Court Opinion

ID: 3127143
Source: CourtListenerOpinion
Date Created: 2015-10-16 15:33:27.710331+00
Date Added: 2024-06-11T10:23:10.622655
License: Public Domain

Opinion issued
August 18, 2011

In
The
Court of
Appeals
For
The
First District
of Texas
————————————
NO. 01-10-00967-CV
———————————
DAVID
POWERS HOMES, INC., Appellant
V.
M.L. RENDLEMAN COMPANY,
INC. D/B/A FIBERGLASS INSULATORS, Appellee

 

 
On Appeal from the 333rd District Court
Harris County, Texas
Trial Court Case No. 2010-44853

 

 
 
O P I N I O N
          David
Powers Homes, Inc. (“DPH”) appeals the trial court’s denial of the relief
sought in DPH’s “Ex Parte Motion for Judicial Review of Documentation or
Instruments Purporting to Create a Lien or Claim,” filed pursuant to Texas Government
Code section 51.903.  See Tex.
Gov’t Code Ann. § 51.903 (Vernon 2005). 
In its motion, DPH requested the trial court to find that certain
instruments, filed in the Harris County real property records by M.L. Rendleman Company, Inc. d/b/a Fiberglass
Insulators (“Fiberglass Insulators”), to be “fraudulent,” as defined by
Government Code section 51.901(c)(2).  See Tex.
Gov’t Code Ann. § 51.901(c)(2) (Vernon Supp. 2010).  DPH challenges the trial court’s ruling in two
issues. 
We affirm. 
Background
          Fiberglass
Insulators installed insulation in homes built by DPH and another company, DJPH.  When it was not paid for these services,
Fiberglass Insulators sued DPH and DJPH alleging, inter alia, breach of
contract.  The defendants did not answer,
and Fiberglass Insulators obtained a default judgment against DPH and DJPH for $78,736.00.  The judgment was appealed, and the portion of
the judgment awarding $78,736.00 against DPH and DJPH for breach of contract was
affirmed.[1]  Fiberglass Insulators filed a second suit against
DPH, and others, alleging, inter alia, that the defendants had engaged in
fraudulent transfers of a number of residential homes built by DHP in violation
of the Texas Uniform Fraudulent Transfers Act (“TUFTA”).
In early 2010, Fiberglass
Insulators filed 37 separate instruments in the Harris County real property
records pertaining to 37 separate parcels of real property on which
single-family residences had been constructed. 
Each was entitled “Affidavit of Notice to Potential Transferee.”  Each Affidavit provides in relevant part:
3.  The purpose of
this Affidavit is to provide notice to potential buyers of the below described
real property that the real property described below is involved in a lawsuit
in Harris County, Texas, and that, subject to the outcome of the litigation,
any future sales of the real property may be avoided by the Court.  The real property is described as follows:
 
[specific property
description]
 
4.  On January 10,
2010, M.L. Rendleman Company, Inc. d/b/a Fiberglass Insulators filed a lawsuit,
cause number 2010-02129; styled M.L. Rendleman Company, Inc. d/b/a Fiberglass
Insulators v. David Powers Homes, Inc., DJPH, LLC, d/b/a David Powers Homes,
David Powers, Individually, Powers Commercial Corporation, David Powers Homes
ST, LTD., and Rhoda J. Powers, Individually, in the 270th Judicial District
Court, Harris County Texas.  
 
5.  The current
lawsuit alleges among other things that the real property described above was
transferred in violation of Chapter 24 of the Texas Business and Commerce Code,
otherwise known as the Uniform Fraudulent Transfer Act.  One of the remedies expressly allowed under
the Texas Fraudulent Transfer Act, is avoidance of the transfer.  Accordingly, this affidavit provides notice
that a transfer of the real property described above may be avoided by the
Court in the above-referenced lawsuit.  
 
