Foreclosure: Accrual of right to foreclose, applicable statute of limitations, and tolling

DOES DEFAULT TRIGGER THE RUNNING OF LIMITATIONS PERIOD? 

Optional Acceleration Clause 

"Under Texas law, a secured lender must foreclose on its `real property lien not later than four years after . . . the cause of action accrues.'" Rivera, 607 F. Appx. at 360 (citing Tex. Civ. Prac. & Rem. Code § 16.035(a)). "If the `deed of trust secured by real property contains an optional acceleration clause, default does not [of itself] start limitations running on the note. Rather, the action accrues only when the holder actually exercises its option to accelerate.'" Id. (quoting Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001)).

Tolling may also affect limitations, such as when bankruptcy petition is filed, or foreclosure prevention suit in state court 

 "Section 108(c) of the bankruptcy code . . . affords an extension of state-court deadlines under some circumstances. That section provides, in pertinent part: [I]f applicable nonbankruptcy law . . . fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor . . . and such period has not expired before the date of the filing of the [bankruptcy] petition, then such period does not expire until the later of—(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or (2) 30 days after notice of the termination or expiration of the stay under section 362, 922, 1201, or 1301 of this title, as the case may be, with respect to such claim." Id.(emphasis added).

Also see Wells Fargo Bank, N.A. v. Murphy, 458 S.W.3d 912, 915 n.1 (Tex. 2015), reh'g denied (June 5, 2015) (citing Tex. R. Civ. P. 36.11(a)) ("The relevant portion of Rule 736.11(a) states: `A proceeding or order under this rule is automatically stayed if a respondent files a separate, original proceeding in a court of competent jurisdiction that puts in issue any matter related to the origination, servicing, or enforcement of the loan agreement, contract, or lien.'").

HSBC BANK USA, N.A., AS TRUSTEE FOR MERRILL LYNCH MORTGAGE INVESTORS TRUST, MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2005-WMCI, Plaintiff/Counter-Defendant,
v.
KENNETH E. CRUM, Defendant/Counter-Plaintiff,

Civil Action No. 3:14-CV-3522-B.

United States District Court, N.D. Texas, Dallas Division.

February 24, 2016.

MEMORANDUM OPINION AND ORDER

JANE J. BOYLE, District Judge.

Before the Court is Plaintiff/Counter-Defendant HSBC Bank USA, N.A., as Trustee for Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-WMCI's (Plaintiff, HSBC, or the bank) Motion for Summary Judgment (Doc. 38). For the following reasons, HSBC's Motion is DENIED without prejudice pending additional briefing as explained below.

Wrongful foreclosure claim in Texas

ELEMENTS OF CAUSE OF ACTION FOR WRONGFUL FORECLOSURE 

The elements of a wrongful foreclosure claim are: (1) a defect in the foreclosure sale proceedings; (2) an inadequate selling price; and (3) a causal connection between the defect and the inadequate selling price. See Charter Nat'l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex. App.-Houston [14th Dist.] 1989, writ denied).

The elements of a wrongful-foreclosure claim are: (1) a defect in the foreclosure sale proceedings; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate selling price. Sauceda v. GMAC Mortg. Corp., 268 S.W.3d 135, 139 (Tex. App.-Corpus Christi 2008, no pet.). 

The elements of a wrongful foreclosure claim are: (1) a defect in the foreclosure-sale proceedings; (2) an inadequate selling price; and (3) a causal connection between the defect and the inadequate selling price. See Estate of Broughton v. Financial Freedom Senior Funding Corp., No. 13-14-00091-CV, 2016 WL 2955058, at *3 (Tex. App.-Corpus Christi, May 19, 2016, pet. filed) (mem. op.); Buchanan v. Compass Bank, No. 02-14-00034-CV, 2015 WL 222143, at *5 (Tex. App.-Fort Worth Jan. 15, 2015, pet. denied) (mem. op.); Charter Nat'l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex. App.-Houston [14th Dist.] 1989, writ denied).

REMEDIES 

The proper remedy for wrongful foreclosure is either: (1) damages equal to the difference between the value of the property and the indebtedness; or (2) the setting aside of the foreclosure sale. See Pinnacle Premier Prop., Inc. v. Breton, 447 S.W.3d 558, 565 (Tex. App.-Houston [14th Dist.] 2014, no pet.); Wells Fargo Bank, N.A. v. Robinson, 391 S.W.3d 590, 593-94 (Tex. App.-Dallas 2012, no pet.). A plaintiff seeking damages for wrongful foreclosure must show that (1) there was an irregularity in the foreclosure sale and (2) the irregularity caused the plaintiff damages. See University Sav. Ass'n v. Springwoods Shopping Ctr., 644 S.W.2d 705, 706 (Tex. 1982); Houston Omni USA Co. v. Southtrust Bank Corp., N.A., No. 01-07-00433-CV, 2009 WL 1161860, at *6 (Tex. App.-Houston [1st Dist.] Apr. 30, 2009, no pet.) (mem. op.).

See recent case opinions below:

A trespass to try title action is what?

WHAT DOES TRESPASS TO TRY TITLE MEAN? 

The Texas Property Code provides in part, "A trespass to try title action is the method for determining title to lands, tenements, or other real property." TEX. PROP. CODE ANN. § 22.001(a) (West 2014).

ELEMENTS OF PROOF 

"To prevail in a trespass-to-try-title action, a plaintiff must usually (1) prove a regular chain of conveyances from the sovereign, (2) establish superior title out of a common source, (3) prove title by limitations, or (4) prove title by prior possession coupled with proof that possession was not abandoned." Wilhoite v. Sims, 401 S.W.3d 752, 760 (Tex. App.-Dallas 2013, no pet.).

SOURCE: DALLAS COURT OF APPEALS - No. 05-13-01581-CV - 1/21/2015

In Coinmach Corp. v. Aspenwood Apartments Corp., 417 S.W.3d 909, 926 (Tex. 2013), the supreme court stated as follows:

We have previously held that, when "the trespass-to-try-title statute governs the parties' substantive claims . . ., [the plaintiff] may not proceed alternatively under the Declaratory Judgments Act to recover their attorney's fees." Martin v. Amerman, 133 S.W.3d 262, 267 (Tex. 2004). In so holding, we noted that the Legislature has provided the trespass-to-try-title statute as "the method of determining title to . . . real property," and the Legislature did not provide for attorney's fees in such actions. Id. (citing TEX. PROP.CODE § 22.001(a)) (emphasis added).. . . .

It is undisputed that the present case requires determination of the parties' possessory rights to the property. We see no legitimate basis to distinguish this case from Martin, in which we affirmed and upheld the Legislature's intent that chapter 22 of the Texas Property Code govern the resolution of disputes involving legal interests in real property.

Id. (emphasis original); see also Sani v. Powell, 153 S.W.3d 736, 745 (Tex. App.-Dallas 2005, pet. denied) (stating "[a]ny suit that involves a dispute over the title to land is, in effect, an action in trespass to try title, whatever its form" and attorney's fees pursuant to the declaratory judgments act "are not available in a suit to quiet title or to remove cloud on title"). Although both sides in the case before us couched their claims in terms of requests for declarations, everything requested of the court is necessary to, and a component of, the ultimate relief sought, which is to clear title to the front strip.[12] See Sani, 153 S.W.3d at 746. Accordingly, we conclude the Furnisses were not entitled to an award of attorney's fees under the declaratory judgments act and the trial court abused its discretion by awarding those fees. Id.; see Coinmach Corp., 417 S.W.3d at 926; XTO Energy, Inc., 357 S.W.3d at 62-63 (concluding that although validity of deed was contested, essence of suit was title dispute and therefore award of attorney's fees pursuant to declaratory judgments act was improper); see also RIHR Inc., 308 S.W.3d at 454.

