### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 8 -00 653 -CV

M e lod y St r aus s , A ppe lla nt

v. RobertBelt , Appellee

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 201S T JUDICIAL DISTRICT NO. D-1- GV-86- 4063 28 , HO NORAB LE JO HN K . DIETZ , JUDGE PRESIDI NG

O P I N I O N Melody S t ra u s s sold property that she owne d to J oseph Gitlin in 1985. I n 2001,

v ar io u s taxin g e n ti ti e s f

il e d s u it a g a in s t Str a

u s s an d G it li n f

o r b a c k taxe s th a t w e r e o w e d o nthe proper ty . Specifica lly , the entities soug ht back taxes for y ear s 1984 to 2001. I n M ay 2 002, the district court ente red a

j u d gm en t holding Strauss liable for the taxes owed for

1984 and 1985 and ho ldi ngGi tli n li a

ble fo r t he re ma ini ng ta xes. Th e jud g me nt a lso sp e c if ie d that the pr op e rt

y wa s to be sold at a ta x -for eclosure sale. See Tex. Tax Cod e Ann. § 34.01 (West 2008) (setting out require ments for tax sales). The sale wa s scheduled f or Oc tober 2007. A little less than two weeks be fore t h e s ale, Robert Be lt paid Gitlin $1,000 for a quitclaim deed to the pr operty

. Although B elt obtained the de ed, he did not pay any of the de lin qu e nt t a xes. Th e pro pert y wa s so ld at a

uc tio n, and

the sa le re su lte d in

$2 0, 30 0. 76 in e xce ss pr oc e e ds . A ft e r t

he sa le , a he ari ngwa s h e ld t o de te rm ine wh o wa s ent itl e d to th e e xce ss p ro c e e ds

. Duri ngthe he ari ng , Stra

us s and B e lt both co nte nd e d th a t th e y we re e nti tle d to the e xce ss p ro c e e ds

.2

At the c on c lus ion

of the he ari ng , th e dis tr ic t c ourt awa rd e d th e e xce ss p ro c e e ds to B e lt. Str a us s appea ls the district court’s judg ment. We will affirm the judg ment of the district cour t.

STATUT ORY F RAMEWORK The issues ra ised in this case a ll relate to various portions of section 34.04 of the tax code. See Tex. T ax C o d e Ann. § 34.04 ( West S upp. 2009). That pr ovision addresses w ho may

rec over excess proce eds fr om a tax-forec losure sale

. Id. § 34.04(a) (stating that person may “file a petition in the court that order ed the se izure or sale se tting for th a claim t o t he excess proc eeds” ). I n addition, the provision provides a hiera rchic al list of claimants to whom excess proce eds may be paid. Id. § 34.04(c) (allowing rec overy “to ea ch par

ty that establis h es its claim to the procee ds”). Some time afte r this a

ppeal was filed, section 34.04 was amende d by the leg islature. See Act of May 14, 2009, 81st L eg ., R.S., ch. 254, § 2, 2009 Tex. Ge n. L aws 6 9 8 , 699-700 (ame nding se ction 34.04). Many of the c hang es we re mi n o r, but subsection 34.04(c) was substantively

modified. Id. F or

that r e a so n, we w ill c ite to t he ve rs ion

of su bs e c tio n 3 4. 04 (c ) i n eff ect at the time of

the proc eeds he aring , Act of Ma y 28, 2003, 78th L eg ., R.S., ch. 319, § 10, 2003 Tex. Gen. L aws 1350, 1355 (“ former § 34.04(c) ”), but will ref

er to the c urre nt versions of the other provisions as neede d. At the time of the proce eds hear ing, former subsection 34.04(c) specifie d that the cour t may awa

rd excess proc eeds to “ eac h former owner of the prope rty , as the intere st of eac h may appea r.” Id. Section 34.04 also authorizes a former owne r to assig n his rights to excess proc eeds afte r a ta x -for eclosure sale ha s occur red. Te x . Tax Code Ann. § 34.04(f) -(h)

