Summary
holding plaintiff, as purchaser of property at foreclosure, had legal right to bring forcible detainer action against defendant pursuant to deed of trust provision authorizing purchaser at foreclosure to remove borrower from property
Summary of this case from Rodriguez v. VRMOpinion
No. 04-16-00137-CV
11-09-2016
Odis SPENCER, Appellant v. REOCO, INC., Appellee
MEMORANDUM OPINION
From the County Court at Law No. 10, Bexar County, Texas
Trial Court No. 2015-CV-06980
Honorable David J. Rodriguez, Judge Presiding Opinion by: Karen Angelini, Justice Sitting: Karen Angelini, Justice Marialyn Barnard, Justice Rebeca C. Martinez, Justice AFFIRMED
Odis Spencer appeals from a forcible detainer judgment awarding REOCO, Inc. possession of certain real property. In three issues, Spencer argues (1) REOCO did not have standing to bring a forcible detainer action; (2) the trial court could not determine the issue of possession to the property because REOCO failed to establish a landlord-tenant relationship; and (3) the issue of possession was so intertwined with the issue of title that the trial court was deprived of jurisdiction over the forcible detainer action. We affirm.
BACKGROUND
The real property ("the property") that is the subject of this forcible detainer action was Spencer's home.
In 2007, Spencer and his wife purchased the property with financing obtained from Texas Homestead Mortgage Company. The loan was secured by a note and a deed of trust executed by Spencer. The deed of trust provided that if the property was sold at foreclosure, the borrower or any person holding possession of the property through the borrower "shall immediately surrender possession of the Property to the purchaser at that sale. If possession is not surrendered, Borrower or such person shall be a tenant at sufferance and may be removed by writ of possession."
In 2012, EMC Mortgage LLC, who was the holder of the note and the deed of trust at the time, appointed substitute trustees to enforce the trust. On September 4, 2012, Everhome Mortgage Company purchased the property at a foreclosure sale, and the substitute trustees conveyed the property to Everhome Mortgage. In 2013, Everhome Mortgage conveyed the property by a deed without warranty to REOCO.
In October 2015, REOCO sent Spencer a notice to vacate the property. Spencer did not vacate the property. Thereafter, REOCO filed a forcible detainer action in the justice court. A trial was held and the justice court rendered judgment in favor of REOCO. Spencer appealed to the county court at law. In January 2016, the matter was tried de novo in the county court at law ("the trial court"). The trial court granted REOCO possession of the property. Spencer appealed to this court.
FORCIBLE DETAINER REQUIREMENTS
A forcible detainer action is a procedure to determine the right to immediate possession of real property. Dormandy v. Dinero Land & Cattle Co., L.C., 61 S.W.3d 555, 557 (Tex. App.—San Antonio 2001, pet. dism'd w.o.j.). It is intended to be a speedy, simple, and inexpensive means to regain possession of property. Salaymeh v. Plaza Centro, LLC, 264 S.W.3d 431, 437 (Tex. App.—Houston [14th Dist.] 2008, no pet.). The only issue in a forcible detainer action is the right to actual and immediate possession. Id. at 435. To prevail in a forcible detainer action, a plaintiff is not required to prove it has title to the property; rather, a plaintiff is only required to show sufficient evidence of ownership to demonstrate a superior right to immediate possession of the property. Id. "[A] forcible detainer only addresses who has the right to possess the property, not who has title to it." Pinnacle Premier Prop., Inc. v. Breton, 447 S.W.3d 558, 563 (Tex. App.—Houston [14th Dist.] 2014, no pet.).
A forcible detainer action is cumulative of other legal remedies. Salaymeh, 264 S.W.3d at 436. Therefore, a party may bring a separate suit in district court to determine title issues. Id. Defects with the purchaser's title to the property or in the foreclosure process may not be considered in a forcible detainer action. Schlichting v. Lehman Bros. Bank FSB, 346 S.W.3d 196, 199 (Tex. App.—Dallas 2011, pet. dism'd) (concluding that evidence challenging the plaintiff's validity of title or interest in the property was not material to any issue in a forcible detainer action).
To prevail and obtain possession in a forcible detainer action, a plaintiff must show: (1) the substitute trustee conveyed the property to the plaintiff after the foreclosure sale; (2) the deed of trust signed by the defendant established a landlord-tenant relationship between the plaintiff and the defendant; (3) the plaintiff gave proper notice to the defendant to vacate the premises; and (4) the defendant refused to vacate. U.S. Bank Nat'l Assoc. v. Freeney, 266 S.W.3d 623, 625 (Tex. App.—Dallas 2008, no pet.); see TEX. PROP. CODE ANN. §§ 24.002(a)(2),(b); 24.005 (West 2014 & West Supp. 2016).