We decide in ADLO's favor on its fifth issue.

SOURCE: FIFTH COURT OF APPEALS IN DALLAS TEXAS - No. 05-13-01581-CV - 1/21/2015

The Equitable Remedy of Constructive Trust

What is Constructive Trust as a form of relief in a lawsuit?

CONSTRUCTIVE TRUST DEFINED

A constructive trust is a legal fiction, a creation of equity to prevent a wrongdoer from profiting from her wrongful acts. Procom Energy, L.L.A. v. Roach, 16 S.W.3d 377, 381 (Tex. App.-Tyler 2000, pet. denied). Such trusts are remedial in character and have the broad function of redressing wrong or unjust enrichment in keeping with basic principles of equity and justice. Id.; see also Hubbard v. Shankle, 138 S.W.3d 474, 485 (Tex. App.-Fort Worth 2004, pet. denied).

 

ESSENTIAL ELEMENTS THAT MUST BE SATISFIED TO STAKE CLAIM FOR IMPOSITION OF A CONSTRUCT TRUST

 

To obtain a constructive trust, the proponent must prove (1) the breach of a special trust, fiduciary relationship, or actual fraud, (2) unjust enrichment of the wrongdoer, and (3) tracing to an identifiable res. Troxel v. Bishop, 201 S.W.3d 290, 297 (Tex. App.-Dallas 2006, no pet.); Hubbard, 138 S.W.3d at 485. "`A constructive trust is a relationship with respect to property, subjecting the person by whom the title to the property is held to an equitable duty to convey it to another, on the ground that [her] acquisition or retention of the property is wrongful and that [she] would be unjustly enriched if [she] were permitted to retain the property.'" Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d 723, 736 (Tex. App.-San Antonio 2007, pet. denied) (quoting Talley v. Howsley, 176 S.W.2d 158, 160 (Tex. 1943)).

SOURCE: SAN ANTONIO COURT OF APPEALS – No. 06-13-00043-CV – 2/20/2014

 

 

How to establish damages for temporary injury to real property

What is the proper measure of damages on a successful claim predicated on non-permanent injury to real property?

"In the case of a temporary injury to real estate, the measure of damages is ordinarily the cost and expense of restoring the land to its former condition, plus the loss or damages occasioned by being deprived of the use of same, with interest." Vaughn v. Drennon, 372 S.W.3d 726, 738 (Tex. App.-Tyler 2012, no pet.); see also Meridien Hotels, Inc. v. LHO Fin. P'ship I, L.P., 255 S.W.2d 807, 821 (Tex. App.-Dallas 2008, no pet.). Felder and Esperanza concede that the record contains no evidence to support the damage award, but appear to believe Esperanza is entitled to a remand for a new trial on this claim.

Because Hagee and Serengeti raised this issue in a motion for judgment notwithstanding the verdict and they assert a no evidence challenge on appeal, they are entitled to a rendition of the judgment, rather than a remand of the cause. See E-Z Mart Stores, Inc. v. Ronald Holland's A-Plus Transmission & Auto., Inc., 358 S.W.3d 665, 670 (Tex. App.-San Antonio 2011, pet. denied); but see Graves v. Tomlinson, 329 S.W.3d 128, 141 n.2 (Tex. App.-Houston [14th Dist.] 2010, pet. denied) (noting party entitled to remand rather than rendition if legal sufficiency issue preserved only by motion for new trial).

Accordingly, because there is no evidence to support the jury's damage award, the trial court's judgment regarding the trespass claim is reversed, and judgment is rendered that Esperanza take nothing as to the trespass claim.

SOURCE: SAN ANTONIO COURT OF APPEALS - No. 04-12-00434-CV - 1/22/2014
SERENGETI RESORT, LLC v. ESPERANZA PROPERTIES, LP ET AL

Mitigation in the context of default on real estate note and foreclosure

Mitigation in the foreclosure and breach of real estate note context: Bank not required to accept offer/consent to sale of secured property that would not have covered the entire indebtedness and would have precluded it from enforcing the note and obtain deficiency judgment against debtors

The doctrine of mitigation of damages prevents a party from recovering for damages resulting from a breach of contract that could be avoided by reasonable efforts on the part of the plaintiff. Great Am. Ins. Co. v. N. Austin Mun. Utility Dist. No. 1, 908 S.W.2d 415, 426 (Tex. 1995). In other words, where a party is entitled to the benefits of a contract and can save himself from the damages resulting from its breach at a trifling expense or with reasonable exertions, it is his duty to incur such expense and make such exertions. Id. (quoting Walker v. Salt Flat Water Co., 96 S.W.2d 231, 232 (Tex. 1936)). Although an injured party is required to exercise reasonable efforts to minimize damages, it is not required to mitigate its losses "by accepting an arrangement with the repudiator if that is made conditional on [its] surrender of [its] rights under the repudiated contract." Cook Composites, Inc. v. Westlake Styrene Corp., 15 S.W.3d 124, 135 (Tex. App.-Houston [14th Dist.] 2000, pet. dism'd) (quoting Publicker Chemical Corp. v. Belcher Oil Co., 792 F.2d 482, 488 (5th Cir. 1986)).

Here, the Williams parties, as the breaching parties, had the burden of proving that damages could have been mitigated. See Copenhaver v. Berryman, 602 S.W.2d 540, 544 (Tex. App.-Corpus Christi 1980, writ ref'd n.r.e.). The Williams parties base their failure to mitigate affirmative defense on testimony from Donald Williams, who found a buyer who was willing to pay "approximately $1,400,000" for one of the parcels at issue, but the Bank refused to give Williams its permission for the sale. If the Bank accepted this side arrangement with the Williams parties, it would have required the Bank to surrender its rights and remedies under the promissory notes, as well as the Agreement with regard to this particular parcel. Because the notes were in default, and the Williams parties failed to pay their indebtedness by June 7, 2011, the Bank was not required to mitigate its damages by forgoing its rights and remedies under the notes and the Agreement. See Cook Composites, 15 S.W.3d at 135. Without other evidence that damages could have been mitigated, the Williams parties failed to raise a question of fact on the Bank's failure to mitigate.[3]

ELEMENTS CREDITOR HAS TO PROVE WHEN SUING ON PROMISSORY NOTE

To recover a debt due and owing under a promissory note, a party must establish that it is the legal holder of an existing note, the debtor's execution of the note, and that an outstanding balance is due and owing. Austin v. Countrywide Homes Loans, 261 S.W.3d 68, 72 (Tex. App.-Houston [1st Dist.] 2008, pet. denied).

SOURCE: CORPUS CHRISTI-EDINBURG COURT OF APPEALS - No. 13-12-00704-CV - 1/16/2014 - Williams v. Compass Bank (creditor can't be forced into short sale under duty-to-mitigate-damages doctrine and give up its claim).

Footnote 3: We also note that the Bank had a right under the promissory notes to foreclose on the properties prior to the Agreement reached in 2011 because the Williams parties were in default. The Agreement, by itself, is further conclusive proof of the Bank's attempt to exercise reasonable efforts to minimize damages by forbearing its collection efforts and allowing the Williams parties to pay back its indebtedness.  

Notice to all: Lis Pendens - and bona fide purchaser defense

  

NOTICE OF LIS PENDENS AND ITS EFFECTS

 

During the pendency of an action involving enforcement of an encumbrance against real property, the party to the action who is seeking affirmative relief may file for record with the county clerk of each county where a part of the property is located a notice that the action is pending. TEX. PROP. CODE ANN. § 12.007(a) (West Supp. 2012).