. Under that provision, an individual can pur chase a for mer owner’s right to the ex cess procee ds. Due to the possibility that these a ssignments c ould potentially be used to take advanta g e of proper ty owner s, the assig nmentAs a preliminary matter, we note t hat i n her briefs S trauss does not argue that the pr ocee ds 1 should have be en aw arde d to her. Althoug h she re peate dly asser ts that Belt is n o t en t i t l ed to the pr oc e e ds , s he do e s n ot a sse rt that sh e is e nti tle d to the m. G ive n th a t Str a us s r e lin qu ish e d o wn e rs hip of the prope rty

over twe nty

y ear s ag o and g iven that Gitlin owne d the prope rty immediately

befor e Be lt, it is not entirely clea r that Strauss would have any claim to the excess proc ee d s ev en i f t he dis tr ic t c ourt ’s de c isi on

we re re ve rs e d. F or

thi s r e a so n, B e lt a

rgue s o n a

ppeal th at S tr a

us s is attempting to make ar g uments on behalf of Gitlin, which Be lt insi sts St rauss doe s not have standing to make. Howe ver, Strauss wa s named a s a def endant in the suit forming the basis for this appe al an d wa s h el d l i ab l e fo r u np ai d t ax es . I n ad d i t i o n , t h e cau s e nu mb er fo r t h e e x ce s s -p ro ce ed s h ea ri n gs is the same as the cause number for t h e t ax -for eclosure proce eding s initi ated by various taxing e nti tie s a g a ins t Str a

us s and Gi tli n. F or

the se re a so ns , th e re c or d do e s no t de mon str a te tha t Str a us s does not have standing to challeng e the district cour t’s deter minations. See W

oodside Assur., Inc. v. N.K. Res., Inc

. , 175 S.W .3d 421, 425-26 (Te x . Ap p.—Houston [1s t Dist.] 2005, no pet.) 3 provisions set out certa in criteria that must be met befor e a n as s i gn ment will be deeme d valid, including requiring the assig nee to w ait until af ter the proce eds have be en deposited into the c ourt

re g istry be fo re e xec uti ngan a ssi g nme nt and requ ir ingthe a ssi g ne e to i nf or m th e fo rm e r o wn e r i n writing how much excess proc eeds wer e re cover ed fr om the tax s ale. Id. § 34.04(f) . I f the statutory require ments are not complied with, the assig nee ha s t o p ay t h e assi g nor the full amount of the excess proce eds “plus attorne y ’s fe es and e x penses.” Id. § 34.04(g ).

DI SCU SSIO N On a pp e a l, S tr a

us s r a ise s se ve ra l r e late d a nd ov e rl a pp ingiss ue s. Al tho ug h Stra us s lists four issues in her openingbrief and li sts some other issues in her r eply brief, she makes two main contentions. First, she a rg ues that the district cour t’s judgme nt is im proper

beca use the

manner in whi ch Be l t o b t ained the pr operty constituted a “de fac to assignme nt of proce eds” a nd beca use B elt did not comply

with the tax code require ments for the assig nment of proce eds. Second, she asse rts that the di s t rict cour t’s judgme nt is inconsist ent with the leg islature’s intent to protec t ho me ow ne rs fr om u

ns c ru pu lou s b us ine ss p ra c tic e s. We w ill or g anize th is op ini on aro un d th os e

ma in c on te nti on s. 1(a dd

re ssi nga pp e lla nt’ s argume nts a s to why fo rm e r o wn e r ( a

pp e lle e ) s ho uld

no t re ta in e xce ss proce eds eve n though a

ppellant had no r ight to cla im ex cess pr ocee ds). Be lt also contends that Strauss has “pr esente d this Court with nothing of which to re view 2 or dispose” be cause she has not ide ntified or ar g ued “points of e rror committed by

the trial cour

t.” Although Stra

uss does not set out in her briefs specific errors that we re a lleg edly committed by

the district c ourt, the foundation of her appellate arguments is her asse rtion that the g overningstatutes do no t a uth or ize the re c ov e ry

of e xce ss pr oc e e ds in the c ir c ums tanc e s p re se nt i n th is c a se . B e c a us e issues of st atutory construction ar e re viewed de novo on appea l, see City of San Antonio v. City of Boerne , 111 S.W .3d 22, 25 (Tex. 2003), we c annot agree with Be lt’s contention that Strauss “has neither c laimed nor pre sented any [appellate] points for review.” Moreove r, when courts dete rmine that a n a pp e lla nt ha s fa ile d to a de qu a te ly br ie f an iss ue be c a us e he fa ile d to ide nti fy

e rr or s a lle g e dly committed by

the trial cour

t, the courts often also conclude that the appe llant has waive d any alleg ed err o r by failing to refe r to any

supporting le g al authority or to the appe llate re cord. See, e .g. , Lee-way Prince Enters., LLC v. Qai Assur., Inc. , N o . 0 1

- 0 7

- 0 1 0 0 4

- C V , 2 0 0 9 T e x . A p p . LE X IS 83 72 , a t *1 2 ( Te x. Ap p. —H ou sto n [1s t D ist .] O c t. 2 9 2 00 9, no pe t.) (m e m. o p. ); Canton-Carter v. B a y lo r Co ll

