## NO. 12

- 14

- 00260

- CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

NAC TEX HOTEL CO., I NC., APPELLANT

V.
STEPHEN GREAK, INDIV IDUALLY, DEE WINSTON, INDIVIDUALLY AND E & G INVESTMENTS, A GENERAL PARTNERSHIP, APPELLEE S §

§

§ APPEAL FROM THE 217T H

JUDICIAL DISTRICT COURT

ANGELINA COUNTY, TEX AS

OPINION Nac Tex Hotel Co., Inc. ( Corporation ) appeals a judgment awarding title and possessio n of certain real property and attorney’s fees to Stephen Greak, Dee W inston, and E & G Investments (collectively Partnership ). For the reasons that follow, we modify the judgment to delete the award of attorney’s fees and affirm the judgment as modified

.

B ACKGROUND In 1966, Arthur Temple and R. B. Thompson leased a building on a .411 acre tract of land
on Timberland Drive in Lufkin, Texas, to Richard and Lucille DeWitt for the purpose of operating a Kentucky Fried Chicken (KFC) franchise. In 1981, Templ e and Thompson sold the
.411 acre tract of land and the building to the DeWitt s. At the time of this sale, Temple and Thompson executed an easement to the DeWitt s allowing them to connect their .411 acre tract of
land to nearby Chestnut Street . This prov ided KFC customers and suppl iers a second street from
which to access their business

. Sometime during the early 1980s, the DeWitts added a drive through to the building as required by their KFC franchiso r. As part of this expansion, the DeWitt s also asph alted the2

property and built a concrete bridge over a body of water located on a triangular shaped area between their .411 acre and the 1981 easement. This triangle was actually owned by Temple as part of a n adjoining .546 acre tract of land. The DeWitt s used the triangle as ingress and egress
for the KFC drive th r ough, delivery vehicles, and also their employee parking. Further, the
DeWitt s landscaped parts of the property. They also maintained the property and kept it clean. In 1988, the DeWitt s so ld the KFC franchise alo ng with the .411 acre tract to the
C orporation , which i s owned by their daughter, Debra Parmalee

. Parmalee continued to
maintai n and use the triangle as if the Corporation owned it. Parmalee also testified that she
interacted with Temple on occasion . She stated that she never discussed use of the triangle with Temple because “I didn’t think there was anything to discuss with him.” She further stated
, “I wouldn’t never [sic] intentionally take anything from that man.” In 2007, Temple offered to sell the .546 acre tract of land to the Corporation

. Parmalee
testified that she declined this offer because she did not have the money at that time to purchase it. Temple then sold the property to the P artnership. In 2009, Greak conta cted Parmalee to tell
her that her employees were parking on the P artnership’s property. Parmalee eventually instructed her employees not to park in that area and neither party took any further action

. By 2012, KFC employees again had begun parking in th e area Greak and Winston thought was part of their .546 acre tract . They learn ed upon further investigation that the KFC employees we re actually parking o n th e 1981 easement. However, the C orporation’s use of the triangle then became an issue . When the parties could not reach an agreement on the
C orporation’s use of the triangle, the C orporation filed a trespass t o try title action against the
P artnership alleging that it had acquired title to the triangle by adverse possession. The
P artnership filed an answer stating that it was not guilty as to the trespass to try title claim, making a general denial , and seeking attorney’s fees pursuant to S ection 16.034 of the Texas
Civil Practice and Remedies Code. Following a jury trial, the trial cou rt r en d ered judgment that the C orporation take nothing
on its adve rse possession claim and that the C orporation ’s suit was groundless and filed in bad
faith . It also award ed the P artnership $49,000.00 in attorney’s fees. This appeal followed.3 A DVERSE P OSSESSION In its first issue, the Corporation asserts that the trial court erred in rendering judgment on the jury finding that it had not established adverse possession . It contends that it established , as a matter of law, all of the elements required to vest tit le in it under both the ten and twenty

- five year adverse possession statutes.
Standard of Review When a party attacks the l egal sufficiency of an adverse finding on an issue on which she has the burden of proof, she must demonstrate on appeal that the e vidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co. v. Francis , 46 S.W.3d 237,
241 (Tex. 2001). In a “matter of law” challenge , we first examine the record for evidence t hat support s the finding , while ignoring all evidence to the contrary

. Id . If there is no evidence to support the finding, we will examine the entire record in order to determine whether the contrary proposition is established as a matter of law. Id . The final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair minded people to reach the
verdict under review. City of Keller v. Wilson , 168 S.W.3d 802, 82 7 (Tex. 2005). In making this determination, we must credit favorable evidence if a rea sonable finder of fact could, and disregard contrary evidence unless a reasonable finder of fact could not. Id

. Applicable Law Adverse possession means an actual and visible appropriation of real property, commenced and continued under a claim of right th at is inconsistent with and hostile to the claim of another person. T EX

. C IV

. P RAC

. & R EM

. C ODE A NN

. § 16.021 (1) (West 2002)

. To prevail on a claim of adverse possession, a claimant must establish, by a preponderance of the evidence, (1)
the actual and v isible possession of the disputed property; (2) that is adverse and hostile to the claim of the owner of record title; (3) that is open and notorious; (4) that is peaceable; (5) that is exclusive; and (6) that involves continuous cultivation, use , or enjoy ment throughout the statutory period. Anderton v. Lane , 439 S.W.3d 514, 517 (Tex. App.

