Summary
recognizing common law claim for equitable reimbursement when cotenant incurs expenses in the actual preservation of common property
Summary of this case from In re Estate of RaynesOpinion
No. 04-14-00667-CV
04-27-2016
Ramiro and Edna RAMOS, and Federico Salazar, Jr., Appellants v. THE UNKNOWN HEIRS OF TOMASA GONZALEZ, Deceased, and Narciso Gonzalez, Deceased, et al., Appellees
MEMORANDUM OPINION
From the 381st Judicial District Court, Starr County, Texas
Trial Court No. DC-09-559
Honorable J. Manuel Banales, Judge Presiding Opinion by: Rebeca C. Martinez, Justice Sitting: Rebeca C. Martinez, Justice Patricia O. Alvarez, Justice Luz Elena D. Chapa, Justice REVERSED AND REMANDED
Ramiro and Edna Ramos and Federico Salazar, Jr. appeal the trial court's judgment denying their claim for equitable reimbursement of expenses incurred for the benefit of the property at issue. We reverse and remand.
BACKGROUND
Tomasa Ramos de Gonzalez was the owner of a 154-acre parcel of real property located in Starr County, Texas, commonly referred to as "Share 7." Tomasa died intestate in May 1983 survived only by her husband, Narciso Gonzalez. Narciso died intestate one month later. Because the couple had no children, the property passed to their heirs at law. However, no administration of either estate was ever opened and record title to the property remains in Tomasa's name. Edna Ramos and Federico Salazar, Jr. are, respectively, the niece and nephew of Tomasa. In 1982, Tomasa and Narciso granted Edna and her husband, Ramiro Ramos, title to a one-acre tract of real property located within the bounds of Share 7. Since their aunt's and uncle's deaths, Edna and Ramiro, as well as Federico, have used and occupied Share 7 as their own. They claimed to have expended over $90,000 in payment of ad valorem taxes and maintenance and improvement to Share 7.
On December 16, 2009, appellants filed an Original Petition to Quiet Title against the unknown heirs of Tomasa and Narciso requesting declaratory relief and attorney's fees. Appellants further requested judgment for all amounts paid by them, plus pre-judgment interest, as well as an order of sale of the property. Alternatively, appellants requested that the trial court impose an equitable lien against the property for the value of taxes paid by them to discharge taxes owed on the property.
Appellants' Third Amended Original Petition was filed on September 24, 2012 and was the live pleading at the time judgment was signed. The Third Amended Original Petition requested relief under TEX. CIV. PRAC. & REM. CODE ANN. § 17.004 (West 2015) ("Suit Against Unknown Heirs or Unknown Stockholders of Defunct Corporation") and § 37.001, et. seq. (West 2015 and Supp. 2015) (Declaratory Judgments).
Defendants were cited by publication. After the citation by publication, numerous heirs of Tomasa and Narciso filed answers and various dilatory pleas. On March 30, 2010, the trial court ordered that appellants attempt to ascertain the identity and location of the heirs of Tomasa and Narciso who had not yet made an appearance. Eventually, 81 heirs were identified and those who had not yet made an appearance and could be located were personally served with process. Approximately 37 of the 81 individuals identified by the parties never made an appearance in the matter. On May 9, 2011, the trial court appointed two attorneys ad litem to represent the interests of the remaining unknown heirs of Tomasa and Narciso.
On August 11, 2014, the matter proceeded to final trial. At the conclusion of the two-day bench trial, the parties argued over whether appellants were required to satisfy the requirements of Chapter 29 of the Property Code before seeking reimbursement from their co-tenants for expenses they paid on behalf of Share 7. Chapter 29 is titled "Forced Sale of Owner's Interest in Certain Real Property as Reimbursement for Property Taxes Paid by Co-owner on Owner's Behalf." See TEX. PROP. CODE ANN. §§ 29.002-.003 (West 2014). Ultimately, the trial court signed "Findings and Judgment" denying all relief requested by appellants. Specifically, the trial court found that:
At trial, approximately 22 heirs appeared and announced ready through their attorneys of record. The other 59 known heirs wholly made default, including those represented by counsel. The attorneys ad litem for the unknown heirs also appeared and announced ready.