. o f M e d. , 271 S.W .3d 928, 930-32 (Te x . App.—Houston [14th Dis t.] 2008, no pet.); Col so n v. PNB Tru st & As se t M gm t. , No. 07-04-0116- CV, 2004 Tex. App. L EXI S 9571, at *3 n.2 (T e x. Ap p. —A mari llo Oc t. 2 8, 20 04 , n o p e t.) (m e m. o p. ). I n this c a se , how e ve r, Str a us s re fe rs to various leg al authorities and to the appellate rec ord in support of her c ontention that Be lt should not have be en aw arde d the proc eeds. 4

Be cause the issues prese nted in this c ase perta in to the district court’s c onstruction of the g overningstatutes, we r eview the issues de novo. City of San Antonio v. Ci ty of Bo er ne , 111 S.W .3d 22, 25 (Tex. 2003). I n construing a st atute, appellate courts try to deter mine and g ive eff ect to the leg islature’s intent. S ta tev . G o n zalez , 82 S.W .3d 322, 327 (Tex. 2002). When perf orming this task, we look to the plain meaningof the wor ds used, City of San A nto nio , 111 S.W .3d at 25, and “ rea d the statute as a whole to g ive ef

fec t to every

part,” Gonzalez , 82 S.W .3d at 327. 2

De F ac to As sig nm e nt

I n he r fi rs t c ha lle ng e to t

he dis tr ic t c ourt ’s jud g me nt, Str a us s c on te nd s th a t be c a

us e Be lt’s “ true g oal” in obtaining the dee d was “ an assig nment of the e x cess pr ocee ds,” he should have ha d to c omp ly

wi th t he a ssi g nme nt r e qu ir e me nts lis te d in su bs e c tio n 3 4. 04 (f

). I n o the r w or ds ,5

Str a us s a sse rt s th a t by

ob ta ini ng a qu itc la im de e d sh or tly be fo re the sa le , B e lt ob ta ine d a “ de fa c to

a ssi g nme nt of e xce ss pr oc e e ds ” ins te a d of a tr ans fe r of pr op e rt y . B e c a us e B e lt d id n ot c omp ly

wi th the a ssi g nme nt re qu ir e me nts , Stra us s insi sts that Be lt ha d no leg iti mate c la im to the e xce ss p ro c e e ds

. Strauss bases he r cla im reg ardingBe lt’s true g oal on her assertions that B elt knew the pr operty was “subjec t to a t ax fo re clos ure judg ment,” wa s awa re that there w as “a

n impending ta x fore closure sale,” made “ no eff

ort t o pay

the taxes or delay

the sale,” and made no attempt to rede em the proper ty af t er the fore closure sa le. See Tex. Tax Code Ann. § 34.21(e )(1) (West Supp. 2009) (desc ribing proce dure in whic h former owner of prope rty

s o l d at t ax sale may

rec laim property

). Alternatively , Strauss asser ts that Belt wa ived any

owner ship rights to the e x cess pr ocee ds by failing to demonstrate a

ny “intere st in protecting or maintaining the prope rty .” Our sister c ourt fac ed similar is s u es in W oodside Assur., Inc. v . N.K. Res., Inc. , 175 S.W .3d 421 (Tex. App.—Houston [1s t Dist.] 2005, no pet.). In that case , N.K. Resourc es (“N KR”) pur chase d proper ty from L loy d Gibbs after a final judgme nt ha d been issued order ing that the pr o p er t y b e s o l d at auc tion. Id. at 423. The sa le occ urre d three day s befor e the f orec losure auction. Id. After

the sale, N KR applied for th e ex ce s s p roceeds, and the trial court r elea sed the proce eds to NKR. Id. On appe al, the appe llant, Woods ide Assura nce I nc. (“ Woodsi de”) , argued that it had acquir ed an inter est in the proper ty and wa s entitled to the proce eds. Id. Mo re imp or tantl y to th e p re s ent case, Woodside also insist ed that NKR should not have be en aw arde d the proc eeds beca use it “manipulated the tax foreclosure proce ss by purcha sing the proper ty three day s befor e the auction” a nd beca use its “ac tions allowed it to by pass the re quirements” pe rtaining to the assig nment of excess proc eeds. Id. at 426-27. When resolvingthese issues, the a ppellate c ourt noted thatI n her briefs, Strauss insists that the re asoning in W oodside is i na

pp lic a ble to t he fa c ts i n 3 this c ase. That case , like this one , involved a transfe r of owner ship after a for eclosure auction wa s sc he du le d b ut b e fo re t

h e a u c t i o n o c c ur

re d. I n p art ic ula

r, NK R ( a c or po ra tio n) purc ha se d th e pr op e rt y at issue in W

oodside prior to the fore closure auction. Although that court conclude d that NKR was entitled to the proce eds, Strauss asser ts that the holding in W

