Opinion
No. 10-21-00173-CV
03-15-2023
PHARUS FUNDING, LLC as Assignee of LHR, Inc., Appellant v. Jerry SOLLEY and Lola M. Solley, Appellees
Attorney for Appellant/Relator: Jody D. Jenkins, Jenkins & Young PC, Lubbock, TX Jerry Solley, Pro Se. Lola M. Solley, Pro Se.
Attorney for Appellant/Relator: Jody D. Jenkins, Jenkins & Young PC, Lubbock, TX
Jerry Solley, Pro Se.
Lola M. Solley, Pro Se.
Before Chief Justice Gray, Justice Johnson, and Justice Smith
(Chief Justice Gray dissents.)
MATT JOHNSON, Justice
Pharus Funding, LLC (Pharus), as assignee of LHR, Inc., (LHR) brings this appeal from the trial court's denial of its application to revive a dormant judgment against Jerry and Lola Solley (the Solleys). We will vacate the trial court's order and dismiss the application. Procedural and Factual Background
The trial court awarded LHR a default judgment against the Solleys on April 22, 2009. The judgment was not renewed by execution or other means and became dormant. In June of 2020, Pharus filed a notice of change of ownership and designation of lead counsel that had two documents attached. The first document, titled "Assignment," was an agreement between LHR and Millennium Financial Group, LLC (Millennium) for the transfer of "accounts receivable" from LHR to Millennium. The second document, titled "Transfer and Assignment," was an agreement between Millennium and Pharus for the transfer of "accounts" from Millennium to Pharus. On July 16, 2020, Pharus filed its application to revive the judgment that sought a writ of scire facias or an order reviving the judgment. The trial court conducted a brief hearing on September 23, 2020 and denied Pharus’ application. Pharus’ attorney was present via video link at the hearing, and the Solleys did not appear even though Pharus’ attorney certified the Solleys had been given notice of the hearing via certified mail.
Issue
On appeal Pharus contends the trial court erred in denying Pharus’ application for Writ of Scire Facias to revive a dormant judgment.
AUTHORITY
"If a writ of execution is not issued within 10 years after the rendition of a judgment ... the judgment is dormant and execution may not be issued on the judgment unless it is revived." TEX. CIV. PRAC. & REM. CODE ANN. § 34.001. "A dormant judgment may be revived by scire facias or by an action of debt brought not later than the second anniversary of the date that the judgment becomes dormant." TEX. CIV. PRAC. & REM. CODE ANN. § 31.006. "In deciding whether a judgment should be revived, the trial court is without discretion to revive a judgment if the statutory requirements are satisfied." McShane v. McShane , 556 S.W.3d 436, 441 (Tex. App.—Houston [1st Dist.] 2018, pet. denied) (quoting Webb v. Yorkshire W. Capital, Inc. , No. 05-16-00390-CV, 2017 WL 677825, at *2 (Tex. App.—Dallas Feb. 21, 2017, pet. denied) (mem. op.) ). "A scire facias proceeding is normally ‘a non-evidentiary hearing for which there is no need for findings of fact and conclusions of law.’ " Id. (quoting Cadle Co. v. Rollins , No. 01-09-00165-CV, 2010 WL 670561, at *2 (Tex. App.—Houston [1st Dist.] Feb. 25, 2010, no pet.) (mem. op.) ). A trial court when deciding whether to grant a scire facias considers: (1) the date of the judgment, (2) evidence of any writs of execution issued on the judgment, and (3) the date of the scire facia application to revive. Harper v. Spencer & Assoc.’s, P.C. , 446 S.W.3d 53, 56 (Tex. App.—Houston [1st Dist.] 2014, pet. denied).
DISCUSSION
During the hearing conducted in the trial court, Pharus’ attorney requested "that the court issue a writ of scire facias that can be served on the defendants to revive the judgment." The trial court denied Pharus’ requested relief. Before ruling, the trial court noted Pharus’ allegation of ownership of the judgment in its application but commented that no document reflected that Pharus actually owned the judgment.
