Court Opinion

ID: 4667537
Source: CourtListenerOpinion
Date Created: 2021-03-15 07:16:32.198129+00
Date Added: 2024-06-11T08:02:57.662009
License: Public Domain

In the
        Court of Appeals
Second Appellate District of Texas
         at Fort Worth
     ___________________________
          No. 02-19-00356-CV
     ___________________________

  ANTHONY JAMES FLOYD, Appellant

                     V.

GATEWAY MORTGAGE GROUP, Appellee

 On Appeal from County Court at Law No. 1
          Tarrant County, Texas
      Trial Court No. 2019-005816-1

    Before Kerr, Birdwell, and Bassel, JJ.
   Memorandum Opinion by Justice Kerr
                          MEMORANDUM OPINION

      Anthony James Floyd sued Gateway Mortgage Group in Tarrant County Court

at Law No. 1 to stop Gateway from foreclosing on his home. Gateway moved to

dismiss the case, arguing that because the case’s amount in controversy exceeded the

general amount-in-controversy limitations for statutory county courts, Tarrant County

Court at Law No. 1 lacked subject-matter jurisdiction over the case. The court agreed

and dismissed the case. Because this conclusion was incorrect, we will reverse the trial

court’s judgment and remand the case to the trial court.

                                     Background

      In November 2014, Floyd and his wife signed a deed of trust granting a lien on

their home in favor of Gateway to secure a $280,819 promissory note. After the

Floyds defaulted and failed to cure, Gateway accelerated the debt and noticed the

property for a nonjudicial foreclosure sale that was scheduled to occur between noon

and 3:00 p.m. on August 6, 2019.

      The morning of the sale, Floyd sued Gateway alleging that it (1) had failed to

provide him with a breakdown of the fees it alleged were due; (2) had not provided

him with a default notice before foreclosure; (3) had misapplied payments; and (4) had

not followed “all required steps in the foreclosure process under Texas state law.”

Floyd further alleged that Gateway had violated the Fair Debt Collection Practices

Act, Texas consumer laws, and the Real Estate Settlement Procedures Act. Floyd

prayed for delivery of “requested documents,” a temporary restraining order,

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preliminary injunctive relief, and monetary relief “as allowed by [t]he FDCPA and

Texas Consumer Law.”

       With his original petition, Floyd filed an application for a TRO and a

temporary injunction. In his application, Floyd re-alleged that Gateway had violated

various statutes and claimed that Gateway was attempting to wrongfully foreclose on

his residence. Around 11:30 a.m. on the day of the foreclosure sale, the trial court

granted Floyd’s TRO application and ordered Gateway to “cease all collection activity

against [Floyd]” and “cease all foreclosure sale proceedings against [Floyd].” Despite

the TRO, the foreclosure sale went forward, with Gateway purchasing the property at

the foreclosure sale for about $300,000. 1

       Just over a week after the sale, Gateway moved (1) to dissolve the TRO; (2) to

dismiss Floyd’s petition for lack of subject-matter jurisdiction or, alternatively,

because it had no basis in law or fact; and (3) for sanctions. See Tex. R. Civ. P. 13, 91a.

Gateway asserted that the trial court lacked jurisdiction because the amount in

controversy exceeded the $200,000 jurisdictional limit for statutory county courts. See

Act of June 29, 2011, 82d Leg., 1st C.S., ch. 3, § 4.02, sec. 25.0003(c), 2011 Tex. Gen.

Laws 5206, 5211–12 (amended 2019) (current version at Tex. Gov’t Code Ann.

       1
        According to Gateway, it had no actual knowledge of the TRO at the time of
the foreclosure sale. Floyd called the substitute trustee’s office shortly after noon on
the day of the sale to advise Gateway that he had obtained the TRO. The substitute
trustee sold the property at 1:06 p.m. A few minutes later, Floyd emailed and faxed
copies of his petition, his TRO application, and the TRO to the substitute trustee’s
office.

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§ 25.0003(c)) (providing that statutory county courts have concurrent jurisdiction with

district courts in civil cases in which the matter in controversy “exceeds $500 but does

not exceed $200,000, excluding interest, statutory or punitive damages and penalties,

and attorney’s fees and costs, as alleged on the face of the petition”).2 Gateway

supported its motion with evidence establishing the note’s principal amount and the

foreclosure-sale price.

       After a hearing, the trial court found that “[t]he matter in controversy exceeds

the jurisdictional limits of th[e] Court,” and on that basis, dissolved the TRO, granted

Gateway’s dismissal motion, and dismissed the case with prejudice.