 

A recorded lis pendens is notice to the world of its contents. Id. § 13.004(a) (West Supp. 2012). The purpose of lis pendens notice is twofold: (1) to protect the alleged rights of the party filing it to the property that is in dispute in the lawsuit, and (2) to put those interested in the property on notice of the lawsuit. Collins v. Tex Mall, L.P., 297 S.W.3d 409, 418 (Tex. App.-Fort Worth 2009, no pet.).

 

The doctrine of lis pendens is based on the public policy that there should be an end to litigation. Cherokee Water v. Advance Oil & Gas, 843 S.W.2d 132, 135 (Tex. App.-Texarkana 1992, writ denied). It accomplishes that policy by preventing alienations that would defeat the litigation and that would deprive the plaintiff of his relief by putting the property beyond the reach of the present action. Id. The doctrine does not void a conveyance of the property during pendency of the suit. Collins, 297 S.W.3d at 418. The interest of the grantor merely passes subject to the determination of the cause. Cherokee Water, 843 S.W.2d at 135.

A recorded lis pendens is notice to the world of its contents. See TEX. PROP. CODE ANN. § 13.004(a). The purpose of a lis pendens includes putting those interested in the property on notice of the lawsuit. See Collins, 297 S.W.3d at 418. Further, as a purchaser of real property, Brent is charged with knowledge of all facts appearing in the chain of title that would place a reasonably prudent person on inquiry as to the rights of other parties in the real property. See Noble Mortg., 340 S.W.3d at 76.

SOURCE: TYLER COURT OF APPEALS - No. 12-12-00029-CV – 1/31/2013

 

Here, the evidence showed that Charlie and Elaine filed and recorded a lis pendens, which stated that a suit was pending to declare a "security instrument" void. Afterwards, but before a judgment in the first suit had been rendered, Charlie and Elaine conveyed the real property to Brent. Because his parents filed a lis pendens before he purchased the real property, Brent had constructive knowledge of the first action involving the deed of trust lien, defeating his status as a bona fide purchaser for value. See id.; Madison, 39 S.W.3d at 606. Thus, Brent failed to raise a fact issue on his affirmative defense.

 

 

Statute of Frauds as to real estate transactions: What kind of description of the property is sufficient?

   

ADEQUACY - or otherwise - OF PROPERTY DESCRIPTION TO SATISFY THE STATUTE OF FRAUDS

  

The statute of frauds does not require that a complete description of the land to be conveyed appear in a single document. See Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995)) (holding that series of letters between parties satisfied statute of frauds). A property description is sufficient if the writing furnishes within itself, or by reference to some other existing writing, the means or data by which the particular land to be conveyed may be identified with reasonable certainty. See AIC Mgmt. v. Crews, 246 S.W.3d 640, 645 (Tex. 2008). The description of the land may be obtained from documents that are prepared in the course of the transaction, even if those documents are prepared after the parties’ contract for sale. See Porter v. Reaves, 728 S.W.2d 948, 949 (Tex. App.—Fort Worth 1987, no writ) (description of land as “1/2 of 20-acre tract” satisfied statute of frauds because location of tract was not disputed, the parties referenced a drawing of the tract in their contract, and seller was required to furnish “current survey” of land after contract was executed); see also Adams v. Abbott, 254 S.W.2d 78, 80 (Tex. 1952) (description furnished by exchange of correspondence between the parties)

   

SOURCE: HOUSTON COURT OF APPEALS - 01-11-00460-CV – 5/25/12 

General Metal Fabricating Corporation v Stergiou (Tex.App.- Houston [1st Dist.] May 24, 2012)

Payment of commission in real estate transaction governed by statute of frauds in RELA

   

REAL Estate License Act requires commission agreement to be in writing and to contain specific items of essential information.

  

Written agreement compliant with statute of frauds provision of the Real Estate License Act (RELA) required for payment of commission for sale/purchase of real estate to be enforceable.
    
The statute of frauds provision of RELA provides,
 

A person may not maintain an action in this state to recover a commission for the sale or purchase of real estate unless the promise or agreement on which the action is based, or a memorandum, is in writing and signed by the party against whom the action is brought or by a person authorized by that party to sign the document.

 

Tex. Occ. Code Ann. § 1101.806(c) (West 2012).

 

To comply with this section, an agreement or memorandum must: (1) be in writing and must be signed by the person to be charged with the commission; (2) promise that a definite commission will be paid, or must refer to a written commission schedule; (3) state the name of the broker to whom the commission is to be paid; and (4) either itself or by reference to some other existing writing, identify with reasonable certainty the land to be conveyed. Lathem v. Kruse, 290 S.W.3d 922, 925 (Tex. App.-Dallas 2009, no pet.). Strict compliance with RELA is required; the agreement to pay a real estate commission must be in writing or it is not enforceable. Id. The essential elements of the agreement may not be supplied by parol evidence. Boyert v. Tauber, 834 S.W.2d 60, 62 (Tex. 1992).

   

SOURCE: DALLAS COURT OF APPEALS - 05-10-00675-CV – 4/26/12

  
None of the documents on which appellees rely contains a promise to pay a real estate commission or identifies appellees as brokers to whom a commission will be paid. Accordingly, there is no evidence of a written agreement complying with the statute of frauds provision of RELA. See Tex. Occ. Code Ann. § 1101.806(c); Lathem, 290 S.W.3d 925. We sustain Litton's third issue. Having sustained Litton's third issue, we need not consider its other issues. Tex. R. App. P. 47.1.

Liz who? Liz what? - Lis Pendens ...

Lis pendens is Latin for pending lawsuit. The typical usage in English is "notice of lis pendens", -- a document putting interested parties (potential buyers of property) on notice that a particular piece of real estate is involving in litigation that is currently ongoing. 

LIS PENDENS IS NOT A CAUSE OF ACTION
 

A lis pendens may be filed during the pendency of an action involving title to real property, the establishment of an interest in real property, or an enforcement of an encumbrance against real property. TEX. PROP. CODE ANN. § 12.007 (West 2009). The purpose of a lis pendens is to put parties interested in a particular tract of land on notice as to the facts and issues involved in a suit or action concerning that particular tract. In re Jamail, 156 S.W.3d 104, 108 (Tex. App.—Austin 2004, orig. proceeding.); In re Collins, 172 S.W.3d 287, 292–93 (Tex. App.—Fort Worth 2005, orig. proceeding); Garza v. Pope, 949 S.W.2d 7, 8 (Tex. App.—San Antonio 1997, no writ). 
  
A lis pendens is not an independent claim, Collins v. Tex Mall, L.P., 297 S.W.3d 409, 419 (Tex. App.—Fort Worth 2009, no pet.), and has no existence separate and apart from the litigation of which it gives notice. Taliaferro v. Smith, 804 S.W.2d 548, 550 (Tex. App.—Houston [14th Dist.] 1991, no writ). Under Texas law, a lis pendens does not prevent a sale of the property; it merely places a purchaser on notice that a person other than the title holder claims an interest in the property. Group Purchases, Inc. v. Lance Inv., Inc., 685 S.W.2d 729, 731 (Tex. App.—Dallas 1985, writ ref’d n.r.e.). A lis pendens notice operates during the pendency of the lawsuit and terminates with the judgment, in the absence of appeal. Berg v. Wilson, 353 S.W.3d 166, 180 (Tex. App.—Texarkana 2011, pet. denied); see also Hartel v. Dishman, 135 Tex. 600, 145 S.W.2d 865, 869 (1940); Collins, 297 S.W.3d at 418.

