Opinion
No. 08-19-00007-CV
08-21-2020
CRUZ VENZOR AND JUANA MUNOZ, Appellants, v. AMG BT Note One LLC, Appellee.
Appeal from the County Court at Law No. 1 of Tarrant County, Texas (TC# 2018-004676-1) MEMORANDUM OPINION
This is an appeal in a forcible detainer action that resulted in a judgment awarding possession to the purchaser of residential property at a foreclosure sale. The Appellants challenge the purchaser's standing, the trial courts' jurisdiction over the dispute, and the adequacy of a pre-suit demand for possession. We affirm.
This case was transferred from the Second Court of Appeals pursuant to the docket equalization efforts of the Supreme Court of Texas. See TEX.GOV'T CODE ANN. § 73.001. We follow the precedents of the Second Court to the extent they might conflict with the precedents of this court. TEX.R.APP.P. 41.3.
Background
Appellants Cruz Venzor and Juana Munoz borrowed money from Success Mortgage Corporation to buy a residential property. To secure the loan, Venzor and Munoz signed a deed of trust conveying the property to a trustee. The deed of trust provided that if the lender invokes its power of sale as a remedy for the borrowers' breach, the recitals in the trustee's deed shall be "prima facie evidence of the truth of the statements made therein," the borrowers shall immediately surrender possession of the property to the purchaser, and if possession is not surrendered, the borrowers shall be tenants at sufferance and "may be removed by writ of possession or other court proceeding."
Years later, Appellee AMG BT Note One, LLC alleged a loan default by Venzor and Munoz. AMG claimed to be the lender's successor under the deed of trust, and it appointed a substitute trustee to serve all required notices and to conduct a nonjudicial foreclosure sale. The substitute trustee sold the property to AMG. The substitute trustee's deed recited that "[d]efault has occurred in the payment of the Note and in the performance of the obligations under the Deed of Trust that secures the Note." The deed further recited that "Lender and Substitute Trustee have satisfied all requirements of the Deed of Trust and applicable law for enforcement of the power of sale contained in the Deed of Trust and for the sale of the Property, and Substitute Trustee sold the Property ('Sale') to Grantee . . . ." The substitute trustee's deed was filed with the Tarrant County Clerk.
AMG, acting through its analyst, prepared a "Notice to Vacate & Notice of Eviction" and mailed it to Venzor and Munoz by certified mail. The notice was addressed to "Cruz Venzor, Juana Munoz and all occupants," identified the property's address, and was electronically signed by "Bridge Tower Management." The document advised that a Bridge Tower agent could be reached at the telephone number provided.
When Venzor and Munoz refused to vacate the property, AMG filed a forcible detainer action against them in Tarrant County justice court. A judgment of eviction was issued, and Venzor and Munoz appealed to the county court at law.
In its verified petition for forcible detainer in the county court at law, AMG alleged it was the "record title owner" of the property, by virtue of the nonjudicial foreclosure sale conducted by the substitute trustee and the filing of the substitute trustee's deed with the Tarrant County Clerk. AMG further alleged that by wrongfully holding over possession of the property, under the terms of the deed of trust Venzor and Munoz had become tenants at sufferance. AMG also alleged that it gave Venzor and Munoz written notice to vacate pursuant to section 24.005 of the Property Code.
After a bench trial, the court entered judgment awarding possession of the premises to AMG. Venzor and Munoz filed a request for findings of fact and conclusions of law and a motion for new trial. Consistent with their argument at trial, the motion for new trial alleged a defect on the face of the public record which demonstrated that the substitute trustee's deed "was improperly issued." The motion provided additional detail about the alleged record defects, asserting that the deed of trust was first assigned by Success Mortgage to Ennis FTW 75, LLC, and a second assignment was made by Ennis FTW 75 to AMG. A third assignment in the Tarrant County records purported to assign the deed of trust from LegacyTexas Bank to AMG. Yet the substitute trustee's deed identified AMG as being the lender through an assignment of deed of trust from LegacyTexas Bank. The motion for new trial noted the absence of any document assigning the deed of trust to LegacyTexas Bank. But no supporting evidence was attached to the motion for new trial.