oodside sh ou ld n ot b e a

pp lie d to thi s case beca use unlike the c urre nt case , in W oodside a co- owner

of NKR also bid on and purc hased the proper ty during the auc tion. See W oodside Assur., Inc. , 175 S.W .3d at 423. I n light of the fac t that neither B elt nor one of

his busines s p ar t n er s b i d on or purc hased the proper ty during the auc tion, Straus s con ten ds tha

t W oodside is d ist inguis ha

ble and c ann ot s up po rt

a de te rm inatio n th a t B e lt i s entitled to the proce eds. Strauss also urg es that the re asoning in W o o d s ide s h o uld not be adopted b y t his Court because the cour t in W oodside d id

n o t c o n s id e r

th e le g is latu

r e ’ s in te n t t o p r o tect ho me ow ne rs fr om e xploi tativ e pr a c tic e s. Whil e it is tru e that the re we re so me dif fe re nc e s b e tw e e n th e fa c ts i n th is c a se and tho se in W oodside , n on e of

the m me anin g fu lly

dis tin g uis h th is c a se fr om W oodside . We can find no rea son to c on c lud e that th e fa ilure by B e lt o r o ne of

his bu sin e ss p art

ne rs to b id o n o r p ur c ha se the pr op e rt y a t is su e duri ngthe a

uc tio n sh ou ld r e nd e r t

he re a so nin g and

ho ldi ngfr om W

oodside ina

pp lic a ble to this case. Nothin g i n the g overningstatutes require d a for mer owne r to bid on or purc hase the pr op e rt y a t a uc tio n b e fo re he be c a me e lig ibl e to a ny e xce ss p ro c e e ds ob ta ine d d ue to the fo rc e d s a le of t he property . Moreove r, as will be discusse d more thoroug hly in the next i ssue, the statute at issue evince d a public policy

interest in protec ting pr operty owner s from malicious assig nment prac tices o cc u rr i n g afte r a fo re c los ur e sa le ; ho we ve r, the statut e did no t sp e a k to po te nti all y pro bl ematic prac tices that mig ht occur before a sa le bu t a ft e r a jud g me nt ha s b e e n e nte re d o rd e ri ngpr op e rt y to be sol d a t a u c ti o n . A c c o r d in g ly , th e a b s e n c e o f a d is c u s s io na

b o u t a le g is lati v e in te n t t o p r o te ct homeowner s in the W

oodside op ini on do e s not re nd e r t he c a se ina

pp lic a ble to t he re so lut ion

of thi s case . 6 no thi ng in the fo rm e r ta x c od e pr ov isi on “ pr e ve nts a thi rd pa rt y fr om buying the su

bje ct p rope rt

y prior to the fore closure sale.” Id. Mo re ov e r, a lth ou g h th e c ourt c on c lud e d th a t “ NK

R’ s p ur c ha se of the pr op e rt

y be fo re fo re c los ur e a llo we d it to av oid ” the re str ic tio ns a pp lic a ble to t he a ssi g nme nts of proc eeds “ afte r for eclosure ,” the c ourt noted that it c ould f ind no “ authority

that prec luded NKR from purc hasing the prop er t y , o r the owner from selling the prope rty , prior to the imminent fore closure.” Id. at 427.

We ag ree with the court in W oodside

. Although Strauss char acte rizes Be lt’s actions

3 as a de fac to assignme nt of excess proce eds af ter a fore closure sa le, it was not an a ssignm en t of7

proce eds. Rather, this case involved a transfe r of owne rship interests prior to a fore closure sa le. See N.K

. Re s. , In c . v . Sh e ldo n Rd

. M un . U til . D ist

. , No. 01-04-00261- CV, 2005 Tex. App. L EXI S 3604, at *4 (Te x . App.—Houston [1st Dist.] May 12, 2005, pet. denied) (mem. op.) ( explaining that subsection 34.04(f) “is applicable only to an assignment of e x cess f orec losure proc eeds g iven after the tax foreclosure sale by one who was the owner of the prope rty -to-be- fore closed at the time of the fo re c los ur e sa le . Se c tio n 3 4. 04 (f ) i s not a p p l i c a b l e t o c o n v e yan c e s o f

r e a l p r o p e rt y prior

to that tax fore closure sa le”) . The for mer tax code provision g overningthe re solution o f t h i s case allowed excess proce eds to be rec overe d by “ea ch former owner of the proper ty , as the intere st of eac h may ap p ea r” o n ce t h e p ar t y

“e s t ab l i s h es i t s cl ai m t o t h e p ro ce ed s . ” F o rm er § 3 4

. 0 4 (c ). By

o b t ai n i n g a quitclaim deed to the pr operty from the pr evious owner (Gitlin), Be lt beca m e an owner of the proper ty

. See G eodyneEn er

g y In co me Prod. P’ship I-E v . Newton Corp. , 161 S.W .3d 482, 486 (Tex. 2005) (explaining that quitclaim dee ds convey “the g rantor’ s rig hts in that property ”). F urther, be c a us e he ow ne d the pr op e rt y be fo re the a

uc tio n, he be c a me a

“ fo rm e r o wn e r” a ft e r t

he pr op e rt

y was sold at auc tion.