Section 12.0071 of the Texas Property Code provides the statutory authority for expunging a lis pendens. TEX. PROP. CODE ANN. § 12.0071 (West Supp. 2011). Section 12.071 provides in part

(a) A party to an action in connection with which a notice of lis pendens has been filed may:

(1) apply to the court to expunge the notice; and

(2) file evidence, including declarations, with the motion to expunge the notice.

(b) The court may:

(1) permit evidence on the motion to be received in the form of oral testimony; and

(2) make any orders the court considers just to provide for discovery by a party affected by the motion.

(c) The court shall order the notice of lis pendens expunged if the court determines that:

(1) the pleading on which the notice is based does not contain a real property claim;

(2) the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim; or

(3) the person who filed the notice for record did not serve a copy of the notice on each party entitled to a copy under Section 12.007(d).

(d) Notice of a motion to expunge under Subsection (a) must be served on each affected party on or before the 20th day before the date of the hearing on the motion.

TEX. PROP. CODE ANN. § 12.0071 (West Supp. 2011). The record does not reflect that any party to the underlying action filed a motion to expunge the second lis pendens, nor do the children argue one was filed. It appears from the record the trial court sua sponte, only four days after the second lis pendens was filed, ordered the second lis pendens expunged.

Section 12.0071 allows a party to file a motion requesting the trial court expunge a notice lis pendens, but the statute requires that the motion be served on each affected person on or before the 20th day before a hearing on the matter. No party filed a motion and Carmen was not provided twenty days’ notice that the trial court was considering expunging the lis pendens. We hold the trial court erred in expunging the lis pendens sua sponte and without proper notice to each affected party.

  

SOURCE: SAN ANTONIO COURT OF APPEALS - 04-11-00332-CV - 4/18/12

Real Estate Transactions: What degree of specificity is required to satisfy the statute of frauds?

  
STATUTE OF FRAUDS GOVERNING CONVEYANCE OF REAL ESTATE, PURCHASE-OPTION CONTRACTS
 

Under the applicable statute of frauds, a contract for the sale of real estate is not enforceable unless it, or a memorandum of it, is in writing and signed by the person to be charged with the contract.  Tex. Bus. & Com. Code Ann. § 26.01(a), (b)(4) (Vernon 2009).  For a contract concerning the conveyance of real estate to satisfy the statute of frauds, “the writing must furnish within itself, or by reference to some other existing writing, the means or data by which the particular land to be conveyed may be identified with reasonable certainty.”  Wilson v. Fisher, 188 S.W.2d 150, 152 (Tex. 1945).  This applies to a purchase option in a contract.  See Matney v. Odom, 210 S.W.2d 980, 981–82 (Tex. 1948) (applying statute of frauds analysis to purchase option in contract).  Whether a contract falls within the statute of frauds is a question of law.  Iacono v. Lyons, 16 S.W.3d 92, 94 (Tex. App.—Houston [1st Dist.] 2000, no pet.).

  

The purpose of a description in a written conveyance is not to identify the land, but to afford a means of identification.  Jones v. Kelley, 614 S.W.2d 95, 99–100 (Tex. 1983).  While we apply a strict application of the statute of frauds, we allow for a liberal construction of the words describing the land.  Gates v. Asher, 280 S.W.2d 247, 248 (Tex. 1955).   

  

A metes-and-bounds description is not required to satisfy the statute of frauds.  Tex. Builders v. Keller, 928 S.W.2d 479, 481 (Tex. 1996).  Similarly, a plat in a recorded property description is not required.  Nguyen v. Yovan, 317 S.W.3d 261, 269 (Tex. App.—Houston [1st Dist.] 2009, pet. denied).  Nor does the description of the property require “[c]onviction beyond all peradventure of doubt.”  Gates, 280 S.W.2d at 249; see also Templeton v. Dreiss, 961 S.W.2d 645, 659 (Tex. App.—San Antonio 1998, pet. denied) (holding mathematical certainty not required).  Instead, only proof within “reasonable certainty” is required.  Gates, 280 S.W.2d at 249.

  

“If enough appears in the description so that a party familiar with the locality can identify the premises with reasonable certainty, it will be sufficient.”  Id. at 248–49.  Generally speaking, a property can be identified with reasonable certainty if it identifies the general area of the land and “contains information regarding the size, shape, and boundaries.”  Reiland v. Patrick Thomas Props., Inc., 213 S.W.3d 431, 437 (Tex. App.—Houston [1st Dist.] 2006, pet. denied); accord Fears v. Tex. Bank, 247 S.W.3d 729, 736 (Tex. App.—Texarkana 2008, pet. denied).

  

“[W]hen construing a conveyance, the court does not look at terms in isolation; rather, it must give effect to all parts of the conveyance and construe the document as a whole.”  Plainsman Trading Co. v. Crews, 898 S.W.2d 786, 789 (Tex. 1995).  When a contract includes a map of the property to be conveyed as a part of its description of the property, this is included in the analysis of whether the description satisfies the statute of frauds.  Matney, 210 S.W.2d at 984; U.S. Enters., Inc. v. Dauley, 535 S.W.2d 623, 628 (Tex. 1976).  “Whether a map is helpful in remedying descriptive defects of the contract depends on whether the missing details are shown on the map.”  U.S. Enters., 535 S.W.2d at 628.

   

While parol evidence may be considered under certain circumstances, it cannot be used to supply the “essential elements” of the contract.  Wilson, 188 S.W.2d at 152.  In contrast, it can be used to “explain or clarify the essential terms appearing in the” contract.  Id. 

   

If it does not sufficiently describe the land to be conveyed, a conveyance of an interest in real property is void and unenforceable under the statute of frauds.  Nguyen, 317 S.W.3d at 267.

SOURCE: HOUSTON COURT OF APPEALS – NO. 01-11-00328-CV   -- 4/19/12

(“The property description contained with the sublease is not so vague or ambiguous as to render its boundaries indeterminable.  Additionally, the record shows that a surveyor, using the information contained in or referenced by the sublease, was able to identify the property with reasonable certainty.  Accordingly, we hold that the trial court erred by determining, as a matter of law, that the property subject to the sublease’s purchase option could not be identified with a reasonable certainty.”) 

Unknowingly bought a termite-infested home in Texas? What cause of action provides relief?

  
A case decided by the Dallas Court of Appeals today discusses fraud by non-disclosure and DTPA in a case involving sale of a termite-infested house.
 

FRAUD, MISREPRESENTATION, FAILURE TO MAKE DISCLOSURE OF DEFECTS IN CONNECTION WITH
SALE OF RESIDENCE

ELEMENTS OF FRAUD & FRAUDULENT NON-DISCLOSURE  
  
The elements of a cause of action for fraud are: (1) that a material misrepresentation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Fraud also occurs when a party fails to disclose a material fact within the knowledge of that party; the party knows that the other party is ignorant of the fact and does not have an equal opportunity to discover the truth; the party intends to induce the other party to take some action by failing to disclose the fact; and the other party suffers injury as a result of acting without knowledge of the undisclosed fact. New Process Steel Corp. v. Steel Corp. of Texas, 703 S.W.2d 209, 214 (Tex. App.-Houston [1st Dist.] 1985, writ ref'd n.r.e.). A seller is charged with disclosing such material facts as to put a buyer exercising reasonable diligence on notice of the condition of the house. Cole v. Johnson, 157 S.W.3d 856, 860-61 (Tex. App.-Fort Worth 2005, no pet.).

Under certain circumstances, a buyer's independent inspection of the property may conclusively defeat two elements of a fraud claim: causation and reliance. A buyer's independent inspection precludes a showing of causation and reliance if it reveals to the buyer the same information that the seller allegedly failed to disclose. See Lesieur v. Fryar, 325 S.W.3d 242, 246-49 (Tex. App.-San Antonio 2010, no pet.).