No findings of fact or conclusions of law were issued. The motion for new trial was denied by operation of law, and this appeal ensued.
Analysis
Venzor and Munoz challenge their eviction, basing their appeal on AMG's alleged lack of standing to file suit, the trial courts' alleged lack of jurisdiction over the dispute, and the alleged inadequacy of a pre-suit notice to vacate. They do not otherwise challenge the sufficiency of the evidence to support the judgment. AMG responds with various procedural and substantive arguments.
AMG suggests that findings of fact and conclusions of law were necessary for Venzor and Munoz to preserve their appellate challenges. But AMG does not present any argument that findings of fact and conclusions of law were necessary to support any particular issue raised on appeal. Instead, it appears to suggest that obtaining the findings and conclusions was a prerequisite to the appeal generally. To the extent this is AMG's argument, it is mistaken. AMG is correct that Venzor and Munoz failed to preserve any objection to the trial court's failure to issue the requested findings of fact and conclusions of law. See TEX.R.CIV.P. 297. But it does not follow that all of Venzor and Munoz's appellate challenges have been waived for that reason, and the authorities relied upon by AMG do not support that suggestion. See, e.g., Ad Villarai, LLC v. Chan Il Pak, 519 S.W.3d 132, 135 (Tex. 2017) (per curiam) (if the court fails to file findings in response to a proper and timely request, the court of appeals must presume the trial court made all the findings necessary to support the judgment, but a party may rebut the presumption by demonstrating that the record evidence does not support a presumed finding). Venzor and Munoz do not complain on appeal about the trial court's failure to issue findings of fact and conclusions of law. We therefore overrule AMG's "counter point" suggesting a general failure to preserve error based upon the absence of findings of fact and conclusions of law.
"'The only issue in a forcible detainer action is the right to actual possession of the premises.'" Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 919 (Tex. 2013) (quoting Marshall v. Hous. Auth. of the City of San Antonio, 198 S.W.3d 782, 785 (Tex. 2006)); see also TEX.R.CIV.P. 510.3(e); Jimenez v. McGeary, 542 S.W.3d 810, 812 (Tex. App.—Fort Worth 2018, pet. denied). "Such an action 'is intended to be a speedy, simple, and inexpensive means to obtain immediate possession of property.'" Coinmach, 417 S.W.3d at 919 (quoting Marshall, 198 S.W.3d at 787). "The judgment in a forcible detainer action is a final determination only 'of the right to immediate possession;' it is not 'a final determination of whether the eviction is wrongful' or whether the tenant's continued possession was a trespass." Id. (quoting Marshall, 198 S.W.3d at 787).
I. AMG's standing to prosecute forcible detainer claim
Venzor and Munoz challenge AMG's standing to pursue a forcible detainer, based on the argument that the record does not affirmatively demonstrate AMG's superior right to possess the property. Venzor and Munoz primarily rely on A Plus Investments, Inc. v. Rushton, No. 02-03-00174-CV, 2004 WL 868866 (Tex. App.—Fort Worth Apr. 22, 2004, no pet.)(mem. op.), to argue that the lack of evidence in the record of assignments linking AMG back to Success Mortgage is a fatal "failure to connect the dots" that implicates a title dispute, undermining both AMG's claim of superior right to possession and the validity of its pre-suit notice to vacate.
The Second Court of Appeals previously has distinguished A Plus Investments because the home equity security instrument in that case involved the application of article XVI, section 50(a)(6)(D) of the Texas Constitution, which requires a court order for foreclosure. See A Plus Invs., 2004 WL 868866, at *2. Just as was the case in Presley v. McGrath, No. 02-04-403-CV, 2005 WL 1475495 (Tex. App.—Fort Worth June 23, 2005, pet. dism'd w.o.j.)(mem. op.), A Plus Investments is inapplicable here because Venzor and Munoz have not pointed to any similarly controlling provisions affecting the court's jurisdiction over this forcible detainer action, which arises from a nonjudicial foreclosure.
