Court Opinion

ID: 7806809
Source: CourtListenerOpinion
Date Created: 2022-09-07 06:10:59.015596+00
Date Added: 2024-06-11T16:30:18.253359
License: Public Domain

Dismiss and Opinion Filed September 1, 2022

                                        In The
                             Court of Appeals
                      Fifth District of Texas at Dallas
                                No. 05-20-00982-CV

     JOHNNY AGUINAGA AND DFW PROJECTS, LLC, Appellants
                           V.
 JAT PROJECTS HOLDINGS TEXAS, LLC AND JAT REAL PROPERTY
               HOLDINGS TEXAS, LLC, Appellees

                On Appeal from the 193rd Judicial District Court
                             Dallas County, Texas
                     Trial Court Cause No. DC-20-10069

                         MEMORANDUM OPINION
             Before Justices Partida-Kipness, Pedersen, III, and Nowell
                          Opinion by Justice Pedersen, III
      This appeal involves the severed portion of a dispute between joint venturers

who planned to develop townhomes on a particular piece of property (the Property).

In the course of that larger dispute, appellants Johnny Aguinaga and DFW Projects,

LLC filed a notice of lis pendens on the Property. On motion of appellees JAT

Projects Holdings Texas, LLC and JAT Real Property Holdings Texas, LLC, the

trial court expunged the notice. The trial court then awarded appellees attorney’s

fees, severed this portion of the case, and signed a final judgment in the severed

action. In this Court, appellants challenge the legal and evidentiary bases for the trial
court’s expunction of the notice of lis pendens. We conclude that the appeal is moot,

and we vacate the judgment of the trial court and dismiss the case for want of

jurisdiction.

        Appellants’ brief asks us (a) to “reverse and render” the trial court’s judgment

expunging the lis pendens and awarding attorney’s fees and (b) to order

reconsolidation of the underlying case. Such a reversal would resuscitate the lis

pendens in the real property records as notice of appellants’ claims against appellees

involving the Property. Those claims involved “title to real property, the

establishment of an interest in real property, or the enforcement of an encumbrance

against real property” held by appellees. 1

        However, after appellants filed their brief, appellees filed a Motion to Dismiss

Appeal for Mootness. Appellees attached a certified copy of the trial court’s

expunction order, showing that on January 15, 2020, the order had been filed in

Dallas County’s real property records. And they explained that on November 14,

2020—some twelve days after appellants perfected this appeal—the Property was

   1
       The Notice of Lis Pendens identified the lawsuit and stated:
        The Lawsuit is a civil case in which Defendants are seeking affirmative relief against JAT
        Project Holdings Texas, LLC, JAT Real Estate Holdings Texas, LLC and John Thaler
        involving title to real property, the establishment of an interest in real property, or the
        enforcement of an encumbrance against real property.

        The Defendants are seeking various types of relief in the Lawsuit that may affect title to
        real property, including specific performance, rescission, and the imposition of a
        constructive trust.

                                                   –2–
sold to a third-party purchaser, Gilfan Lakewood East, LLC (Gilfan). A certified

copy of the Special Warranty Deed evidencing the sale to Gilfan was attached to the

motion to dismiss as well. Appellees argued that once they properly filed the

expunction order, “title to the Property at issue was ‘free and clear’ of any

encumbrances or clouds on title which would have caused any subsequent

purchasers to being on notice of a lis pendens (or other cloud of title).” Appellees

relied on the following section of the expunction statute:

      After a certified copy of an order expunging a notice of lis pendens has
      been recorded:
      (1) the notice of lis pendens and any information derived or that could
      be derived from the notice:

             (A) does not:

                   (i) constitute constructive or actual notice of any matter
                   contained in the notice or of any matter relating to the
                   action in connection with which the notice was filed;

                   (ii) create any duty of inquiry in a person with respect to
                   the property described in the notice; or

                   (iii) affect the validity of a conveyance to a purchaser for
                   value or of a mortgage to a lender for value; and

             (B) is not enforceable against a purchaser or lender described by
             Paragraph (A)(iii), regardless of whether the purchaser or lender
             knew of the lis pendens action; and

      (2) an interest in the real property may be transferred or encumbered
      free of all matters asserted or disclosed in the notice and all claims or
      other matters asserted or disclosed in the action in connection with
      which the notice was filed.

                                        –3–
TEX. PROP. CODE ANN. § 12.0071(f). Appellees argued that, given the “protective

effect” of this statute, if we were to reinstate the Notice of Lis Pendens, such a ruling

would have no legal effect or consequence on appellants, appellees, or Gilfan.

        Appellants responded to the motion to dismiss, arguing that appellees have

“neither made nor presented any record which indicates that the subsequent purchase

has good faith status,” relying upon section f(1)(A)(3)’s description of a “purchaser

for value.”

        We denied the motion to dismiss at that time and directed appellees to file

their brief. Appellees did so, arguing the expunction order was proper and again

contending that the appeal was moot once the Property was sold. Appellants did not

file a reply brief.