SOURCE: DALLAS COURT OF APPEALS - 05-10-00173-CV - 12/15/11

DECEPTIVE TRADE PRACTICES ACT (Texas DTPA)

“The DTPA grants consumers a cause of action for false, misleading, or deceptive acts or practices.”Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex.1996); see Tex. Bus. & Com. Code Ann. § 17.50(a) (West Supp. 2010); see also id. §§ 17.45(5), 17.46(b). The trial court found the Home-Sellers knowingly engaged in a misleading, deceptive act that the Homebuyers relied on to their detriment and which was a producing cause of damages to the Homebuyers. The elements of a DTPA claim are: (1) the plaintiff was a consumer; (2) the defendant either engaged in false, misleading or deceptive acts (i.e., violated a specific laundry-list provision of the DTPA) or engaged in an unconscionable action or course of action; and (3) the DTPA laundry-list violation or unconscionable action was a producing cause of the plaintiff's injury. Amstadt, 919 S.W.2d at 649; see Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex.1995). In our review of a DTPA claim, we must liberally construe and apply the statute to promote the underlying goals of the statute, which include protecting consumers against false, misleading, and deceptive business practices and unconscionable actions. See Tex. Bus. & Com. Code Ann. § 17.44(a) (West 2002); Latham v. Castillo, 972 S.W.2d 66, 68 (Tex.1998).
  
WHAT DAMAGES CAN BE RECOVERED UNDER THE DTPA?
 
A consumer who prevails on a claim under the DTPA may obtain the amount of economic damages found by the trier of fact. Tex. Bus. & Com. Code Ann. § 17.50(b)(1) (West Supp. 2010). If the trier of fact finds that the conduct of the defendant was committed knowingly, the consumer may also recover damages for any mental anguish found by the trier of fact. Id. A prevailing party shall be awarded reasonable and necessary attorney's fees and any other relief which the court deems proper. Id. §§17.50(d); 17.50(b)(4).
  
An award of mental anguish damages will survive a legal sufficiency challenge when the plaintiffs have introduced direct evidence of the nature, duration, and severity of their mental anguish, thus establishing a substantial disruption in the plaintiffs' daily routine. Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). Direct evidence of mental anguish may be in the form of the parties' own testimony, that of third parties, or experts. Id. There must also be some evidence to justify the amount awarded, and the amount awarded must be fair and reasonable. Saenz v. Fid. & Guar. Ins. Underwriters, 925 S.W.2d 607, 614 (Tex. 1996).
  
Direct evidence of mental anguish may be in the form of the parties' own testimony, that of third parties, or experts. Parkway, 901 S. W. 2d at 444.

SOURCE: DALLAS COURT OF APPEALS - 05-10-00173-CV - 12/15/11

BUYERS vs. SELLERS 

of termite-infested home

Firth Court of Appeals affirms judgment for Buyers
in unsuccessful appeal by Sellers

Rick and Kathy [Home-Sellers] appeal the trial court's judgment awarding Jerry and Connie [Homebuyers] damages on their claims arising out of their purchase of a termite-infested house from the Home-Sellers. In four issues, the Home-Sellers argue the evidence is factually insufficient to support the trial court's judgment, and the trial court erred by (1) declining to make findings of fact and conclusions of law, (2) rendering judgment in favor of the Homebuyers when the evidence was factually insufficient to support the judgment, (3) failing to grant the Home-Sellers' motion for judgment as a matter of law, and (4) awarding judgment for out-of-pocket expenses, loss of fair market value, mental anguish, and attorney's fees. We affirm the trial court's judgment.

NOTE: The court of appeals' opinion refers to the parties by their real names; they have here been replaced with functional labels

In the summer of 2006, the Homebuyers, interested in purchasing a property in Sherman, were driving through a residential neighborhood when they saw a for sale sign in front of the Home-Sellers' home. The Homebuyers stopped and got out to look at the house, and the Home-Sellers came out and offered to give them a tour of the house. During the tour, the Home-Sellers discussed the remodeling they had done to the house. The Homebuyers decided to buy the house and offered $125,000, which the Home-Sellers accepted. The Homebuyers hired James Langford to do a home and termite inspection before the closing. The Homebuyers and Home-Sellers were all present at the time of the inspection. In the seller's disclosure statement, the Homebuyers had seen the Seller's disclosure that the house had been “sprayed and treated in spring for termite[s]. Outside only.” The Home-Sellers had told the realtor that it was “for maintenance purposes only.” During the inspection, Langford asked where the termites were. Rick Seller did not respond to Langford's question, and Langford asked, “Where did you spray?” Rick Seller said “it was outside, out down around the old storage building.” Connie Home-Buyer “felt a concern” and asked Rick Seller if there were any termites or if there had ever been any termites. Rick Seller said no. The sale proceeded to closing.

The Homebuyers began moving into the house and found termites on September 1, 2006, nine days after closing. At that time, the interior of the home appeared freshly painted. Connie Home-Buyer set a box down and bumped into a picture and a dry erase board that the Home-Sellers had left in the kitchen. The dry erase board and picture fell down, revealing a hole in the wall behind each one. Connie Home-Buyer began removing the wallpaper in the kitchen because she knew she was “going to have to redo it” and “get that hole fixed in the kitchen.” When Connie Home-Buyer removed the “very first piece of wallpaper” she discovered what she recognized were termite holes.

The Homebuyers hired a licensed exterminator and termite inspector, Roy Reed, to perform an inspection on September 8, 2006. In the den ceiling, Reed immediately identified an area where the termites had already eaten the wood, and it was “not even wood anymore, [it was] caulk.” Reed pushed up with his thumb on the ceiling and “termites just showered down on him.” Reed told Connie Home-Buyer “what pictures to take as he was going through the inspection,” and the photos were admitted at trial. The inspection revealed termite infestation in the house, and the Homebuyers “never unpacked.” The Homebuyers got estimates on repairing the termite damage, but they could not afford to make the repairs, and they decided to move. The Homebuyers rented a place to live and sold the house approximately eight months later for $74,000, a thousand dollars less than they owed the bank. In July 2007, the Homebuyers sued the Home-Sellers and Langford. The Homebuyers settled their claims against Langford. Following a bench trial, the trial court entered judgment in favor of the Homebuyers, and this appeal followed.

In their first issue, the Home-Sellers argue the trial court erred in failing to make findings of fact and conclusions of law. Contrary to the Home-Sellers' assertion, the record contains the trial court's letter to the parties making findings that (1) the Home-Sellers engaged in a misleading, deceptive act that the Homebuyers relied on to their detriment and which was a producing cause of damages to the Homebuyers; (2) the Home-Sellers engaged in such conduct knowingly; and (3) the Home-Sellers committed fraud against the Homebuyers. The trial court went on to find the Homebuyers were entitled to benefit of the bargain damages, out of pocket expenses, mental anguish damages, “additional damages permitted by the DTPA,” and attorney's fees.

After the trial court files its original findings of fact and conclusions of law, any party may file a request for specified additional or amended findings or conclusions with the clerk of the court. Tex. R. Civ. P. 298;Gentry v. Squires Constr., Inc., 188 S.W.3d 396, 408 (Tex. App.-Dallas 2006, no pet.). The failure of a party to request additional or amended findings or conclusions waives the party's right to complain on appeal about the presumed finding. Gentry, 188 S.W.3d at 408. The Home-Sellers failed to request additional or amended findings and therefore have waived any complaint. We overrule the Home-Sellers' first issue.