[A]lthough the Court finds that Plaintiffs did pay the ad valorem taxes, maintenance, and the preservation of the property as well as other expenses attached to the property, the Court does find that Plaintiffs failed to meet the requirements of 29.002(b) [of the Texas Property Code] by not pleading the interest held by each known owner of the property or the total amount the Plaintiffs paid for the Defendants' share of the taxes. The Court further finds that Plaintiffs also failed to meet the requirements of 29.003 [of the Texas Property Code] by failing to offer any evidence that, before they filed their petition, they had made a demand to the Defendants for reimbursement.The trial court went on to note that although appellants "contend that the provisions of Chapter 29 of the Property Code are not the exclusive procedural mechanism in an equitable cause of action for reimbursement by a co-tenant[,]" "most of the cases cited [by appellants] pre-date the enactment of Chapter 29 and its recent amendments. Indeed, Chapter 29 codified much of the common law and case law in this area, but with the addition of the demand for reimbursement requirements that Plaintiffs failed to follow." Thus, the trial court denied appellants' claim for reimbursement as well as their request for the forced sale of the property.
At trial, appellants also asserted an adverse possession claim. Appellants' counsel acknowledged that adverse possession was "the weaker" of their two claims. The trial court found that appellants failed to prove their adverse possession claim under any statute of limitations, and further found that their use and possession of Share 7 was by license and permission. Appellants do not challenge this finding on appeal.
On appeal, appellants assert: (1) the trial court erred in denying their equitable claim for reimbursement and equitable lien; (2) the trial court erred in holding that Texas Property Code section 29 is the exclusive procedural means by which a co-tenant may obtain reimbursement for sums expended for ad valorem taxes; (3) appellees failed to plead or assert failure of a condition precedent amounting to waiver of the issue and trial by consent; (4) appellants could not possibly comply with the requirements of Texas Property Code section 29.002(b)(3); (5) the trial court abused its discretion in denying appellants' default judgments against defaulting defendants; and (6) the trial court's judgment is defective because it omits seven individuals who made an appearance in the matter.
Appellants concede, however, that the judgment is final and not interlocutory despite the omissions. See North East Ind. Sch. Dist. v. Aldridge, 400 S.W.2d 893, 897 (Tex. 1966). --------
DISCUSSION
Appellants contend that the trial court erred in denying their equitable claim for reimbursement and equitable lien. At trial, evidence was presented showing that appellants expended approximately $67,000 in payment of property taxes, as well as approximately $11,000 to improve and maintain the property. In its judgment, the trial court found that "the evidence shows that Plaintiffs paid" "more than $81,873.82 for ad valorem taxes, maintenance, and the preservation of the property for over 31 years." However, the trial court went on to find that although appellants paid for the property taxes, maintenance of, and improvement to the property, their failure to comply with sections 29.002 and 29.003 of the Property Code precluded them from recovering from the non-paying co-tenants. Thus, appellants now argue that the trial court abused its discretion in applying Chapter 29 of the Property Code. See Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding) ("A trial court has no 'discretion' in determining what the law is or applying the law to the facts.").
A. Chapter 29: Forced Sale of Owner's Interest in Property as Reimbursement for Property Taxes Paid by Co-owner
Chapter 29 of the Property Code was enacted in 1995 and "applies only to real property that is not exempt from forced sale under the constitution or laws of this state and is received by a person as a result of death of another person by inheritance. . . ." TEX. PROP. CODE ANN. § 29.001 (West 2014). A person who owns an undivided interest in such real property may file a petition in district court for an order to require another owner of an undivided interest in that property to sell the other owner's interest in the property to the person if:
(1) the person has paid the other owner's share of ad valorem taxes imposed on the property for any three years in a five-year period . . . ; andTEX. PROP. CODE ANN. § 29.002(a)(1), (2) (West 2014) (emphasis added). The petition must contain: (1) a description of the property; (2) the name of each known owner of the property; (3) the interest held by each known owner of the property; (4) the total amount paid by the petitioner for the defendant's share of ad valorem taxes imposed on the property; and (5) if applicable, the amount paid by the defendant to the petitioner for paying the defendant's share of ad valorem taxes imposed on the property. Id. § 29.002(b). At a hearing on a petition filed under Section 29.002, the petitioner must prove by clear and convincing evidence that:
(2) the other owner has not reimbursed the person for more than half of the total amount paid by the person for the taxes on the owner's behalf.
(1) the petitioner has paid the defendant's share of ad valorem taxes imposed on the property that is the subject of the petition for any three years in a five-year period . . .;TEX. PROP. CODE ANN. § 29.003 (West 2014).
(2) before the date on which the petition was filed the petitioner made a demand that the defendant reimburse the petitioner for the amount of the defendant's share of ad valorem taxes imposed on the property paid by the petitioner; and
(3) the defendant has not reimbursed the petitioner more than half of the amount of money the petitioner paid on the defendant's behalf for the defendant's share of ad valorem taxes imposed on the property.