       Floyd has appealed and raises three issues: (1) the trial court heard Gateway’s

Rule 91a motion less than 21 days after it was filed; (2) at the hearing, Floyd was not

allowed to present evidence or to speak, “[o]ther than to say that he didn’t agree with

having the hearing at that time”; and (3) Gateway violated the TRO by foreclosing on

the property. 3

       Effective September 1, 2020, the amount-in-controversy limit was increased to
       2

$250,000. See Act of May 26, 2019, 86th Leg., R.S., ch. 696, S.B. 2342, §§ 2, 37. This
amendment does not apply here because it was not in effect at the time Floyd sued
Gateway in August 2019. See id. § 36.

       Shortly before Floyd filed his brief, Gateway moved to dismiss the appeal. We
       3

deny the motion.

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                   The Trial Court’s Subject-Matter Jurisdiction

      In the trial court, Gateway asserted that the trial court lacked jurisdiction

because the amount in controversy exceeded that court’s $200,000 jurisdictional limit.

The trial court agreed and thus dismissed the case for lack of jurisdiction. Although

Floyd does not expressly challenge this ruling on appeal, we must sua sponte address

the issue of whether the trial court has subject-matter jurisdiction over the case

because our jurisdiction over a case’s merits is no greater than that of the court from

which the appeal was taken.4 See DeWolf v. Kohler, 452 S.W.3d 373, 382 (Tex. App.—

Houston [14th Dist.] 2014, no pet.) (“A court is obliged to determine whether it has

subject-matter jurisdiction and must consider the question sua sponte even if it is not

challenged by a party.”); In re A.K.A., No. 05-13-00640-CV, 2014 WL 3845776, at

*2 (Tex. App.—Dallas Aug. 6, 2014, pet. denied) (mem. op.) (“An appellate court’s

jurisdiction over the merits of a case extends no further than that of the trial court

from which the appeal is taken.”); see also Pearson v. State, 315 S.W.2d 935, 938 (Tex.

1958) (“It is well settled that the jurisdiction of the appellate court as to the merits of

a case extends no further than that of the court from which the appeal is taken.”).

      4
       Whether the trial court had jurisdiction over the merits is an issue that is fairly
included in Floyd’s briefing: he complains that the trial court “erred by not allowing
evidence to be presented” (because, of course, the trial court cannot consider merits
evidence if it has no jurisdiction), and he asks for the dismissal to be reversed and the
case remanded for a new trial. See Tex. R. App. P. 38.1(f).

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       If a trial court does not have subject-matter jurisdiction, it cannot decide a

case’s merits. See Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex.

1993). Whether a trial court has subject-matter jurisdiction is a legal question that we

review de novo. See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217,

226 (Tex. 2004) (op. on reh’g).

       As the plaintiff, Floyd had the burden to affirmatively demonstrate the trial

court’s jurisdiction. See Heckman v. Williamson Cty., 369 S.W.3d 137, 150 (Tex. 2012).

When assessing a jurisdictional plea, our analysis begins with the live pleadings. Id. We

construe the pleadings liberally in the plaintiff’s favor, accept all factual allegations as

true, and look to the plaintiff’s intent. Id. We may also consider evidence submitted to

negate the existence of jurisdiction, and we must consider such evidence when

necessary to resolve the jurisdictional issue. Id.

       County courts at law are courts of limited jurisdiction. United Servs. Auto. Ass’n

v. Brite, 215 S.W.3d 400, 401 (Tex. 2007). Tarrant County has three statutory county

courts. See Tex. Gov’t Code Ann. § 25.2221(a). Their jurisdiction is prescribed by

Texas Government Code Sections 25.0003 and 25.2222. See id. §§ 25.0003, .2222.

Section 25.0003 contains a general jurisdictional grant and provides, in part, that a

statutory county court has “jurisdiction over all causes and proceedings, civil and

criminal, original and appellate, prescribed by law for county courts.” Id. § 25.0003(a).

Under this section, a statutory county court exercising concurrent jurisdiction “with

the constitutional jurisdiction of the county court has concurrent jurisdiction with the

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district court” in (1) “civil cases in which the matter in controversy exceeds $500 but

does not exceed $200,000 excluding interest, statutory or punitive damages and

penalties, and attorney’s fees and costs, as alleged on the face of the petition”; and

(2) “appeals of final rulings and decisions of the division of workers’ compensation of

the Texas Department of Insurance regarding workers’ compensation claims,

regardless of the amount in controversy.” Act of June 29, 2011, 82d Leg., 1st C.S., ch.

3, § 4.02, sec. 25.0003(c), 2011 Tex. Gen. Laws 5206, 5211–12 (amended 2019). But

Tarrant County statutory county courts’ concurrent jurisdiction is not so limited.