In their second issue, the Home-Sellers argue the evidence is factually insufficient to support the trial court's judgment. The Home-Sellers argue the evidence is factually insufficient to show they made false material representations to the Homebuyers or their acts were a substantial factor in bringing about an injury to the Homebuyers.

[section on factual sufficiency challenge omitted]

The trial court found the Home-Sellers committed fraud against the Homebuyers. The elements of a cause of action for fraud are: (1) that a material misrepresentation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Fraud also occurs when a party fails to disclose a material fact within the knowledge of that party; the party knows that the other party is ignorant of the fact and does not have an equal opportunity to discover the truth; the party intends to induce the other party to take some action by failing to disclose the fact; and the other party suffers injury as a result of acting without knowledge of the undisclosed fact. New Process Steel Corp. v. Steel Corp. of Texas, 703 S.W.2d 209, 214 (Tex. App.-Houston [1st Dist.] 1985, writ ref'd n.r.e.). A seller is charged with disclosing such material facts as to put a buyer exercising reasonable diligence on notice of the condition of the house. Cole v. Johnson, 157 S.W.3d 856, 860-61 (Tex. App.-Fort Worth 2005, no pet.).

“The DTPA grants consumers a cause of action for false, misleading, or deceptive acts or practices.”Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex.1996); see Tex. Bus. & Com. Code Ann. § 17.50(a) (West Supp. 2010); see also id. §§ 17.45(5), 17.46(b). The trial court found the Home-Sellers knowingly engaged in a misleading, deceptive act that the Homebuyers relied on to their detriment and which was a producing cause of damages to the Homebuyers. The elements of a DTPA claim are: (1) the plaintiff was a consumer; (2) the defendant either engaged in false, misleading or deceptive acts (i.e., violated a specific laundry-list provision of the DTPA) or engaged in an unconscionable action or course of action; and (3) the DTPA laundry-list violation or unconscionable action was a producing cause of the plaintiff's injury. Amstadt, 919 S.W.2d at 649; see Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex.1995). In our review of a DTPA claim, we must liberally construe and apply the statute to promote the underlying goals of the statute, which include protecting consumers against false, misleading, and deceptive business practices and unconscionable actions.See Tex. Bus. & Com. Code Ann. § 17.44(a) (West 2002); Latham v. Castillo, 972 S.W.2d 66, 68 (Tex.1998).

Here, Rick Seller testified that, at the time he filled out the seller's disclosure form, he knew that in 2004 he had found live and dead termites in the garage and the “freezer room,” a room connected to the house. The Home-Sellers called Barry Walker to treat the termites. Walker advised them to treat the entire house for termites. The termites came back in the spring of 2005, and Walker treated them again. In spring 2006, a few months before the sale of the house to the Homebuyers, termites appeared again in the garage and freezer room, and Walker treated them. The Home-Sellers did not disclose any of these treatments in the garage and freezer room attached to the house. Instead, the Seller's disclosure stated that the house had been “sprayed and treated in spring for termite[s]. Outside only.”

Connie Home-Buyer testified Rick Seller said at the time of the inspection that he sprayed for termites “outside, out down around the old storage building.” Connie Home-Buyer “felt a concern” and asked Rick Seller if there were any termites or if there had been any termites at the property. Rick Seller said no. Connie Home-Buyer testified she would not have closed on the house if she had known the Home-Sellers (1) had seen a swarm of termites outside the house in the spring of 2004, (2) had a professional treat the house for termites in 2004, and (3) had a recurrence of termites in 2005 and had a professional come out and treat the house. We conclude this evidence was factually sufficient to support the trial court's determination that the Home-Sellers made false material representations to the Homebuyers, and their acts were a substantial factor in bringing about an injury to the Homebuyers. See Plas-Tex, Inc., 772 S.W.2d at 445. Further, the evidence was factually sufficient to show the Homebuyers acted in reliance on the Home-Sellers' misrepresentations. See In re FirstMerit Bank, N.A., 52 S.W.3d at 758; Amstadt, 919 S.W.2d at 649.

In their third issue, the Home-Sellers argue the trial court erred in failing to grant their “motion for verdict as a matter of law” on the Homebuyers' fraud and DTPA claims. See Footnote . Specifically, they argue “the Homebuyers' reliance on their own professional inspection negates the element of reliance.”

Under certain circumstances, a buyer's independent inspection of the property may conclusively defeat two elements of a fraud claim: causation and reliance. A buyer's independent inspection precludes a showing of causation and reliance if it reveals to the buyer the same information that the seller allegedly failed to disclose. See Lesieur v. Fryar, 325 S.W.3d 242, 246-49 (Tex. App.-San Antonio 2010, no pet.). Relying on Dubow v. Dragon, 746 S.W.2d 857 (Tex. App.-Dallas 1988, no writ), the Home-Sellers argue the Homebuyers' careful inspection of the property in this case negated the element of reliance. Based on the facts presented in Dubow, this Court concluded that “the [buyers'] 'careful' inspection of the house's condition constituted a new and independent basis for the purchase which intervened and superseded the [sellers'] alleged wrongful act.” Id. at 860. But the crucial fact in Dubow was not the buyers' procurement of an independent inspection; it was their express and exclusive reliance on the “professional opinions” they received to renegotiate the sales contract that resulted in the sale of the house. Id.; see Fernandez v. Schultz, 15 S.W.3d 648, 652 (Tex. App.-Dallas 2000, no pet.). In this case, there is no evidence that the Homebuyers relied solely on the opinion of their inspector in making their decision to purchase the house. See Fernandez, 15 S.W.3d at 652. Also, the contract here was never renegotiated in reliance on the inspection. See id. In fact, the testimony shows the Homebuyers' decision to buy the property would have been materially affected if the Home-Sellers had told them on the seller's disclosure form about the prior termites in the home. See id.

Although it may be true that their inspector's failure to discover the termites inside the house was a producing cause of the Home-Buyer's damages, there nevertheless may be more than one producing cause of damages in a case. Fernandez, 15 S.W.3d at 653. Here, the Home-Sellers' failure to disclose their knowledge of the termites was also a producing cause of the Homebuyers' damages. Id. Had the Home-Sellers informed the Homebuyers about the termites, they could have required their inspector to look more deeply for signs of termite damage. Id. Further, the evidence shows the Home-Sellers actively concealed the presence of the termites, thus making it more difficult for the inspector to discover them. Id. Accordingly, we conclude the Homebuyers' procurement of an independent inspection did not supersede the Home-Sellers' actions as a producing cause of damages. See id.We overrule the Home-Sellers' third issue.

In their fourth issue, the Home-Sellers argue the trial court erred in awarding “out-of-pocket” expenses, loss of fair market value, mental anguish damages, and attorney's fees. Specifically, the Home-Sellers argue the Homebuyers failed to present competent evidence to support any damages. In reviewing a contention of no evidence to support a trial court's finding, we must consider only the evidence and inferences tending to support the finding and disregard all evidence and inferences to the contrary. Fernandez, 15 S.W.3d at 651. If there is more than a scintilla of evidence to support the finding, it must be upheld. Id.

A consumer who prevails on a claim under the DTPA may obtain the amount of economic damages found by the trier of fact. Tex. Bus. & Com. Code Ann. § 17.50(b)(1) (West Supp. 2010). If the trier of fact finds that the conduct of the defendant was committed knowingly, the consumer may also recover damages for any mental anguish found by the trier of fact. Id. A prevailing party shall be awarded reasonable and necessary attorney's fees and any other relief which the court deems proper. Id. §§17.50(d); 17.50(b)(4).