Mo re ov e r, we c ann ot a g re e wi th S tr a us s’ s a sse rt ion

that B e lt s ome ho w w a ive d h is rig ht to the proce eds by

failing to m ai n t ai n the prope rty . Assuming, a s sugg ested by Strauss, that B e l tm a d e n o a t t e mp t s t o p ay t h e t a x e s b e f o r e t h e s a l e , t o d e l ay t h e s a l e , o r t o r e d e e m t h e p r o p e rt y, his inactions would not deprive him of his o wn er s h i p status. Nothing in the g overningstatutes require s an owne r to take a ny of the a ctions sugg ested by Strauss befor e bec oming e ligible to re ceive excess proce eds. To the contrary , fore closure sa les are authorized prec isely beca use the owne r has not paid the taxes owed on the prope rty

. See Tex. Tax Code Ann. § 34.01(a ) (W est 2008) (explaining that prope rty

may be “or dere d sold pursuant to fore closure of a tax lien”). I n fac t, the8

pr op e rt y wa s sch e du le d for a

uc tio n b e c a

us e the re we re ta xes o we d o n th e pr op e rt y , a nd the re se e ms to be no dispute that Gitlin would have been entitled to the proceeds had he re tained owne rship of the pr op e rt

y e ve n th ou g h h e did

no t pay the ta xes ow e d. B e lt’ s a c tio ns we re c on sis te nt w ithGi tli n’ s, and B elt assumed Gitlin’s owner ship status after obta ining the q u i t cl ai m deed. A ccor dingly , we cannot c onclude that the inactions alleg ed by Strauss could have waived B elt’s statutory rig ht to the excess proce eds.

For these re asons, we c onclude that the s tatute at issue did not prohibit the transfe r of owne rship prior to a fore closure sale. Fur ther, we conclude that beca use the transfe r was not an assig nment of proceeds, Belt did not have to c omply with the restric tions set out by the leg islature

re g ard inga ssi g nme nts of

pr oc e e ds . We als o co nc lud e that Be lt did no t wa ive his ri g ht to the e xce ss proce eds. Ther efor e, we overr ule Strauss’s first issue on appe al.

Le gis lat ive Int e nt

I n her se cond cha lleng e to the district cour t’s ju d gm en t , S trauss conte nds that

a llo wi ngB e lt t o c oll e c t th e e xce ss p ro c e e ds is i nc on sis te nt w iththe le g isl a tur e ’s int e nt. Ag a in relying on the portion of the tax code provision per taining to the a ssignment of excess proce eds (subsec tion 34.04(f)), Strauss contends that by imposing the re quirements for a valid assig nment of proce eds, the leg islature has e x presse d its int ent to protec t owners f rom exploi tative pra ctices. See id. § 34.04(f) . I n fac t, Strauss claims that prior to the leg isl at u re’ s decision to impose the

re qu ir e me nts , in div idu a ls we re “ e xploi tin g the e xce ss p ro c e e ds law t o e arn un c on sc ion a

ble pr of its ” by takin g a dv anta g e of

pa rt ic u l a r l y v uln e ra ble pr op e rt

y ow ne rs . Si mil arl y , St

ra us s c on te nd s th a t B e lt has cr eate d an unconsc ionable sche me to circ umvent the protec tive require ments n ec essary for a9

proper assig nment of proc eeds by rese arc hing “ upcoming tax s ales,” by finding “prope rties valued signific antly

more than the taxes due,” and by o b taining “ a quitclaim dee d for nominal

c on sid e ratio n” sh or

tly be fo re the sa le wi tho ut a

ny int e nt t o a c tua lly ke e p the pr op e rt y . Wh ile Str a

us s admits that Belt’s a ctions might fol low “the letter of the law ,” she insists that his actions and the district court’s judg ment are inconsistent with “the intent of the law ” and the leg islature.