STANDING
In his first issue, Spencer argues REOCO did not have standing to bring a forcible detainer action because certain evidence was not admitted at trial. Specifically, Spencer complains that there was no evidence admitted that REOCO's predecessor, EMC Mortgage, became the holder of the note and the deed of trust and had the power and authority to appoint the successor trustees who effectuated the foreclosure sale.
Standing requires a concrete injury to the plaintiff and a real controversy between the parties that will be resolved by the court. Heckman v. Williamson Co., 369 S.W.3d 137, 154 (Tex. 2012). A standing inquiry focuses on whether a party has a sufficient relationship with the lawsuit so as to have a justiciable interest in the outcome. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005). For a party to have standing, it must be properly situated to be entitled to a judicial determination. Id. at 849. A person has standing when he is personally aggrieved, regardless of whether he is acting with legal authority. Id. at 848.
In Texas, the test for standing parallels the federal test for Article III standing. Id. Under both Texas and federal law, standing requires that: (1) the plaintiff be personally injured—that is, it must plead facts demonstrating that it, rather than a third party or the public at large, suffered the injury; (2) the plaintiff's injury must be fairly traceable to the defendant's conduct; and (3) the plaintiff's injury is likely to be redressed by the requested relief. Heckman, 369 S.W.3d at 155. A standing inquiry requires a careful examination of the allegations in the petition to determine whether the particular plaintiff is entitled to an adjudication of the particular claims asserted. Id. at 156. Without standing, a court lacks subject matter jurisdiction to hear a case. Lovato, 171 S.W.3d at 849. When evaluating standing, courts consider the plaintiff's pleadings as well as evidence relevant to the jurisdictional inquiry. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000).
Spencer argues REOCO did not have standing to bring a forcible detainer action because "no documents were submitted as evidence that showed that EMC Mortgage was ever the holder of the Note and Deed of Trust" and "the only lender provided the power and authority to appoint a successor trustee was Texas Homestead Mortgage Company and not EMC Mortgage." Spencer maintains that to establish its standing to sue for forcible detainer, REOCO needed to present evidence showing that EMC Mortgage had the power or authority to appoint successor trustees. Spencer cites a single case to support his argument, Long v. NCNB-Texas Natn'l Bank, 882 S.W.2d 861 (Tex. App.—Corpus Christi 1994, no writ). But Long, which involved a suit to enforce a guaranty agreement and not a suit for forcible detainer, does not demonstrate that REOCO lacked standing to bring a forcible detainer action. In Long, the appellate court held that guarantors of a promissory note lacked standing to attack the validity of the notice to the borrowers in a foreclosure sale. Id. at 867-68.
To determine if REOCO was entitled to a judicial determination in a forcible detainer action, we must examine the pleadings and the evidence. In its petition, REOCO alleged that it was the owner of the property and that it, or its authorized servicing agent mortgage company, had acquired the property as a result of the foreclosure of a lien created by a deed of trust executed by Spencer. REOCO further alleged that the deed of trust provided that (1) if the property was purchased at a foreclosure sale, Spencer was required to immediately surrender possession of the property to the purchaser; and (2) if Spencer failed to surrender possession of the property, he would be a tenant at sufferance and could be removed by writ of possession. REOCO also alleged it had notified Spencer to vacate the property, but despite this notice Spencer continued to reside on the property and to exclude REOCO from the property. REOCO asked for a judgment awarding it possession of the property.
The trial evidence included: (1) the original deed of trust establishing Spencer's status as a tenant at sufferance; (2) the substitute trustee's deed evidencing the foreclosure sale of the property to Everhome; (3) the deed without warranty evidencing Everhome's subsequent conveyance of the property to REOCO; and (4) the notice to vacate which was sent to and received by Spencer. Of particular importance here are the deed of trust executed by Spencer which states that if the property was sold at foreclosure Spencer was required to "immediately surrender possession of the Property to the purchaser at that sale;" the substitute trustee's deed which shows that the property was purchased by Everhome Mortgage at a foreclosure sale on September 4, 2012; and the deed without warranty which shows that Everhome Mortgage conveyed the property to REOCO on April 10, 2013.
After considering REOCO's pleadings and the evidence, we reject Spencer's assertion that additional evidence was required to establish REOCO'S standing. Our examination of the pleadings and the evidence shows that all of the elements of the standing test were met. First, REOCO alleged it suffered the injury—Spencer failed to vacate REOCO's property after notice and excluded REOCO from the property. Second, the injury was fairly traceable to Spencer's conduct. Third, the injury was likely to be redressed by the relief REOCO requested from the trial court. We conclude REOCO had standing to bring a forcible detainer action. Spencer's first issue is overruled.