A property owner is qualified to testify to the market value of his property. Redman Homes v. Ivy, 920 S.W.2d 664, 669 (Tex. 1996). This evidence is probative if it is based on the owner's estimate of market value and not some intrinsic or other value such as replacement cost. Id. The Home-Sellers argue a property owner has to show some familiarity with market value. Connie Home-Buyer testified she researched the market value of the property through a realtor and determined the property had to be sold in “as-is” condition. Jerry Home-Buyer testified he paid $125,000 for the house and, after the termites were discovered, he was able to sell the house for only $74,000. Connie Home-Buyer testified she had owned six houses in the past as real estate investments and sold the properties after remodeling them. Thus, the record shows the Homebuyers' testimony concerning market value was based on their estimates of market value and not some intrinsic or other value. See id.

As to out-of-pocket expenses, Jerry Home-Buyer testified he and Connie incurred expenses of $13,250 to rent a home because the house they bought from the Home-Sellers was uninhabitable, $652 to maintain insurance on the house, $404 for renters' insurance, $610.96 in moving costs, and $2401.89 in taxes. Connie Home-Buyer testified she had owned six houses “as a home investor.” She got bids to repair the house, but the bids were limited in scope to the damage visible at the time. The bids ranged from $40,000 to $60,000. The Homebuyers decided to sell the house and placed an advertisement in the newspaper. A realtor told the Homebuyers that the house had to be sold “as-is.” In eight months of trying to sell the house, the Homebuyers received only three calls from “interested” parties, and only two people looked at the house. One person made an offer of $74,000, and the Homebuyers accepted the offer.

An award of mental anguish damages will survive a legal sufficiency challenge when the plaintiffs have introduced direct evidence of the nature, duration, and severity of their mental anguish, thus establishing a substantial disruption in the plaintiffs' daily routine. Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). Direct evidence of mental anguish may be in the form of the parties' own testimony, that of third parties, or experts. Id. There must also be some evidence to justify the amount awarded, and the amount awarded must be fair and reasonable. Saenz v. Fid. & Guar. Ins. Underwriters, 925 S.W.2d 607, 614 (Tex. 1996).

The Home-Sellers cite the standard that “the evidence must show a high degree of mental pain and distress that is more than worry, anxiety, vexation, embarrassment or worry,” citing Houston Livestock Show & Rodeo, Inc. v. Hamick, 125 S. W. 3d 555 (Tex. App.-Austin 2003, no pet.). They argue that the evidence from Connie Home-Buyer showed she experienced stress, lost a little weight, felt anxiety because of her husband's drinking, and refused to take any anti-anxiety medicine. The Home-Sellers also cite Jerry Home-Buyer's testimony that some of his wife's anxiety was directly related to his issues with alcohol.

Direct evidence of mental anguish may be in the form of the parties' own testimony, that of third parties, or experts. Parkway, 901 S. W. 2d at 444. Connie Home-Buyer testified she and her husband put their life savings into a home they could neither live in nor afford to repair. She testified that it destroyed them financially. Connie Home-Buyer related how her husband had maintained his sobriety for twelve years but began drinking again because of this stress. She convinced him to go to the doctor, who prescribed medication. Jerry Home-Buyer has continued to take prescription medication for the last two years. Connie Home-Buyer testified she was unable to eat for three months after this occurred, she threw up everything she ate, and she lost fifteen pounds. Under cross examination, she stated her husband's relapse was caused by the loss of the house, and she was under a lot of mental anguish and a lot of mental pain. Jerry Home-Buyer testified how very hard emotionally this had been and that this was his only relapse in his sobriety. Evidence that Jerry Home-Buyer maintained his sobriety for twelve years and then relapsed under the financial stress of losing his home and life savings, together with evidence Connie Home-Buyer shared in this loss and was unable to eat, is evidence of much more than mere worry, anxiety, vexation, embarrassment, or anger. We conclude the evidence was sufficient to establish the nature, duration, and severity of their mental anguish. See Parkway, 901 S. W. 2d at 444.

[section on law governing award of attorney's fees and segregation requirement omitted]

The Homebuyers' attorney stated his attorney's fees were $29,944.75, and he had deleted $5477.50 from his bills relating to the proceedings against Langford. The Homebuyers' attorney testified the remaining bills were for time spent on the Home-Sellers' case involving DTPA and fraud, and he was unable to separate those bills because they were so intertwined. The Homebuyers' attorney testified $24,467.25 would be a reasonable fee for the work he performed in this case. The Homebuyers' attorney was cross examined about both the time spent on the case and the segregation of fees. The Home-Sellers stipulated that the Homebuyers' attorney was qualified when he began his testimony regarding attorney's fees. The trial court heard all the evidence and awarded attorney's fees of $20,000. The record shows the attorney's fees associated with claims against Langford were segregated. Because the record shows the legal services advanced both the fraud and DTPA claims against the Home-Sellers, the fees were so intertwined that segregation was not necessary. See Chapa, 212 S.W.3d at 313.

This record shows the Homebuyers presented competent evidence of out-of-pocket expenses, loss of fair market value, mental anguish damages, and attorney's fees. We therefore uphold the trial court's finding on these damages. See Fernandez, 15 S.W.3d at 651. We overrule the Home-Sellers' fourth issue.

We affirm the trial court's judgment.

DAVID L. BRIDGES

JUSTICE

________________________________________

Footnote:  Although the Home-Sellers also argue the trial court erred in denying their motion for judgment on the Homebuyers' negligent misrepresentation claims, the Homebuyers did not assert a claim for negligent misrepresentation, and the trial court's judgment did not award relief on a negligent misrepresentation claim. While the Homebuyers' original petition alleged certain negligence claims against Langford, all claims against Langford were dismissed prior to trial.

________________________________________

SOURCE: DALLAS COURT OF APPEALS - 05-10-00173-CV - 12/15/11

Statute of frauds as to sale of land, real property, may not always nix claim of ownership in the absence of a deed

   
Conveyance of land normally requires a proper written instrument (deed), but there are exceptions. Moreover, the statute of frauds is an affirmative defense subject to waiver.
    
TEXAS STATUTE OF FRAUDS AS TO REAL ESTATE TRANSACTIONS AND
EXCEPTIONS TO ITS STRICT APPLICATION
  
Under Texas law, oral contracts to convey land are not void, but unenforceable if the party against whom enforcement is sought raises the statute of frauds as a defense. Joiner v. Elrod, 716 S.W.2d 606, 608-09 (Tex. App.—Corpus Christi 1986, no writ).
   
To relieve a parol sale of land from the operation of the statute of frauds, three things are necessary: (1) payment of the consideration, whether it be in money or services; (2) possession by the vendee; and (3) the making by the vendee of valuable and permanent improvements upon the land with the consent of the vendor or, without such improvements, the presence of such facts as would make the transaction a fraud upon the purchaser if it were not enforced. Hooks v. Bridgewater, 111 Tex. 122, 126-27, 229 S.W.2d 1114, 1116-117 (1921).
  
This is also called the doctrine of partial performance. See Boyert v. Tauber, 834 S.W.2d 60, 63 (Tex. 1992) (“Under the doctrine of partial performance as applied to the statute of frauds, an oral contract for the purchase of real property is enforceable if the purchaser: (1) pays the consideration; (2) takes possession of the property; and (3) makes permanent and valuable improvements on the property with the consent of the seller, or, without such improvements, other facts are shown that would make the transaction a fraud on the purchaser if the oral contract was not enforced.”).

SOURCE: CORPUS CHRISTI COURT OF APPEALS - 13-10-00490-CV – 12/1/11 

Legal action to divide land (partition suit) has some particularities

   
Partition suit involving jointly-owned land is exception to the rule that a lawsuit can only result in one final and appealable judgment (barring severance of claims).
  