"A court has no jurisdiction over a claim made by a plaintiff without standing to assert it." DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304 (Tex. 2008). But to satisfy the constitutional standing requirement, a plaintiff only must be personally aggrieved, in the sense that its alleged injury must be "concrete and particularized, actual or imminent, not hypothetical." Id. at 304-05 [Footnotes omitted]. "A plaintiff does not lack standing simply because [it] cannot prevail on the merits of [its] claim; [it] lacks standing because [its] claim of injury is too slight for a court to afford redress." Id. at 305. Thus, whatever arguments Venzor and Munoz may have about the quality of the evidence to support AMG's claim of a superior right to possession of the property, those arguments did not disprove AMG's standing to sue based on its legal claims flowing from the substitute trustee's deed. See, e.g., McGuire v. Fannie Mae, No. 02-11-00312-CV, 2012 WL 955377, at *2 (Tex. App.—Fort Worth Mar. 22, 2012, pet. dism'd w.o.j.)(mem. op.) (plaintiff's status as grantee under substitute trustee's deed sufficient to confer standing to assert forcible detainer action regarding property).
Venzor and Munoz suggest that the substitute trustee's deed should be disregarded because it does not include an affidavit to prove service by certified mail. See TEX.PROP.CODE ANN. § 51.002(e) ("Service of a notice under this section by certified mail is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor at the debtor's last known address. The affidavit of a person knowledgeable of the facts to the effect that service was completed is prima facie evidence of service."). To prevail in a forcible detainer action, the plaintiff is not required to prove title, but is only required to show sufficient evidence of ownership to demonstrate a superior right to immediate possession. See, e.g., Morris v. Am. Home Mortg. Servicing, Inc., 360 S.W.3d 32, 34 (Tex. App.—Houston [1st Dist.] 2011, no pet.); see also Jimenez, 542 S.W.3d at 815. The existence of a landlord-tenant relationship, as suggested by the combination of the deed of title and the substitute trustee's deed, provides a basis for the court to determine the right to immediate possession without resolving the question of title. See Morris, 360 S.W.3d at 34; see also Jimenez, 542 S.W.3d at 814-15. AMG's proof in this regard did not rely on any presumptions arising from Property Code section 51.002.
We overrule the challenge to AMG's standing to pursue a forcible detainer action.
II. Effect of title dispute on trial court's jurisdiction
Venzor and Munoz rely on their allegation of record defects to argue that their dispute with AMG over title deprived the trial court of jurisdiction over a forcible detainer claim. "Justice courts may adjudicate possession when issues related to the title of real property are tangentially or collaterally related to possession." Gibson v. Dynegy Midstream Services, L.P., 138 S.W.3d 518, 522 (Tex. App.—Fort Worth 2004, no pet.). "If, however, the question of title is so integrally linked to the issue of possession that the right to possession cannot be determined without first determining title, then the justice courts and, on appeal, the county courts, lack jurisdiction over the matter." Id.
As occurred in this case, a forcible detainer action in justice court "may be prosecuted concurrently with a title dispute in district court." Morris, 360 S.W.3d at 35; see also Mosely v. Am. Homes 4 Rent Properties Eight, LLC, No. 02-15-00200-CV, 2015 WL 9942695, at *2 (Tex. App.—Fort Worth Dec. 10, 2015, pet. dism'd)(mem. op.). "Therefore, a suit to try title filed in another court does not necessarily deprive the court in which a forcible detainer action was brought of jurisdiction." Morris, 360 S.W.3d at 35. "Because the plaintiff in a forcible detainer action is only required to demonstrate a superior right to immediate possession, the county court can determine possession without quieting title if the deed establishes a landlord-tenant relationship between the borrower and the purchaser of the property at the foreclosure sale." Id.; see also Mosely, 2015 WL 9942695, at *3.
