which there is a substantial ground for difference of opinion and an immediate appeal from may materially advance the ultimate termination of the litigation; and (3) whether this appeal should be abated to allow the parties to seek an amended order to include permission to appeal the two issues identified in the cross-petitions.
The Maddux lien claimants may file briefing if they so choose.
It is FURTHER ORDERED that the additional briefing shall be submitted on or before August 14, 2020.
Order entered July 31 , 2020 .
By:/s/_________
KATRINA MCCLENNY, CLERK