B. Common Law Claim for Reimbursement
The common law recognizes an action for equitable reimbursement. When two persons are co-tenants and one of them incurs expense in the improvement of the property which is necessary and beneficial, it is equitable that the one incurring the expense shall have contribution from his cotenant in an amount which is in proportion to the undivided interest owned by such cotenant. Wagner & Brown, Ltd v. Sheppard, 282 S.W.3d 419, 425 (Tex. 2008). A co-tenant who incurs expense for the necessary preservation of property is entitled to reimbursement from her co-tenant. Bailey-Mason v. Mason, 334 S.W.3d 39, 45 (Tex. App.—Dallas 2008, pet. denied); Wooley v. West, 391 S.W.2d 157, 160 (Tex. Civ. App.—Tyler 1965, writ ref'd n.r.e.). The duty to preserve common property rests on all of the tenants in common. Casso v. Fullerton, No. 04-05-00905-CV, 2006 WL 2612600, at *3 (Tex. App.—San Antonio Sept. 13, 2006, pet. denied) (mem. op.); Gonzalez v. Gonzalez, 552 S.W.2d 175, 181 (Tex. Civ. App.—Corpus Christi 1977, writ ref'd n.r.e.). Because the care, maintenance, upkeep, and preservation of the property rests upon the owners collectively, a co-tenant in real property, who incurs certain necessary expenses in the actual preservation of that property and the valuation thereof, is entitled to reimbursement from the other co-tenant. Poenisch v. Quarnstrom, 386 S.W.2d 594, 597-98 (Tex. Civ. App.—San Antonio 1965, writ ref'd n.r.e.); Gonzalez, 552 S.W.2d at 181.
C. Was Chapter 29 the Only Means of Recovery in This Case?
Under Texas law, in a situation where common law and a statute both provide remedies, the statutory remedy is cumulative of the common law remedy unless the statute expressly or impliedly negates or denies the right to the common law remedy. Holmans v. Transource Polymers, Inc., 914 S.W.2d 189, 192 (Tex. App.—Fort Worth 1995, writ denied); Navistar Int'l Transp. Corp. v. Crim Truck & Tractor Co., 791 S.W.2d 241, 245 (Tex. App.—Texarkana 1990), aff'd, 823 S.W.2d 591 (Tex. 1992). Here, Chapter 29 of the Property Code does not expressly provide that the statutory scheme for seeking reimbursement for property taxes paid by a co-owner is exclusive; therefore, if the statute is meant to be exclusive, it would be by implication only. "Abrogation by implication of a cause of action and remedy recognized at common law is disfavored and requires a clear repugnance between the common law and statutory causes of action." Holmans, 914 S.W.2d at 192 (quoting Coppedge v. Colonial Sav. & Loan Ass'n, 721 S.W.2d 933, 938 (Tex. App.—Dallas 1986, writ ref'd n.r.e.)). We do not believe that the legislature expressly declared or necessarily implied an intention to abrogate the common law remedy of reimbursement from a co-tenant. We conclude that the statutory action for reimbursement by means of forced sale of a co-tenant's interest in the property under Chapter 29 did not repeal the common law action, but instead provided a choice of remedies for a co-tenant who has incurred expenses in preserving a common property.
In the case before us, evidence was presented at trial in support of appellants' equitable reimbursement claim for monies expended on property taxes, maintenance of, and improvement to the property at issue. The trial court therefore erred in refusing to consider appellants' common law reimbursement claim and in holding that appellants were required to satisfy sections 29.002 and 29.003 of the Property Code. Not only does the statutory scheme not trump common law recovery, but the statute speaks only to reimbursement for payment of ad valorem property taxes. The statute does not address monies expended for maintenance of and improvement to the common property. Appellants sought reimbursement not only for payment of property taxes, but also for maintenance and improvement to Share 7. Thus, the trial court erred in refusing to consider appellants' common law claim for equitable reimbursement.
Because the trial court erred in holding that Chapter 29 is the exclusive means of recovering sums owed for ad valorem taxes by a co-tenant and in denying appellants' claim for reimbursement for monies expended on property taxes, maintenance of, and improvement to the property at issue, we sustain appellants' issues related to reimbursement. Given our disposition, we need not address appellants' remaining issues on appeal. See TEX. R. APP. P. 47.1.
CONCLUSION
The judgment of the trial court is reversed, and the case is remanded to the trial court for further proceedings.
Rebeca C. Martinez, Justice