Section 25.2222’s specific jurisdictional grant to Tarrant County courts at law is more

expansive, providing that they have concurrent jurisdiction with district courts in

      (1) civil cases in which the matter in controversy exceeds $500 and does
      not exceed $200,000, excluding mandatory damages and penalties,
      attorney’s fees, interest, and costs;

      (2) nonjury family law cases and proceedings;

      (3) final rulings and decisions of the division of workers’ compensation
      of the Texas Department of Insurance regarding workers’ compensation
      claims, regardless of the amount in controversy;

      (4) eminent domain proceedings, both statutory and inverse, regardless
      of the amount in controversy;

      (5) suits to decide the issue of title to real or personal property;

      (6) suits to recover damages for slander or defamation of character;

      (7) suits for the enforcement of a lien on real property;

      (8) suits for the forfeiture of a corporate charter;

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      (9) suits for the trial of the right to property valued at $200 or more that
      has been levied on under a writ of execution, sequestration, or
      attachment; and

      (10) suits for the recovery of real property.

Tex. Gov’t Code Ann. § 25.2222(b).

      Neither Floyd’s pleading nor his TRO application contains a jurisdictional

statement or states an amount in controversy. Cf. Tex. R. Civ. P. 47(b), (c). Relying on

Section 25.0003(c)(1)’s general jurisdictional grant, Gateway moved to dismiss the

case for lack of subject-matter jurisdiction arguing that the trial court lacks subject-

matter jurisdiction because the note’s original principal amount (about $280,000) and

the property’s foreclosure-sale price (about $300,000) exceeded the $200,000 amount-

in-controversy limit for county courts at law. See Act of June 29, 2011, 82d Leg., 1st

C.S., ch. 3, § 4.02, sec. 25.0003(c), 2011 Tex. Gen. Laws 5206, 5211–12 (amended

2019). See generally Eris v. Giannakopoulos, 369 S.W.3d 618, 622 (Tex. App.—Houston

[1st Dist.] 2012, pet. dism’d) (“Generally, when a suit is for an interest in real

property, rather than damages, the value of the property interest at issue determines

the amount in controversy.”). But, as noted, Section 25.2222’s specific jurisdictional

grant expands the jurisdiction of Tarrant County statutory county courts. See Tex.

Gov’t Code Ann. § 25.2222(b). And if a general provision “conflicts with a specific

provision for a particular court or county, the specific provision controls.” Id.

§ 25.0001(a).

                                           8
       Section 25.2222(b)(5) gives Tarrant County courts at law jurisdiction over suits

to decide the issue of title to real property. Id. § 25.2222(b)(5). Here, Floyd sued

Gateway to stop the imminent foreclosure and pleaded that Gateway had not

followed “all required steps in the foreclosure process under Texas state law” and was

attempting to wrongfully foreclose on his residence. Construing Floyd’s pleadings

liberally in his favor, accepting all factual allegations as true, and looking to Floyd’s

intent, Floyd has alleged a wrongful-foreclosure claim against Gateway. See Heckman,
369 S.W.3d at 150. Wrongful foreclosure is an issue related to title to real property.

See, e.g., Wells Fargo Bank, N.A. v. Robinson, 391 S.W.3d 590, 593 (Tex. App.—Dallas

2012, no pet.) (explaining that a “foreclosure sale not conducted in accordance with

the terms of the deed of trust gives rise to a cause of action to set aside the sale and

the resulting trustee’s deed” and that where the noteholder “obtains title to the

property at the foreclosure sale and the borrower retains possession, the proper

remedy is to set aside the trustee’s deed and to restore the borrower’s title”); Villalon v.

Bank One, 176 S.W.3d 66, 71 (Tex. App.—Houston [1st Dist.] 2004, pet. denied)

(“The landlord-tenant relationship established in the deed of trust provided a basis for

the county court to determine that [the bank] had the right to immediate possession

without resolving whether [the bank] wrongfully foreclosed on the property, an issue relating

directly to who has title to the property.” (emphasis added)). Because this is a suit to decide

the issue of title to real property, Tarrant County Court at Law No. 1 has subject-

matter jurisdiction over the case because the jurisdiction provided by Section

                                              9
25.2222(b)(5) is based on the suit’s subject matter, not the amount in controversy. See

Tex. Gov’t Code Ann. § 25.2222(b)(5). Accordingly, the trial court erred by dismissing

Floyd’s case for lack of subject-matter jurisdiction, and we will thus reverse the trial

court’s judgment dismissing the case and remand the case to the trial court. We need

not address Floyd’s issues to the extent they are merits based. See Tex. R. App. P. 47.1.

                                      Conclusion

      Because we have determined that the trial court does, in fact, have jurisdiction

over this case, we reverse the trial court’s judgment and remand the case to the trial

court. See Tex. R. App. P. 43.2(d).

                                                      /s/ Elizabeth Kerr
                                                      Elizabeth Kerr
                                                      Justice

Delivered: March 11, 2021

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