          DPH filed a verified
“Ex Parte Motion for Judicial Review
of Documentation or Instruments Purporting to Create a Lien or Claim” (“Motion
for Judicial Review”).  DPH asserted that
it was filing the motion “under Section 51.903(a) of the Texas Government Code
to request a judicial determination of the status of documentation or
instruments purporting to create an interest in real or personal property . . .
filed in the office of the Clerk of Harris County, Texas.”  In this regard, DPH identified each of the 37
Affidavits filed by Fiberglass Insulators in the Harris County real property
records.  DPH also attached the
Affidavits to the motion.  
          DPH asserted
that the Affidavits “purport to have created a lien on real or personal
property or an interest in real or personal property arising out of a debt owed
by David Powers Homes, Inc.”  DPH alleged
that “the documentation or instruments attached hereto are fraudulent, as
defined by Section 51.901(c)(2), Government Code, and that the documentation or
instruments should therefore not be accorded lien status.”  DPH was clear that it did not “request the
Court to make a finding as to any underlying claim of the parties involved and
acknowledges that this motion does not seek to invalidate a legitimate lien.”
          The trial
court ruled on DPH’s Motion for Judicial Review in its “Judicial Finding of
Fact and Conclusion of Law Regarding Documentation or Instruments Purporting to
Create a Lien or Claim” (“Judicial Finding and Conclusion”).  The trial court stated that it had reviewed
DPH’s verified Motion for Judicial Review and the complained-of Affidavits
filed by DPH.  In its Judicial Finding
and Conclusion, the trial court stated, “No testimony was taken from any party,
nor was there any notice of the Court’s review, the Court having made the
determination that a decision could be made solely on review of the
documentation or instruments under the authority vested in the Court under
Subchapter J, Chapter 51, Government Code.”       
The trial court determined, inter
alia, that the Affidavits filed by Fiberglass Insulators in the real property
records were “provided for by specific state or federal statutes or
constitutional provisions.”  By making
this determination, the trial court rejected DPH’s allegation that the
Affidavits were “fraudulent,” as defined by Government Code section
51.901(c)(2).  The trial court clarified
that it made “no finding as to any underlying claims of the parties involved,
and expressly limits its finding of fact and conclusion of law to the review of
a ministerial act.”
          Presenting
two issues, DPH appeals the trial court’s determination that the Affidavits are
not fraudulent because they are “provided for by specific state or federal
statutes or constitutional provisions.”  See Tex.
Gov’t Code Ann. § 51.903(c) (providing
that “[a]n appellate court shall expedite review of a court’s finding under
this section”).  
 
 
Subject-Matter Jurisdiction
As a threshold issue, we address Fiberglass
Insulators’s claim that this appeal should be dismissed for lack of
subject-matter jurisdiction.  It first asserts
that DPH lacks standing under Government Code section 51.903 to challenge the
Affidavits as being fraudulent.  Fiberglass
Insulators also asserts lack of subject-matter jurisdiction because “the issue
before the Court is moot.”  
A.      Governing Statutory Provisions 
          Government Code section
51.903, entitled “Action on Fraudulent Lien on Property,” provides in subsection
(a) as follows:
(a) A person who is the purported debtor or obligor or
who owns real or personal property or an interest in real or personal property
and who has reason to believe that the document purporting to create a lien or
a claim against the real or personal property or an interest in the real or
personal property previously filed or submitted for filing and recording is
fraudulent may complete and file with the district clerk a motion, verified by
affidavit by a completed form for ordinary certificate of acknowledgment, of
the same type described by Section 121.007, Civil Practice and Remedies Code,
that contains, at a minimum, the information in the following suggested form:
 
 

In Re: A Lien or Claim
Against (Name of Purported Debtor)
 
 
MISC.
DOCKET NO. ________
 
In the _______ Judicial District
 
In and For ________________
County Texas
 

 
Motion for
Judicial Review of Documentation or Instrument Purporting to Create a Lien or
Claim 
 
Now Comes (name) and files this motion requesting a judicial
determination of the status of documentation or an instrument purporting to
create an interest in real or personal property or a lien or claim on real or
personal property or an interest in real or personal property filed in the
office of the Clerk of (county name) County, Texas, and in support of the
motion would show the court as follows:
 
I.
 