Undoubtedly , the cur

rent a nd former

versions of subs ection 34.04 demonstrate a leg islative interest in protec ting pr operty owner s from unscr

upulous assignme nt prac tices occ urring afte r a f orec losure sale , see id. , but the statute in eff ect at the time of the proce eds hear ing did not speak to the sa le of prope rty befor e a f

orec losure sale and, ac cord i n gl y , d i d not set out a similar protec tive scheme for proper ty owner s who sell their prope rty prior to a f

orec losure sale but after

a judgme nt ha s been enter ed order ing that the proper ty be sold, see former § 34.04(c) . Although the

sa le of pr op e rt y pr ior to a fo re c los ur e sa le c ou ld r e su lt in the ty pe s o f w ind fa lls that Str a

us s su g g e sts

oc c ur re d und e r t

he pr ior statut or y sc he me wh e n p e op le so ug ht t o o bta in a ssi g nme nts of e xce ss proce eds af

ter for eclosure auctions, we are not permitted to engr af t leg islative conce rns reg ardingthe assig nment of proceeds to an entirely differ ent ac tivity that the leg islature chose not to prohibit or restrict.

Our de termination that the statute in ef fec t during the relevant t ime did not evince a leg islative intent to protect owner s seekingto sell their proper ty befor e a ta x sale is supported by the fa c t th a t a ft e r t

he a pp e a l in th is ca se wa s f ile d, the le g isl a tur e c ho se to a dd re ss t he pr ob le ms potentially

implicated by

the sale of

proper ty prior to a tax sale but afte r a for eclosure judgme nt hasThe leg islative history pertai n ing to the a

mendments indicates that whe n the leg islature 4 made the c hang es, it had bee n informed of the possibilit y

t h at t h e prior la

w allowed f

or the possibili ty

of unscr upu l o u s business prac tices. F or example, the bill analy sis summ ary of the argume nt f

ro m th e ind ivi du a ls s up po rt ingthe c ha ng e s p ro vid e s a s f

oll ow s: Whil e the ma

jor ity of fi rm s th a t a ssi st i nd ivi du a ls t o c la im the ir rig htf ul e xce ss proce eds of a

tax sale provide a

valuable se rvice and oper ate within the law, the re a re a fe w bad a ctors whose fra udulent actions and misre prese ntations req uire tig hter regulation of the industry . These unsc rupulous g roups pre y on the old a

nd disabled, the ill ite rate, and th os e wh o ma y no t sp e a k E ng lis h. Th e re have be e n in sta nc e s in Te xas w he re a ssi g nme nt com pan ie s r e c e ive d te ns of tho us and s o f d oll ars fr om a court but had f

irst purcha sed the rig ht to do so from a prior owner for a fe w thousand dollars. The most common business model for a ssignment c ompanies is t o scan pu bli c re c or ds fo r a

pe ndin g ta x sal e , p re ssu re an o wn e r i nto se lli ngthe pr op e rt y about to be sold f

or dimes on the dollar, and the n collect the w indfall excess proce eds of the tax sale. Ho us e Re sear ch Or g ., B ill An a ly sis , T e x. H. B . 4 06 , 8 1s t L e g ., R.S. (2 00 9) . F ur the r, the ho us e committee re port stated that “U nscrupulous investors ar e exploiti ng the forme r o wn e r ’ s r ig hts to the” excess proce eds. House Com m. on Way s & Means, Bill Analy sis, Tex. H.B

. 406, 81st L eg ., R.S., 20 09 . Si mil arl y , th e se nate c omm itt e e re po rt re late d th e fo llo wi ng : Prior to the county

auction, people unrelated to the proper ty may obtain information about the for

mer prope rty

owner , in cl u ding c ontact informa tion and the amount of excess proce eds owe d to the former proper ty owner . I n an ef

for t t o make a

n inv e stm e nt, the pe rs on

may the n a pp ro a c h th e pr op e rt

y ow ne r an d off

e r t o p ur c ha se the prope rty

owner ’s rig hts. I f the prope rty owner ag ree s to transfer h i s or her interest, the tra

nsfer may b e ac co mplished by an assig nment, transfe r, or other contra ctual agr eeme nt.

. . . This prac tice is unregulated, including the amount of the fee s that may

be cha rg ed. Consequently , very

high f ees ma y be cha rg ed. Senate Comm. on Fin., B ill Analy sis, Tex . H.B . 406, 81st L eg ., R.S. (2009). 10 been e ntere d. Under

the new statute, the only

individuals who may file a claim for excess proce eds 4

are former

owner s who are listed as def endants in the for eclosure judgme nt, are related to a defe ndant listed in the judgme nt, or have acquir ed an intere st to the property due to the death of a defe ndant listed in the judgme nt. Tex. Tax Code Ann. § 34.04(c ) (West Supp. 2009). Moreove r,Spe c if ic a lly , th e ne w s tatut or

y langua g e statut e pr ov ide s, in r e le va nt p art , a s f

oll ow s: 5 (c) At the hea

ring the co u rt s h all order that the proc eeds be paid ac cordingto the following priorities to eac h party that establishes its claim to the proce eds.