The documents Pharus attached as exhibits to its notice of change of ownership and designation of lead counsel reflect transfers of accounts from LHR to Millennium and from Millennium to Pharus. The first document recites that LHR "hereby sells, transfers, assigns to [Millennium] all of its rights, title, and interests, not otherwise retained in the court's order, in the accounts receivable more particularly described and set forth in Exhibit A." The record before us does not include an attached exhibit to the first transfer document. The second document recites that Millennium "hereby absolutely transfers, assigns, sets-over and conveys to [Pharus] ... all of Assignors’ right, title and interest in and to each of the Accounts identified in the Account Schedule attached hereto as Exhibit A...." The record before us does not include an attached exhibit to the second document. Furthermore, neither of the documents refer to the judgment which Pharus seeks to revive.
The First and Seventh Courts of Appeals have reviewed a question of ownership of a judgment in a scire facias proceeding as a question of standing. See Vackar v. Mem'l Bank , No. 01-00-01033-CV, 2002 WL 1303424, at *1 (Tex. App.—Houston [1st Dist.] June 13, 2002, no pet.) ; Cadles of Grassy Meadow, II, LLC v. Herbert , No. 07-09-00190-CV, 2010 WL 1705307, at *2 (Tex. App.—Amarillo Apr. 27, 2010, no pet.) (mem. op).
"Standing is implicit in the concept of subject matter jurisdiction." Tex. Ass'n of Bus. v. Tex. Air Control Bd. , 852 S.W.2d 440, 443 (Tex. 1993). "Because standing is a component of subject[-]matter jurisdiction, we consider [standing issues] as we would a plea to the jurisdiction." Vernco Constr., Inc. v. Nelson , 460 S.W.3d 145, 149 (Tex. 2015) (internal quotes omitted). "[A] court deciding a plea to the jurisdiction is not required to look solely to the pleadings but may consider evidence and must do so when necessary to resolve the jurisdictional issues." Id. (internal quotes omitted). Because subject matter jurisdiction is essential to the authority of a court to decide a case, it is never presumed and cannot be waived. Tex. Ass'n of Bus. , 852 S.W.2d at 443-44. Questions of standing are subject to de novo review. Farmers Tex. Cnty. Mut. Ins. Co. v. Beasley , 598 S.W.3d 237, 240 (Tex. 2020). To establish standing, a person must show a personal stake in the controversy. The M.D. Anderson Cancer Ctr. v. Novak , 52 S.W.3d 704, 707-08 (Tex. 2001) (citing In the Interest of B.I.V. , 923 S.W.2d 573, 574 (Tex. 1996) )
The trial court's order denying the application to revive recites that the trial court considered the "pleadings, arguments and applicable authority" before finding that the requested relief should be denied. The trial court's comment that no document reflected that Pharus actually owned the judgment is significant because it indicates the trial court reviewed and considered the court's file along with the two documents attached to Pharus’ notice of change of ownership when denying Pharus’ application. Furthermore, the two documents provided by Pharus do not make reference to a judgment, much less the judgment in this cause by style, cause number, or name of debtor.
Conclusion
We conclude, after our review of the record, that Pharus failed to affirmatively demonstrate its standing which deprived the court of subject-matter jurisdiction.
We vacate the trial court's order denying the application to revive a dormant judgment and dismiss the application for want of jurisdiction.
(Chief Justice Gray dissents.)
DISSENTING OPINION
TOM GRAY, Chief Justice
Standing causes us to fall down again.
This case is about revival. Not the kind of revival that I went to as a child growing up in an Assembly of God church. Not the kind of revival referred to in architecture. But, like those, this is the kind of revival where that which appears to be dead is brought back to life. In this particular instance, it is a dormant judgment that Pharus wants to revive.
The Court has determined that Pharus does not have standing to seek revival of the judgment; so, it sua sponte vacates "the trial court's order denying the application to revive a dormant judgment and dismiss[es] the application for want of jurisdiction." With that determination, I strongly disagree.
This raises the question of whether Pharus is entitled to notice of the Court's intent to involuntarily dismiss the appeal. See Tex. R. App. P. 42.3(a).
Revival of a dormant judgment would seem pretty simple. The Court cites the statutes and some of the case law, so there is no need to repeat that here. But the Court gets tripped up, stumbles, and falls on whether Pharus has standing. Actually, the fall is caused by whether Pharus has to, at this preliminary stage of the proceeding, prove it has standing, in essence, conclusively prove that it owns the judgment. At this stage of the proceeding, it does not. The allegation of ownership, until properly challenged, is sufficient to confer standing. Capacity to recover as an assignee, which was not challenged in this proceeding, is not in issue.