(Name), movant herein, is the purported obligor or debtor
or person who owns the real or personal property or the interest in real or
personal property described in the documentation or instrument.
 
II.
 
On (date), in the exercise of the county clerk’s official
duties as County Clerk of (county name) County, Texas, the county clerk
received and filed and recorded the documentation or instrument attached hereto
and containing (number) pages.  Said
documentation or instrument purports to have created a lien on real or personal
property or an interest in real or personal property against one (name of
purported debtor).
 
III.
 
Movant alleges that the documentation or instrument
attached hereto is fraudulent, as defined by Section 51.901(c)(2), Government
Code, and that the documentation or instrument should therefore not be accorded
lien status.
 
IV.
 
Movant attests that assertions herein are true and
correct.
 
 
 
 
V.
 
Movant does not request the court to make a finding as to
any underlying claim of the parties involved and acknowledges that this motion
does not seek to invalidate a legitimate lien. Movant further acknowledges that
movant may be subject to sanctions, as provided by Chapter 10, Civil Practice
and Remedies Code, if this motion is determined to be frivolous.
 
PRAYER
 
Movant requests the court to review the attached
documentation or instrument and enter an order determining whether it should be
accorded lien status, together with such other orders as the court deems
appropriate.
 
Respectfully submitted,
 
_________________________
(Signature and typed name and address)
 
Tex. Gov’t Code Ann. § 51.903(a).  
The movant may attach the
allegedly fraudulent documentation or instrument to the motion.  See id.
 Section 51.903 further provides, “The
court’s finding may be made solely on a review of the documentation or
instrument attached to the motion and without hearing any testimonial evidence.
 The court’s review may be made ex parte
without delay or notice of any kind.”  Id. § 51.903(c).
For purposes of a section
51.903 action, a fraudulent document or instrument is defined as (1) a document
or instrument that “is not a document or instrument provided for by the
constitution or laws of this state or of the United States”; (2) a document or
instrument “not created by implied or express consent or agreement of the
obligor, debtor, or the owner of the real or personal property or an interest
in the real or personal property . . ., or by implied or express consent or
agreement of an agent, fiduciary, or other representative of that person”; or
(3) a document or instrument that “is not an equitable, constructive, or other
lien imposed by a court with jurisdiction created or established under the
constitution or laws of this state or of the United States.”  Id.
§ 51.901(c)(2); see id. § 51.903(a).  Thus, if a trial court finds that a document
or instrument is provided for by state or federal law or constitutional
provision, the court has determined that the document or instrument is not
fraudulent.  See id. § 51.901(c)(2); see
also id. § 51.903(a).  
B.      Mootness and Standing: Legal Principles 
Whether a court has subject matter
jurisdiction is a legal question that is reviewed de novo.  Tex.
Natural Res. Conservation Comm’n v. IT–Davy, 74 S.W.3d 849, 855 (Tex. 2002);
see Mayhew v. Town of Sunnyvale, 964
S.W.2d 922, 928 (Tex. 1998).  Standing is
a component of subject-matter jurisdiction. 
Tex. Ass’n of Bus. v. Tex. Air
Control Bd., 852 S.W.2d 440, 445–46
(Tex. 1993); see also DaimlerChrysler
Corp. v. Inman, 252 S.W.3d 299, 304 (Tex. 2008) (“A court has no
jurisdiction over a claim made by a plaintiff without standing to assert it.”).
 If a party lacks standing to bring an
action, the trial court lacks subject-matter jurisdiction to hear the
case.  Tex. Ass’n of Bus., 852 S.W.2d at 444–45.  
“[S]tanding focuses on the question
of who may bring an action.”  Patterson v. Planned Parenthood, 971
S.W.2d 439, 442 (Tex. 1998).  The general
test for standing is whether there is a real controversy between the parties
that will actually be determined by the judgment sought.  Tex.
Ass’n of Bus., 852 S.W.2d at 446.  “To
establish standing, a person must show a personal stake in the controversy.”  In re
B.I.V., 923 S.W.2d 573, 574 (Tex. 1996). 