. . . (5) to eac h former owner of t he property , as the intere st of eac h may appea r, provided that the former owner : (A ) w a s a de fe nd ant i n th e jud g me nt; (B ) i s r e late d w ith in the thi rd de g re e by c on sa nguin ity or a ff ini ty to a for mer ow ne r t hat w a s a de fe nd ant i n the judg ment; or (C) ac quired by

will or intestate succ ession the int e re st i n the prop e rt

y of a fo rm e r o wn e r t

hat w a s a de fe nd ant i n th e jud g me nt. (c- 1) Exc e p t a s p r o v id e d b y Su b s e c ti o n s ( c ) ( 5 ) ( B ) an d ( C) , a f o r me r o w n e r o f

the proper ty that acquir ed an interest in the proper ty afte r the date of

the judg ment may not establish a claim to the proceeds. For purposes of this subsection, a for mer owne r of the pr op e rt

y is c on sid e re d to have a c qu ir e d an int e re st in th e pr op e rt y a ft e r t he date of the judg ment if the dee d by which the f

ormer owner a cquire d th e int ere st was rec orded in the r eal pr operty rec ords of the c ounty

in wh ich the prope rty

is located a ft e r t he date of the jud g me nt. Tex. Tax Code Ann. § 34.04 (West Supp. 2009).

11 with the exception of relatives and those who acquir e an intere st due to the death of a de fenda nt, the
statut e e xpre ssl y fo rb ids ind ivi du a ls fr om fi lin g a c la im fo r e xce ss p ro c e e ds if the y ob ta in a n in te re st in property

afte r a f orec losure judg ment. Id. § 34.04(c- 1) (West Supp. 2009). 5 I n h e r s e c on d is su e , S tr aus s a lso c on te nd s th a t B e lt i s n ot e nti tle d to the e xce ss proce eds under

former section 34.04(c ) of the tax code be cause h e is not “a pr oper c laimant” or a12

“for mer owne r” a s intended by the leg islature. See former § 34.04(c) (allowingprior owners t o be

awa rded e x cess pr ocee ds if they establish their cla ims to proceeds)

. Str a us s in sis ts that B e lt c ou ld not pr op e rl y e sta bli sha c la im t o th e pr oc e e ds be c a us e his a c tio ns and

ina c tio ns “ we re int e nd e d to cir c umv e nt the

. . . r e qu ir e me nts of a ssi g nme nt o f e xce ss proce eds.” Acc ording ly , Strauss contends that individuals who “intentionally circ umvent the law” cannot pr operly

establish a cla im

. Simi larly , althoug h Strauss seems to conc ede that Be lt owned the prope rty

at the time of the sa le bec ause of the quitclaim deed, she insists that quitclaim deeds cannot be used to eff

ectively assig n awa

y rig hts to ex cess pr ocee ds. Although Stra

uss ag ain cha

rac terizes Be lt’s actions as esse ntially an assig nment of rig hts to ex cess pr ocee ds, that is not what occur red in this case . Moreove r, B elt may have a voided the assig nment require ments by purcha sing the proper

ty shortly befor e the sa le, but nothing in the g overningstatutes prohibited him from eng ag ing in that a ction. I n other words, bec ause B elt did not ob ta in a n ass ig nme nt of e xce ss p ro c e e ds , h e did no t ne e d to c omp ly

wi th t he re qu ir e me nts lis te d in the provision g overningthe assig nment of proc eeds. For that rea son, we cannot conc lude that B elt’s de c isi on to p ur c ha se the pr op e rt

y be fo re the sa le pr e ve nte d him fr om p ro pe rl y

e sta bli sh inga c la im. On t he contrary , Be lt established his claim t o the proc eeds a s a for mer owne r pre cisely

by showing that he had pur chase d and obtained ownership of the proper ty prior to the for eclosure sale. Al te rn a tiv e ly , Stra

us s c on te nd s th a t e ve n if B e lt ha s a cla im t o th e e xce ss p ro c e e ds , he “f alls outside the [l ]egislative intent of a ‘for mer owne r.’” I n making this a ssertion, Strauss notes that when the l egis lature ma de prior modific ations to the portion of section 34.04 desc ribing who may collect pr ocee ds, the l eg islative history acc ompanying the modification “[c]larifie[d] that . . .I n he r re ply br ie f, Str a us s all e g e s for the fi rs t time that Be lt wa s n ot e nti tle d to the e xce ss 6 proce eds bec ause he “off