— El Paso 2014, pet.
denied ). To satisfy a limitations period, peaceful and adverse possession does not need to continue in the same person or entity, but there must be privity of e state between each holder and
his successor. T EX

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. § 16.023 (West 2002) . One seeking to establish title to land by virtue of the statute of limitations has the burden of proving every fact4

essential to that claim by a preponderance of the evidence. Rhodes v. Cahill , 802 S.W.2d 643, 645 (Tex. 1990) (op. on reh’g)

. Ten Year Statute To prevail pursuant to the ten

- year statute, a person must bring suit not later than ten years after the day the cause of action accrue s to recover real property held in peaceable and adverse possession by another who cultivates, uses, or enjoys the property. T EX

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. &
R EM

. C ODE A NN . § 16.026(a) (West 2002)

. It is for the jury to determine whether the plaintiffs proved the factu al elements of a limitation title under the ten year statute. King v. Inwood North
Assoc. , 563 S.W.2d 309, 313 (Tex. Civ. App.

— Houston [ 1st Dist.] 1978, no writ).
Of the six above

- named elements required to prove adverse possession, a discussion of
the e lement of hostil e intent is dispositive here . The test for hostility is whether the acts performed by the claimant on the land and the use made of the land were of such a nature and character as to reasonably notify the true owner of the land that a hosti le claim was being asserted to the property. Mas onic Bldg. Ass ’n of Houston, Inc. v. McWhorter , 177 S.W.3d 465, 472 (Tex. App.

— Houston [1 st Dist.] 2005, no pet.). Mere occupancy of land without any intention to appropriate it will not support the statute of limitations. Ellis v. Jansing , 620 S.W.2d 569, 571 (Tex. 1981). No matter how exclusive and hostile to the true owner the possession may be in appearance, it cannot be adverse unless accompanied by intent on the part of the occupant to make it so. I d. at 571

- 72. There must be an intention to claim the property as one’s own to the exclusion of all others. Tran v. Macha , 213 S.W.3d 913, 915 (Tex. 2006) (per curiam) . But the d octrine of adverse poss ession itself is a harsh one, taking real estate fro m a record owner without express consent or compensation. Id

. Before taking such a severe step, the law reasonably requires that the parties’ intentions be very clear. Id.
The Corporation argue s that when a claimant believes that it owns the land , it is not require d to prove an intention to remove the legal owner or even know if someone else owns the land. For this contention, the Corporation cites Calfee v. Duke , 544 S.W.2d 640 (Tex. 1976). We disagree with the Corporation ’s reading of Calfee . In t hat case, Calfee believed that he
owned a 24.744 acre tract of land tha t was within his fence line . He testified that he “wasn’t claiming it against nobody.” He was claiming it becaus e he thought everything within h is fence
line had been part of his deed

. Id . at 641

- 42

. The jury made a finding of fact that Calfee intended to claim the property. As Justice Tom R eavley , then on the Texas Supr eme Court ,5

wrote , “In many cases statements of the adverse claimant appear to be, or may in fact be,
inconsistent. It is usually held that a fact issue is thereby presented on the question of his intent to claim the land.” Id . at 642. A jury issue on intent had been created , and the trial court
resolved all fact issues in favor of Calfee. Id

. Without record cita tion, th e Corporation asserts that its “use and activity was hostile to
the record titleholder

. ” Additionally, it asserts that “[t]he mere fact that the claim is against the wishes of the landowner is enough to determine that the possession is hostile.” T he Corporation cites to no authority for this proposition.
In the case befo re us, Parmalee testified that she thought she owned the property . She
then created a fact issue when she testified that she would “ never intentionally take anything ”
from the re cord owner of the property, Arthur Temple. Where the evidence in an adverse possession case is conflicting , its weight is a question of fact for the court or jury. Wilson v. Rogers , 343 S.W.2d 309, 313 (Tex. Civ. App.