        With the advantage of full briefing and a full review of the record, we now

review de novo the question of whether this appeal became moot once the Property

was sold. See Heckman v. Williamson Cty., 369 S.W.3d 137, 149–50 (Tex. 2012)

(“The application of the mootness doctrine is reviewed de novo on appeal.”). A case

becomes moot when a justiciable controversy exists between the parties at the time

the case arose, but that controversy ceases because of subsequent events. Matthews

v. Kountze Indep. Sch. Dist., 484 S.W.3d 416, 418 (Tex. 2016). A controversy may

cease to exist—and thus become moot—at any stage of the proceedings, including

during the appeal. In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex.

2005)      (orig.     proceeding).   Appellate     courts     lack    jurisdiction    to

                                          –4–
decide moot controversies and render advisory opinions. See Matthews, 484 S.W.3d

at 418 (mootness doctrine prevents appellate courts from rendering advisory

opinions, which are outside jurisdiction conferred by Texas Constitution).

      As we stated above, appellants would have us reverse the trial court’s

judgment and resuscitate the lis pendens in the real property records as notice of their

claims against appellees involving the Property. But regardless of any other claims

appellants may still have—and we express no opinion about any other claims—a

resuscitated lis pendens in this case, which warns of appellants’ claims against

appellees regarding appellees’ interest in the Property, can have no effect: those

claims are moot because appellees no longer possess an interest in the Property. And

to the extent the lis pendens was originally intended to warn potential purchasers of

appellants’ claims against appellees, such a “warning” today would be an empty one.

      Our record contains no request by appellants to stay or supersede or otherwise

suspend the enforcement of the trial court’s expunction order or judgment. In the

absence of such a constraint, appellees were able to transfer the Property “free of all

matters asserted or disclosed in the notice and all claims or other matters asserted or

disclosed in the action in connection with which the notice was filed.” PROP.

§ 12.0071(f)(2). And once the Property was sold, any decision by this Court

concerning the propriety of appellants’ lis pendens could have no practical effect on

an existing controversy between appellants and appellees. “A lis pendens is a

litigation tool that is predicated on the pendency of a suit at the time of the sale or

                                          –5–
transfer with respect to which it is sought to be invoked. Thus, a lis pendens has no

existence separate and apart from the litigation of which it gives notice.” C. Borunda

Holdings, Inc. v. Lake Proctor Irrigation Auth. of Comanche Cty., 540 S.W.3d 548,

552 (Tex. 2018) (interior quotes removed).

      As to appellants’ argument that appellees have not established that Gilfan is

entitled to the protection of the expunction statute as a “purchaser for value,” that

controversy is not before us. And while we may consider the evidence filed by

appellees in order to assess its effect on our jurisdiction, we are not a fact-finding

body that can investigate further into a sale of the Property. See Meeker v. Tarrant

Cty. Coll. Dist., 317 S.W.3d 754, 759 (Tex. App.—Fort Worth 2010, pet. denied)

(because mootness arises after rendition of order complained of, we can consider

evidence of matters occurring subsequent to order for that purpose alone); see also

State ex rel. Best v. Harper, 562 S.W.3d 1, 7 (Tex. 2018) (appellate court has power

to ascertain matters of fact necessary to proper exercise of its jurisdiction even if

evidence not in trial court’s record).

      We conclude that appellants’ issues have been rendered moot, and we lack

jurisdiction to address them. See id. Appellees ask us to dismiss the appeal. But the

Texas Supreme Court has found error when a court of appeals determines an appeal

is moot, but it dismisses only the appeal and leaves the trial court’s judgment in

place. See Marshall v. Hous. Auth. of City of San Antonio, 198 S.W.3d 782, 785

(Tex. 2006) (citing Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821, 822 (Tex.

                                         –6–
2000) and Speer v. Presbyterian Children’s Home & Serv. Agency, 847 S.W.2d 227,

230 (Tex. 1993)). We vacate the underlying judgment when a case becomes moot

on appeal “to prevent prejudice to the rights of parties when appellate review of a

judgment on its merits is precluded.” Marshall, 198 S.W.3d at 788; see also Meeker,

317 S.W.3d at 763 (merely dismissing appeal would have effect of affirming

judgment of lower court without considering any assignments of error thereto).

                                     Conclusion

      We have concluded that the appeal is moot. Accordingly, we vacate the trial

court’s judgment, including the award of attorney’s fees to appellees, and dismiss

this case for lack of subject-matter jurisdiction.

                                             /Bill Pedersen, III//
                                             BILL PEDERSEN, III
                                             JUSTICE

200982f.p05

                                          –7–
                           Court of Appeals
                    Fifth District of Texas at Dallas
                                 JUDGMENT

JOHNNY AGUINAGA AND DFW                      On Appeal from the 193rd Judicial
PROJECTS, LLC, Appellants                    District Court, Dallas County, Texas
                                             Trial Court Cause No. DC-20-10069.
No. 05-20-00982-CV          V.               Opinion delivered by Justice
                                             Pedersen, III. Justices Partida-
JAT PROJECTS HOLDINGS                        Kipness and Nowell participating.
TEXAS, LLC, AND JAT REAL
PROPERTY HOLDINGS TEXAS,
LLC, Appellees

      In accordance with this Court’s opinion of this date, we VACATE the trial
court’s judgment and DISMISS this case for lack of subject-matter jurisdiction.

      It is ORDERED that each party bear its own costs of this appeal.

Judgment entered this 1st day of September, 2022.

                                       –8–