LANDLORD-TENANT RELATIONSHIP
In his second issue, Spencer argues REOCO failed to establish a landlord-tenant relationship between the parties. Spencer raises this issue to support his contention that the trial court exceeded its jurisdiction. See Rice v. Pinney, 51 S.W.3d 705, 712 n.4 (Tex. App.—Dallas, no pet.) (not addressing the issue of whether a landlord-tenant relationship was jurisdictional, but noting that one indication that a justice or county court may be required to adjudicate title to real property in a forcible detainer action and thereby exceed its jurisdiction is when a landlord-tenant relationship is lacking).
Spencer asserts that in attempting to establish the landlord-tenant relationship, REOCO relied on the substitute trustee's deed, which does not show that EMC Mortgage was the holder of the note and the original deed of trust. Spencer emphasizes that the documents admitted into evidence show that only the original lender, Texas Homestead Mortgage, had the power to appoint a substitute trustee. Spencer further argues that in the absence of a landlord-tenant relationship, the trial court could not have determined the issue of immediate possession without necessarily determining the issue of title.
Our review of the evidence leads us to conclude that REOCO established the existence of a landlord-tenant relationship between REOCO and Spencer. The original deed of trust was admitted into evidence. Executed by Spencer, the deed of trust stated that in the event the property was sold at foreclosure, "the Borrower or any person holding possession of the Property through Borrower shall immediately surrender possession of the Property to the purchaser at that sale" and "[i]f possession is not surrendered, Borrower or such person shall be a tenant at sufferance and may be removed by writ of possession." Evidence was also admitted showing the property was subsequently sold at a foreclosure sale and that REOCO acquired the property after the foreclosure sale. Spencer's second issue is overruled.
POSSESSION INTERTWINED WITH TITLE
In his third issue, Spencer argues that because he filed an action to challenge title in the district court, the county court at law was deprived of jurisdiction over the forcible detainer action. Although the record before us does not reveal the precise nature of Spencer's title challenge in the district court, his briefing suggests the challenge involved the validity of the foreclosure.
"A justice court or county court at law is not deprived of jurisdiction in a forcible detainer action merely because of the existence of a title dispute." Reynoso v. Loft Concepts, Inc., No. 04-15-00267-CV, 2016 WL 3030946, at *1 (Tex. App.—San Antonio 2016, no pet.). Only when the right to immediate possession necessarily requires resolution of a title dispute is a justice court or county court at law deprived of jurisdiction. Salaymeh, 264 S.W.3d at 435. In other words, for the justice court or the county court at law to be deprived of jurisdiction, the resolution of the title dispute must be a prerequisite to the determination of the right to immediate possession. Id.
This court and other courts have held that when a deed of trust establishes a landlord and tenant at sufferance relationship between the parties, an independent basis exists to determine the issue of immediate possession without resolving the issue of title to the property. Reynoso, 2016 WL 3030946, at *2 ("[B]ased upon the tenant-at-sufferance clause in the deed of trust, there was an independent basis for the trial court to determine that [the purchaser] had the right to immediate possession without resolving whether the foreclosure was proper."); Shaver v. Wells Fargo Bank, N.A., No. 14-13-00585-CV, 2014 WL 3002414, at *2 (Tex. App.—Houston [14th Dist.] 2014, pet. struck) ("[W]e repeatedly have held that where the deed contains a tenant-at-sufferance clause such as the one here, the issue of possession is not intertwined with the issue of title, and the right to immediate possession can be decided regardless of whether there is an outstanding title dispute."); Maxwell v. U.S. Bank Nat'l Assoc., No. 14-12-00209-CV, 2013 WL 3580621, at *2-3 (Tex. App.—Houston [14th Dist.] 2013, pet. dism'd w.o.j.) (concluding that the tenant at sufferance clause in the deed of trust separated the issue of possession from the issue of title, regardless of any alleged defects in the foreclosure sale).
Here, the original deed of trust, the substitute trustee's deed (showing the property was purchased by Everhome Mortgage at a foreclosure sale), and the deed without warranty (showing REOCO acquired the property from Everhome Mortgage), established the existence of a landlord-tenant relationship between REOCO and Spencer. Therefore, an independent basis existed for determining the issue of possession of the property without resolving the issue of title to the property. See Reynoso, 2016 WL 3030946, at *2; Shaver, 2014 WL 3002414, at *2; Maxwell, 2013 WL 3580621, at *2-3. We conclude the trial court was not deprived of jurisdiction over the forcible detainer action. Spencer's third issue is overruled.
CONCLUSION
The judgment of the trial court is affirmed.
Karen Angelini, Justice