          Standing to
sue may be predicated upon either statutory or common law authority.  Nauslar
v. Coors Brewing Co., 170 S.W.3d 242, 252 (Tex. App.—Dallas 2005, no pet.);
see Williams v. Lara, 52 S.W.3d 171, 178–79 (Tex. 2001). 
The common law standing rules apply except when standing is statutorily
conferred.  SCI Tex. Funeral Servs., Inc. v. Hijar, 214 S.W.3d 148, 153 (Tex.
App.—El Paso 2007, pet. denied).
The mootness doctrine also implicates
subject-matter jurisdiction.  Hernandez-Perez v. State, No.
01-09-00801-CR, 2010 WL 2133935, at *1 (Tex. App.—Houston [1st Dist.] May 27, 2010, no pet.) (mem.
op.) (citing Trulock v. City of
Duncanville, 277 S.W.3d 920, 923 (Tex. App.—Dallas 2009, no pet.)).  A case is moot if a controversy ceases to
exist or the parties lack a legally cognizable interest in the outcome.  Allstate
Ins. Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005).  When a case becomes moot, the parties lose
standing to maintain their claims.  Williams, 52 S.W.3d at 184.
C.      Analysis of Jurisdictional Challenges
Fiberglass Insulators asserts that
DPH lacks standing to challenge the Affidavits because the Affidavits do not
expressly identify DPH as a debtor or obligor.  Here, the Affidavits state that Fiberglass
Insulators has sued DPH alleging that DPH and others have engaged in the
fraudulent transfer of the real property identified in each Affidavit.  It is undisputed that DPH is a judgment debtor
of Fiberglass Insulators and that the suit identified in the Affidavits arises
from DPH’s status as such.  In short, it
is undisputed that Fiberglass Insulators alleges that DPH owes it money as a
judgment debtor and that the second suit is brought to aid in the collection of
that debt. 
Government Code 51.903 provides, 
A person who is the purported debtor or obligor . . . and
who has reason to believe that the document purporting to create a lien or a
claim against the real or personal property or an interest in the real or
personal property previously filed or submitted for filing and recording is
fraudulent may complete and file with the district clerk a motion, verified by
affidavit . . . .
 