— Houston 1961, writ ref’d n.r.e.). We hold that a
fact issue on hostile intent was created by Parmalee’s testimony. See Calfee , 544 S.W.2d at 6 42. Other evidence showed that, while the Corporation made some improvements to the disputed area, it was not included in the Corporation’s deed, the Corporation made no attempt to keep anyone off that property, and Parmalee testified that she had the opportunity to purchase it, but did not. In short, the evidence supports a finding of no hostile intent. Accordingly, we cannot conclude that the ju ry’s finding against the Corporation on the element of hostile intent was incorrect

. See Tran , 213 S.W.3d at 915. The C orporation has thus failed to establish each and every element of the ten year statute. See Anderton , 439 S.W.3d at 517. Twenty

- Five Y ear Statute Possession
The Corporation also contended that it had adversely possessed the property for twenty

five years, and therefore was entitled to recover under the twenty

- five year adverse possession

statute. See T EX

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. C ODE A NN . § 16.028 (West 2002). This S ection provides that suit must be brought within twenty

- five years against the person who holds the property in good faith and under a deed purporting to convey this property that is recorded in the deed records of the county wh ere any part of the real property is located. Terrill v. Tuckness , 98 5 S.W.2d 97, 107 (Tex. App.

— San Antonio 1998, no pet.) (op. on reh’g) . Further, payment of

taxes can be evidence of a claim of ownership

. Kinder Morgan North Tex. Pipeline, L.P. v.
Jus tiss , 202 S.W.3d 427, 441 (Tex. App.

— Texarkana 2006, no pet.)

.6

Here, the disputed property was not included in the deed to the Corporation’s .411 acre tract of land. Therefore, t he Corporation did not claim the property under color of title. Furt her,
it is undisputed that the C orporatio n never paid taxes on the disputed property . Ther efore, as a matter of law, the C orpo ration’s claim under the twenty

- five year adverse possession statute
fails. Id

. W e overrule t he C orp oration’s first issue

.

B AD F AITH In its second issue, the Corporation contends that the trial court erred when it determined that its claims for adverse possession were made in bad faith. 1 The Corporation asserts there is
no evidence of bad faith. “Bad faith” requires the conscious doin g of a wrong for a dishonest, discriminatory , or malicious purpose. Save Our Springs Alliance, Inc. v. Lazy Nine Mun. Util

. Dist

. , 198 S.W.3d 300, 321 (Tex. App.

— Texarkana 2006, pet. denied). We review the trial court’s determination of bad faith as a qu estion of law under an abuse of discretion standard. Schlager v. Clements
, 939 S.W.2d 183, 1 9 0 (Tex. App.

— Houston [14 th Dist.] 1996, writ denied). A trial court abuses its discretion when its decision is contrary to the only permissible view of probative , properly
admitted evidence. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009) (per curiam) . Courts presume that pleadings and other papers are filed in good faith. Id . That presumption must be overcome before there can be a finding of bad faith. See id

. The P artnership contends that it establish ed bad faith with evidence that the
C orporation’s claim was not exclusive or hostile, th e C orporation lacked intent to claim its property , and neither the C orporation nor its predecessor had ever p aid property ta xes on the land
at issue . Further, the P artnership contends that because Parmalee did not attend the 1981 and 1988 closings, she was willfully ignorant that the disputed land was not part of her deed to the
.411 acre.
We disagree that this evidence constitutes any probative evidence of bad faith. The Partnership bore the burden of proving that the C orporation’s adverse possession claim was filed for a dishonest, discriminatory , or malicious purpose. See Save Our Springs Alliance, Inc. , 19 8

1 The trial court also determined that the C orporation’s claims for adverse possession were groundless. Claims are considered groundless if they have no basis in the law or fact or are not warranted by good faith argument for the extension, modification, or reversal of exi sting law. Donwerth v. Preston II Chry sler

- Dodge, Inc
., 775 S.W.2d 634, 637 (Tex. 1989). Because the C orporation has not challenged th e trial court’s determination that its claims are groundless, we will not consider it.7

S.W.3d at 321. The fa cts of this case show that the C orporation and its predecessor had used the property since 19 8 1 . The evidence further shows that there had been peaceable possession of the property by the C orporation and its predecessor from 198 1 u ntil 2012 . When the Partnership challenged the C orporation’s use of the property in 2012, it was proper for the C orporation to
seek a determination from the courts of this state as to whether it had established a claim to the disputed land under limitatio n title . The courts of this state are open to all persons for the litigation of their claims and demands. Univ. of Tex. v. Morris , 344 S.W.2d 426, 429 (Tex. 1961).
N one of the evidence established that the suit was filed for a dishonest, discriminator y , or malicious purpose. Therefore, t he Partnership failed to overcome the presumption of good faith
on the Corporation’s behalf. See Villa , 299 S.W.3d at 97. The trial court abused its discretion in determining that the Corporation fil ed this adverse p ossession suit in bad faith

. We sustain t he
C orporation’s second issue.