SUIT FOR PARTITION OF LAND HAS SOME QUIRKS
    

Partition serves to divide property owned by co-tenants and concerns possession, not title. See Barham v. McGraw, 342 S.W.3d 716, 719 (Tex. App.—Amarillo 2011, pet. filed); Dierschke v. Central Nat’l Branch of First Nat’l Bank of Lubbock, 876 S.W.2d 377, 380 (Tex. App.—Austin 1994, no writ) (stating that an owner of a non-possessory interest cannot compel partition). Thus, to prevail in a suit for partition, “a plaintiff need only establish that he owns an interest in the property and has a right to possession of a portion thereof.” Trevino v. Trevino, 64 S.W.3d 166, 171 (Tex. App.—San Antonio 2001, no pet.). In order to have a partitionable, “possessory interest” in a given piece of property, one must have an equal “right to possession” with the other joint owners. Savell v. Savell, 837 S.W.2d 836, 838-40 (Tex. App.—Houston [14th Dist.] 1992, writ denied) (must have right to present possessory interest); Brelsford v. Scheltz, 564 S.W.2d 404, 406 (Tex. Civ. App.—Houston [1st Dist.] 1978, writ ref'd n.r.e.); Lichtenstein v. Lichtenstein Bldg. Corp., 442 S.W.2d 765, 767-68 (Tex. Civ. 5 App.—Corpus Christi 1969, no writ) (party seeking the partition must have an equal right to possession with the other joint owners). The trial court shall order partition if it “determines that the whole, or any part of such property is susceptible of partition.” TEX. R. CIV. P. 761.

  
TWO FINAL JUDGMENTS
   
A partition case, unlike other proceedings, has two final judgments, and the first one is appealable as a final judgment. Griffin v. Wolfe, 610 S.W.2d 466, 466 (Tex. 1980). The first decree determines the interest of each of the joint owners or claimants, all questions of law affecting the title, and appoints commissioners and gives them appropriate directions. Ellis v. First City Nat'l Bank, 864 S.W.2d 555, 557 (Tex. App.—Tyler 1993, writ denied); see also TEX. R. CIV. P. 760, 761.
  
The second decree approves the report of the commissioners and sets aside to the parties their separate shares. Ellis, 864 S.W.2d at 557. In addition to determining the basic issues of partitionability in kind and the fractional interest of the parties, the trial court also has the power during the initial stage of the partition proceeding to adjust all equities between the parties. Yturria v. Kimbro, 921 S.W.2d 338, 342 (Tex. App.—Corpus Christi 1996, no writ); see also Snow v. Donelson, 242 S.W.3d 570, 572 (Tex. App.—Waco 2007, no pet.) (“The trial court applies the rules of equity in determining the broad question of how property is to be partitioned”).

Proof is made to the fact finder at trial of the existence and value of improvements to the property at the time of partition and of other equitable considerations that may warrant awarding a particular portion of the property to one of the parties. Price v. Price, 394 S.W.2d 855, 858 (Tex. Civ. App.—Tyler 1965, writ ref’d n.r.e.). The general rule is that where improvements have been made upon the property sought to be partitioned, the improved portion will be allotted to the part owner who has made the improvements if this can be done without prejudice to the other owners. Id.
It is well-established that the trial court has the power during the initial stage of the partition proceeding to adjust all equities between the parties. Yturria, 921 S.W.2d at 342; see also Snow, 242 S.W.3d at 572 (“The trial court applies the rules of equity in determining the broad question of how property is to be partitioned.”).
 

SOURCE: CORPUS CHRISTI COURT OF APPEALS - 13-10-00490-CV – 12/1/11 

RELATED POSTS: Two-step in partition suit explained | suit for division of jointly-held real property real estate | Example of partition suit (appellate opinion) from Houston |

Venue for Real Estate Litigation: In which county are lawsuits involving disputes over land to be filed and litigated?

       
Where should disputes over land -- or interests in land -- be taken to  court? Does it depend on where the real estate is located, where the opposing party and/or owner lives or has its office, or on some other facts or circumstances? The CPRC has a rule on it.

    

VENUE FOR REAL ESTATE LITIGATION

   

Section 15.011 of the Texas Civil Practice and Remedies Code applies to: (1) actions for recovery of real property or for recovery of an estate or interest in real property; (2) actions for partition of real property, (3) actions to remove encumbrances from the title to real property; (4) actions for recovery of damages to real property; and (5) actions to quiet title to real property. TEX. CIV. PRAC. & REM. CODE ANN. § 15.011. Any of these specified types of actions must be brought in the county in which part or all of the property is located. Id.

 

MANDAMUS RELIEF AVAILABLE TO ENFORCE MANDATORY VENUE

  

A party may file a petition for writ of mandamus to enforce the mandatory venue provisions of chapter 15 of the Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 15.0642 (West 2002).

  

Under section 15.016 of the Texas Civil Practice and Remedies Code, an action governed by any other statute prescribing mandatory venue must be brought in the county required by that statute. See id. § 15.016 (West 2002).

  

Section 115.002 of the Texas Property Code is a mandatory venue statute, so it is enforceable by mandamus. See TEX. PROP. CODE ANN. § 115.002 (West 2007); TEX. CIV. PRAC. & REM. CODE ANN. §§ 15.016, 15.0642; In re Transcon. Realty Investors, 271 S.W.3d 270, 271 (Tex. 2008) (orig. proceeding); In re Tex. Dep’t of Transp., 218 S.W.3d 74, 76 (Tex. 2007) (orig. proceeding). In the case of mandatory venue, relators are not required to show that appeal is an inadequate remedy. In re Transcon. Realty Investors, 271 S.W.3d at 271.

SOURCE: CORPUS CHRISTI / EDINBURG COURT OF APPEALS - 13-11-00707-CV – 12/3/11

RELATED TERMS AND PHRASES: motion to transfer venue | determination of proper venue | mandatory and permissive venue | venue vs. contractual forum selection |  appellate review of venue rulings by the trial court |

Nature of Forcible Detainer Action (in Justice Court)

     
LIMITED NATURE OF SUIT FOR POSSESSION OF LEASED PREMISES ("EVICTION") IN JP COURT EXPLAINED  
 
In a forcible detainer action, the only issue the trial court determines is whether the party seeking to obtain possession is entitled to actual and immediate possession, and the merits of whether a party has title shall not be determined. See Tex. R. Civ. P. 746; Williams v. Bank of N.Y. Mellon, 315 S.W.3d 925, 927 (Tex. App.-Dallas 2010, no pet.); Black v. Wash. Mut. Bank, 318 S.W.3d 414, 416 (Tex. App.-Houston [1st Dist.] 2010, pet. dism'd w.o.j.).
     
A forcible detainer action is not exclusive, but cumulative of any other remedy that a party may have in the courts of this state. See Rice v. Pinney, 51 S.W.3d 705, 708 (Tex. App.-Dallas 2001, no pet.); Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 437 (Tex.App.-Houston [1st Dist.] 2007, no pet.). Thus, the displaced party is entitled to bring a separate suit in the district court to determine the question of title. Rice, 51 S.W.3d at 708; see also Williams, 315 S.W.3d at 927 (stating questions over whether a sale of property in a deed of trust is invalid "must be brought in a separate suit").
   
A justice court or county court at law is not deprived of jurisdiction merely by the existence of a title dispute; rather, it is deprived of jurisdiction only if "the right to immediate possession necessarily requires the resolution of a title dispute." Rice, 51 S.W.3d at 713 (citing Haith v. Drake, 596 S.W.2d 194, 196 (Tex. App.-Houston 

SOURCE: DALLAS COURT OF APPEALS - 05-10-01402-CV - 11/9/11