Tex. Gov’t Code Ann.
§ 51.903(a).  Here, the Affidavits and
the undisputed facts, as discussed in Fiberglass Insulators’s brief, serve to
identify DPH as a purported debtor or obligor of Fiberglass Insulators.  Thus, DPH has standing to challenge the
Affidavits.  See id.  
Fiberglass Insulators also asserts
that this Court lacks subject-matter jurisdiction because “the issue before the
Court is moot.”  Fiberglass Insulators
contends, in short, that there is neither a live controversy nor a party with
“a legally cognizable interest in the outcome.” 
In this regard, Fiberglass Insulators contends, “DPH never owned any of
the properties at issue in the Affidavits, and all the properties are currently
owned by third parties not subject to this appeal or fraudulent transfer
action.”  Fiberglass Insulators asserts
that “[e]ach of the 36 [sic] properties on which the Affidavits were filed by
Fiberglass Insulators has since been sold or transferred to third
parties.”  In support of this assertion,
Fiberglass Insulators has attached documents to its brief that are not a part
of the appellate record.  
Fiberglass Insulators’s argument does
not support a conclusion that DPH’s claims are moot.  As mentioned, Government Code section 51.903
permits persons who are identified in the instrument as debtors or obligors to
bring an action for judicial review of the instrument.  See
id.  Ownership of the real property
identified in the instrument is not a prerequisite to maintain the action.  Thus, DPH’s lack of ownership of the property
does not render the appeal moot.  See id.
Fiberglass Insulators further
asserts that the appeal is moot because “there is no evidence provided in the
record, or otherwise, that the Affidavits caused any damages to DPH” or to any
other party.  This argument also
fails.  To maintain an action for
judicial review of an instrument purporting to create a lien or claim, section
51.903 does not require the plaintiff to assert or to show damages.  See
id.  Thus, a failure to prove damages
does not render the appeal moot.  
Validity of Trial Court’s Finding
          In its first
issue, DPH contends that the trial court “erred in finding that the Affidavits
are provided for by the constitution or laws of Texas or the United States” and,
as a result, are not “fraudulent” as defined in Government Code
section 51.901.
A.      Standard of Review 
          We agree with
DPH that the appropriate standard of review of the trial court’s finding that
the Affidavits are not fraudulent is de novo review.  Here, the trial court was not charged with
making actual fact determinations; that is, there were no disputed facts before
the trial court.  The contents of the
Affidavits are undisputed.  The trial
court properly considered no other evidence in making its finding.  See id.
§ 51.903(c) (providing that court may determine whether instruments or
documents are “fraudulent” based “solely on review of the documentation or
instrument attached to the motion and without hearing any testimonial
evidence”).  Instead, the trial
court was charged with determining whether the Affidavits attached to DPH’s
Motion for Judicial Review are “fraudulent,” as defined in Government Code
section 51.901.  
Whether the Affidavits are
“fraudulent,” as statutorily defined, is a question of law.  See
State ex rel. Dep’t of Criminal Justice v. VitaPro Foods, Inc., 8 S.W.3d
316, 323 (Tex. 1999) (stating, in agricultural commodity case, that when facts
are undisputed, whether something meets statutory definition at issue is
question of law); Univ. of Tex. v.
Poindexter, 306 S.W.3d 798, 810
(Tex. App.—Austin 2009, no pet.) (explaining that issue of whether letters to
EEOC were adequate to allege retaliation or could reasonably be expected to
give rise of an investigation of retaliation were questions of law, when
contents of letters were undisputed); Odessa
Tex. Sheriff’s Posse, Inc. v. Ector County, 215 S.W.3d 458, 472 (Tex. App.—Eastland 2006, pet. denied) (stating
that, because facts were undisputed as to content of notice under Open Meetings
Act, determination of adequacy of notice was question of law).  We review questions of law de novo.  Stockton
v. Offenbach, 336 S.W.3d 610, 615 (Tex. 2011).  Thus, we apply the de novo standard in this
appeal.
B.      Statutory Provision for Affidavits of
Notice to Potential Transferees
          The
parties agree that the central issue is whether the trial court erred when it
determined that the Affidavits of Notice to Potential Transferees are provided
for by specific state or federal statute or constitutional provision, an
implicit determination that the Affidavits are not fraudulent.  DPH first focuses on the title of the
instruments at issue here: “Affidavits of Notice to Potential Transferees.”  DPH contends that its “computerized legal
research” did not locate any state or federal statutory or constitutional
provision authorizing the filing of a document so named.  
Although the title of a
document may in some instances have some bearing on a court’s determination of
whether the document is provided for by the constitution or laws of Texas or
the United States, it is the substance of the document that determines whether
it is fraudulent.  By analogy, courts
look to the substance of a motion or a pleading, rather than its caption or
format, to determine the nature of the filing. 
See State Bar of Tex. v. Heard,
603 S.W.2d 829, 833 (Tex. 1980) (explaining that “[w]e look to the substance of
a plea for relief to determine the nature of the pleading, not merely at the
form of title given to it”).  In the present context, it will be the
substance, not the title, of the document or instrument that creates a lien or a
claim against property.  Thus, it follows
that the substance of the instrument or document should be the focus in
determining whether it is provided for by a state or federal statute or
constitutional provision.
Here, Fiberglass Insulators contends
that the Affidavits are provided for by Texas statute.  It points out that the Affidavits contain the
required elements of a notice of lis pendens, as set forth in Property Code
section 12.007.  See Tex. Prop. Code Ann. §
12.007 (Vernon Supp. 2010).  
“[D]uring the pendency of an action
involving title to real property, the establishment of an interest in real
property, or the enforcement of an encumbrance against real property,” a party
seeking affirmative relief may file a lis pendens in the real property records
of the county where the property is located.  Tex.
Prop. Code Ann. § 12.007(a) (Vernon 2004).  Generally speaking, the purpose of lis pendens
notice is twofold: (1) to protect the filing party’s alleged rights to the
property that is in dispute in the lawsuit and (2) to put those interested in
the property on notice of the lawsuit.  See World Sav. Bank, F.S.B. v. Gantt,
246 S.W.3d 299, 303 (Tex. App.—Houston
[14th Dist.] 2008, no pet.); see also Countrywide
Home Loans, Inc. v. Howard, 240 S.W.3d 1, 4 (Tex. App.—Austin 2007, pet.
denied).  A lis pendens does not prevent
conveyance; it merely puts the purchaser on notice as to the status of the
land.  See Collins v. Tex Mall, L.P.,
297 S.W.3d 409, 418 (Tex. App.—Fort
Worth 2009, no pet.).
          The notice
must contain certain information, including (1) the style and cause number of
the proceedings, (2) the court where it is pending, (3) the names of the
parties, (4) identification of the kind of proceedings, and (5) a description
of the property affected. Tex. Prop.
Code Ann. § 12.007(b).  A properly
filed lis pendens is not itself a lien; rather it operates as constructive
notice “to the world of its contents.”  See Tex.
Prop. Code Ann. § 13.004(a) (Vernon 2004); see also B & T Distribs., Inc. v. White, 325 S.W.3d 786, 789
(Tex. App.—El Paso
2010, no pet.).
          To reiterate,
each Affidavit filed by Fiberglass Insulators provides in relevant part:
3.  The purpose of
this Affidavit is to provide notice to potential buyers of the below described
real property that the real property described below is involved in a lawsuit
in Harris County, Texas, and that, subject to the outcome of the litigation,
any future sales of the real property may be avoided by the Court.  The real property is described as follows:
 