A TTORNEY ’ S F EES In its third issue, the C orporation contends that the trial court erred in ordering it to pay
the P artnership $49,0 00.00 in attorney’s fees. The Corporation contend s that the P artnership failed to meet the statutory requirements of S ection 16.034 of the Texas Civil Practice and
Remedies Code , which states as follows :

(a) In a suit for the possession of real property between a person claiming under record title to the pr operty and one claiming by adverse possession, if the prevailing party recovers possession of the property from a person unlawfully in actual possession, the court: (1) shall award costs and reasonable attorney’s fees to the prevailing party if the court fin ds that the person unlawfully in actual possession made a claim of adverse possession that was groundless and made in bad faith; and (2) may award costs and reasonable attorney’s fees to the prevailing party in the absence of a finding described by Subdivision (1). (b) To recover attorney’s fees, the person seeking possession must give the person unlawfully in possession a written demand for that person to vacate the premises. The demand must be given by registered or certified mail at least 10 days before filing the claim for recovery of possession. (c) The demand must state that if the person unlawfully in possession does not vacate the premises within 10 days and a claim is filed by the person seeking possession, the court may enter a judgment against the person unl awfully in possession for costs and attorney’s fees in an amount determined by the court to be reasonable.

T EX

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. § 16.034 (West Supp. 2014).8

Pursuant to Section 16.034(a)(1), the Partnership would be entitled to attorney’s
f ees if it showed that the suit was both groundless and filed in bad faith. Id

. As we have
determined in our d iscussion of the second issue, the Partnership has failed to prove bad
faith on the C orporati on’s part in filing this suit and, therefore, the tr ial court was not required to award it attorney’s fees pursuant to Section 16.034(a)(1). Section 16.034(a)(2) allows the trial court to award attorney’s fees in the absence of a bad faith finding. See id . § 16.034(a)(2). Use of the word “may” signals th at t he
statute affords the trial court a measure of discretion. T EX

. G OV ’ T C ODE A NN

. § 311.016(1) (West 2013) . Additionally , the statut e requires the person seeking possession to give a written demand for th e person unlawfully in possession to vacate the premises at least ten days before filing the suit for recovery of possession. T EX

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. § 16.034 (b), (c); Bernal v. Chavez , 198 S.W.3d 15, 21 (Tex. App.

— El Paso 2006, no pet.). Here, there is no evidence that the P artnership follo wed
the statutory notice requirement before it made an appearance in th e suit . At oral argument, the P artnership conceded that it had not done so. Therefore , the Partnership is not entitled to attorney’s fees provided by S ection 16.034 of the Texas Civil Practice and
Remedies Code. Barfield v. Holland , 844 S.W.2d 759 , 771 (Tex. App.

— Tyler 1992,
writ denied). Texas has long followed the “American Rule” prohibiting fee awards unless specifically provided by contract or statute. MBM Fin. Corp. v. Woodland s Operating Co ., L.P. , 292 S.W.3d 660, 669 (Tex. 2009). Because the P artnership failed to
establish its entitlement to attorney’s fees , the trial court abused its discretion in awarding attorney’s fees to the Partnership . We sustain t he C orporation’s thi rd issue.

C ONCLUSION Because we have sustained the C orporation’s issues two and three, we modify the judgment to delete the award of attorney’s fees to the Partnership and affirm the judgment as modified

. J AMES T. W ORTHEN Chief Justice
Opinion delivered September 23, 2015

. Panel consisted of Worthen, C.J., Neeley, J. , and Bass, Retired J., Twelfth Court of Appeals, sitting by assignment. ( PUBLISH )

## COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

JUDGMENT

SEPTEMBER 23 , 2015

NO. 12

- 14

- 0 0260

- CV

NAC TEX HOTEL CO., I NC.,

Appellant V. STEPHEN GREAK, INDIV IDUALLY, DEE WINSTON , INDIVIDUALLY AND E & G INVESTMENT S, A GENERAL PARTNER SHIP, Appellee s

Appeal from the 217th District Court of Angelina County, Texas (Tr.Ct.No. CV

- 01824

- 12

- 10)

THIS CAUSE came on to be heard on the oral arguments, appellate
record , and the briefs filed herein; and the same being inspected, it is the opinion of the Court that the trial court’s judgment below should be modified and, as modified, affirmed

.

It is therefore ORDERED, ADJUDGED and DECREED that the trial court’s judgment below be modified to delete the award of attorney’s fees to Stephen Greak, individually, Dee Winston, individually, and E & G Investments, a General Partners hip ; and as
modified , the t rial court’s judgment is affirmed

.It is further ORDERED that all costs of this appeal are hereby adjudged against the party incurring same; and that this decision be certified to the trial
court below for observance.
James T. Worthen , Chief Justice

. Panel consisted of Worthen, C.J., Neeley, J. , and Bass, Retired J., Twelfth Court of Appeals, sitting by assignment.