The Court references the relevant allegations, so I will not repeat them. But it is necessary to summarize the procedure that got us to this point. The Solleys defaulted on payment of their debt. The creditor sued the Solleys. The Solleys did not appear and answer when sued on the debt. A default judgment was rendered against the Solleys. The judgment went dormant. Pharus, alleging it now owns the judgment, moved to revive the judgment, seeking as the first step in that process the issuance of a writ of scire facias. The Solleys, served only pursuant to Rule 21a, did not appear at the hearing on whether to issue the writ. The trial court denied the motion to issue a writ of scire facias. Pharus appealed. The appeal was transferred. The Sixth Court of appeals held there was no final judgment and dismissed the appeal. The dismissal of the appeal left the issue pending in the trial court. The trial court did not then dismiss the motion due to the lack of jurisdiction; rather, it ordered "that Plaintiff's Application to Revive Judgment is denied." Pharus again appealed. The Tenth Court now finds Pharus does not have standing, vacates the trial court's order, and dismisses the application for want of jurisdiction. Even if the trial court did not have jurisdiction, we have jurisdiction to review the trial court's denial of the motion to revive the judgment by refusing to take the first step in the scire facias process. That first step, which was denied, is to issue a writ of scire facias. The writ would be personally served on the Solleys so that the Solleys will again be personally served and have the opportunity to appear and show some valid reason the judgment for their debt should not be revived.
The Sixth Court of Appeals wrote an excellent opinion that gives a fairly comprehensive discussion of the procedure applicable to revive a dormant judgment. Pharus Funding, LLC v. Solley , No. 06-20-00090-CV, 2021 WL 1680206, 2021 Tex. App. LEXIS 3246 (Tex. App.—Texarkana Apr. 29, 2021, no pet.) (mem. op.). The opinion is a much needed guide to walk a litigant and trial court through the process which is designed to protect the debtor from the very procedural due process pitfall that the trial court and this Court seem to be trying to avoid. But in an effort to avoid one due process violation, both courts seem to have taken it upon themselves to protect the absent debtor while ignoring the rights of the creditor and thus, may be committing another due process violation. As explained by the Sixth Court of Appeals’ opinion, in this proceeding, the motion to issue the writ of scire facias is a preliminary procedure, and the writ of scire facias should issue upon the appropriate allegations. A contested evidentiary hearing may be necessary if the debtor appears after being served with the writ of scire facias, asserting a defense to revival, such as payment. It seems that since the current proceeding in the trial court is occurring in the same proceeding in which the trial court's judgment was rendered, signed, and entered and is, in essence, a motion to enforce the trial court's judgment, that everything necessary to support the issuance of the writ is referenced in the motion. But if the judgment is necessary, it is also present in the trial court clerk's record.
The Court faults Pharus for having failed at this stage of the proceeding to provide documentation to prove it owned the judgment. This was not a summary judgment proceeding. This was not a motion to dismiss a baseless claim under Rule 91a. This was not even a plea to the jurisdiction. Nor is this an appeal asserting the trial court had no jurisdiction. To assert a sufficient interest to proceed on the motion, all Pharus had to do is to allege it owned the judgment. It did that. Pharus has standing. Anything beyond that might go to the merits but not to standing. Not to jurisdiction. See Tex. Med. Res., LLP v. Molina Healthcare of Tex., Inc. , 659 S.W.3d 424 (Tex. 2023).
This Court appears to be conflating the issuance of the writ of scire facias with the order reviving a dormant judgment. See footnote 3 in Pharus Funding, LLC v. Solley , No. 06-20-00090-CV, 2021 WL 1680206, 2021 Tex. App. LEXIS 3246 (Tex. App.—Texarkana Apr. 29, 2021, no pet.) (mem. op.).
Based on the foregoing analysis, I strongly disagree that this appeal should be dismissed for want of jurisdiction. Moreover, I can find no basis upon which the trial court should have declined to issue the writ of scire facias so that the Solleys could then be personally served with the writ and thereafter, if they so choose, to join issue on the question of whether the judgment can properly be revived.
This result is contrary to the prior discussion in this proceeding by the Sixth Court of Appeals. Id.