ere d no evidenc e of the date of t he tax fore closure sa le.” See F ew v. Fe w , 13 the last priority of pay

ment of excess sale pr ocee ds is to the former ow ner of the prope rty , rathe r than the pe rs on

wh o a c qu ir e d th e pr op e rt y a t the sa le .” Ho us e Com m. on L oc a l Gov ’t Way s & Me ans , Bill Analy sis, Tex . H.B . 3419, 78th L eg ., R.S. (2003). From this history , Strauss surmises that the leg islature “intended for there to be differe nt classes of ‘owne rs,’ e ach w ith differe nt interests in the proper ty , and ea ch with a differ ent basis for their claims. This amendment c larifies that cer tain ty pes of ‘owne rs’ are not e ntitled to ex cess pr ocee ds.” Ac cording ly , Strauss contends that eve n if Be lt was the forme r own er , “h e is not the ty pe of f ormer owner the leg islature intended to r ece ive excess proce eds.”

Strauss rea ds too much i n t o the leg islative history . Although it addr essed a distinction between individuals who owned pr operty befor e a for eclosure sale a nd those who owne d
t h e p r o p e rt y a f

t e r t h e s a l e , i tm a d e n o f

u rt h e r d i s t i n c t i o na m o n g f

o r m e r o w n e r s . S t a t e d

d i f f e r e n t l y, it made no distinction between f ormer owners who owned proper ty befor e a judgme nt was ente red

or de ri ngthat the pr op e rt

y be so ld a t a fo re c los ur e sa le and fo rm e r ow ne rs wh o purc ha se d p ro pe rt y afte r a judgme nt w as enter ed but be fore the fore closure sa le occ urre d. Simi larly , at the time re levant to this case, the gove rning statute made no distinction between the ty pes of f ormer owners mentioned above. See former

§ 34.04(c)

. I n light of the prec eding , we c annot conclude that the district cour t’s judgme nt was inconsistent with any

expressed leg islative intent. Moreover , we c annot endor se Strauss’s asse rtions that Be lt was not a prope r cla i m an t o r a former owne r. F or these r easons, we overr ule Strauss’s

se c on d is su e on

a pp e a l. 6271 S.W .3d 341, 347 (Tex.App.—El Paso 2008, pet. denied) (stating that appellate courts may not addre ss issues raised for

first time in r eply brief)

. Acc ording ly , Strauss contends that there was no evidenc e to support his “conte ntion that [he] was the owner of the prope rty

on the date of

sale of the proper ty .” Se e N.K

. R es. , I nc . v . S he ldo n R d. Mu n. Ut il. Di

st. , No. 01-04-00261- CV, 2005 Tex. App. L EXI S 3604, at * 4 (Tex. App.—Houston [1s t Dist.] May 12, 2005, pet. denied) (mem. op.) (upholding trial co u rt ’s dec ision to deny reque st for excess proc eeds w hen appe llant offer ed no evidenc e during trial to suppor t c ontention that it purcha sed proper ty two day s befor e for eclosure ). Ev e n a ssumin g that th is i ss ue is pr op e rl y be fo re us , w e wo uld

sti ll b e un a

ble to s us ta in Strauss’s asser

tion of err or. While it i s true that no d o cu m en ts were admitted showing when the quitclaim deed wa s executed or whe n the fore closure sa le occ urre d, Be lt did testi fy during the hear ing that he purc hased the proper ty “[ t ] wo we ek s b ef

ore the tax s ale.” Fur

ther, the timing of those eve nts was not in dispute during the proce eds hea ring : Strauss never a sserted that Be lt had not purcha sed the prope rty

p ri o r t o t h e fo rec losure sale . I n fac t, in her petition and in her a mended petition, St rauss a dmitted that Belt “obta ined a quitclaim deed to the proper ty

. . . 13-day s befor e the ta x for e c los ur e sa le .” Simi larl y , in he r o pe nin g a

pp e llate br ief, Str a

us s a lso c on c e de s th a t B e lt obtained a quitcla im d ee d p ri o r t o the sale. See Te x. R. A pp . P. 38 .1 (g ) ( e xpla ini ngthat in c ivi l c a se s, a pp e llate c ourt s “a c c e pt as tr ue ” fa c ts s tate d in

a pp e lla nt’ s st a te me nt o f f

a c ts unle ss “ another party contra dicts them” (e mphasis added) ). 14 CO NC LU SION Havingoverr

uled Strauss’s issues on appe al, we a ffirm t h e j u d g ment of the district court.

David Pury ear , J ustice Be fore Chief J ustice Jones, J ustices Pury ear and He nson Affir med Filed: Jul y

23, 2010