AMG offered into evidence the original deed of trust and the substitute trustee's deed, which together establish an evidentiary basis for determining the immediate right to possess the property as between AMG, the purchaser at foreclosure, and Venzor and Munoz, the tenants at sufferance. Venzor and Munoz agreed in the deed of trust that the facts recited in the trustee's deed would be prima facie evidence of the truth of the statements made therein. Thus, the record contains evidence that AMG acquired the property and is now the record owner.
Venzor and Munoz's argument suggests that the record is not entirely conclusive with respect to title, insofar as AMG did not offer into evidence a complete chain of documents to demonstrate the transfer of lender's rights under the deed of trust from Success Mortgage Corporation to itself. However, Venzor and Munoz failed to offer any of their own evidence to rebut the presumptions arising from the prima facie evidence adduced by AMG. Cf. In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015) ("prima facie case" refers to evidence sufficient as a matter of law to establish a given fact if it is not rebutted or contradicted, and the minimum quantum of evidence necessary to support a rational inference that the allegation of fact is true).
We conclude that in the absence of evidence to substantiate a genuine fact dispute concerning AMG's claim to be the rightful owner of the property, the unrebutted evidence that was before the trial court justified exercising jurisdiction to resolve the forcible detainer claim. See Jimenez, 542 S.W.3d at 815; Mosely, 2015 WL 9942695, at *2-3.
III. Pre-suit demand for possession
As a prerequisite to filing a forcible detainer action against a tenant by sufferance, the landlord must give the tenant at least three days' written notice to vacate. See TEX.PROP.CODE ANN. § 24.005(b). Venzor and Munoz contend that the judgment was entered in error because the pre-suit demand for possession they received was inadequate. The pre-suit demand presented to the trial court was in the form of a letter from "Bridge Tower Management." AMG presented its analyst as a witness, and she testified that she prepared the pre-suit demand and sent it by certified mail.
"The demand for possession must be made in writing by a person entitled to possession of the property and must comply with the requirements for notice to vacate under Section 24.005." [Emphasis added]. TEX.PROP.CODE ANN.§ 24.002(b). If, as in this case, "the occupant is a tenant at will or by sufferance," then "the landlord must give the tenant at least three days' written notice to vacate before the landlord files a forcible detainer suit . . . ." [Emphasis added]. TEX.PROP.CODE ANN. § 24.005(b).
Venzor and Munoz argue that the Property Code requires that the pre-suit demand "be made by a person with actual capacity to make the demand." They contend that the letter from Bridge Tower Management "was issued by an entity . . . having no apparent connection whatsoever to AMG" and lacked any reference "to any trustee's sale, any putative buyer at such sale, or any other person." They argue that due-process concerns associated with evictions require that the Property Code's requirements be strictly enforced, including, as they put it, that the demand "must have been issued by or for a plaintiff with capacity . . . ." Venzor and Munoz thus argue that the notice was defective because it did not reveal on its face that it was from AMG.
The demand for possession must be made by a person entitled to possession, and AMG proved that it made the demand on Venzor and Munoz. Both the verified petition and the live testimony of AMG's agent established that AMG caused the notice to vacate to be delivered. Nothing in chapter 24 of the Property Code requires that the notice effectively be self-proving, in the sense that the document is required to establish on its face that the demand is being made by the person entitled to possession. And while there might be a fairness concern if a tenant were prejudiced by failing to act on a notice to vacate received from an unrecognized source, as Venzor and Munoz suggest the letter from "Bridge Tower Management" was, they have not substantiated or preserved any kind of due-process challenge to the series of events that culminated in their eviction. There is no evidentiary record to suggest that they were actually unaware that a person claiming legal authority had alleged a default on their loan, had initiated a foreclosure sale, and subsequently was demanding possession through the notice delivered by "Bridge Tower Management." Nor was any due-process argument raised in the trial court. See TEX.R.APP.P. 33.1(a). Accordingly, we overrule the appellate challenges to the sufficiency of the pre-suit demand for possession.
Conclusion
We affirm the judgment awarding possession of the property to Appellee AMG. August 21, 2020
MICHAEL MASSENGALE, Visiting Justice Before Alley, C.J., Palafox, J., and Massengale, V.J.
Massengale, V.J. (Sitting by Assignment)