[specific property
description]
 
4.  On January 10,
2010, M.L. Rendleman Company, Inc. d/b/a Fiberglass Insulators filed a lawsuit,
cause number 2010-02129; styled M.L. Rendleman Company, Inc. d/b/a Fiberglass
Insulators v. David Powers Homes, Inc., DJPH, LLC, d/b/a David Powers Homes,
David Powers, Individually, Powers Commercial Corporation, David Powers Homes
ST, LTD., and Rhoda J. Powers, Individually, in the 270th Judicial District
Court, Harris County Texas.  
 
5.  The current
lawsuit alleges among other things that the real property described above was
transferred in violation of Chapter 24 of the Texas Business and Commerce Code,
otherwise known as the Uniform Fraudulent Transfer Act.  One of the remedies expressly allowed under
the Texas Fraudulent Transfer Act, is avoidance of the transfer.  Accordingly, this affidavit provides notice
that a transfer of the real property described above may be avoided by the
Court in the above-referenced lawsuit.  
 
          In its reply
brief, DPH acknowledges that the Affidavits contain the information statutorily
required for a notice of lis pendens.  Indeed,
the Affidavits (1) set forth the style and cause number of the proceedings, (2)
provide the name the court where it is pending, (3) state the names of the
parties, (4) identify the kind of proceedings, and (5) provide a description of
the property affected.  See Tex.
Prop. Code Ann. § 12.007(b). 

Nonetheless, DPH contends that the
Affidavits “are qualitatively different from lis pendens, and so much so that
they manifestly are not the type of filing authorized by the lis pendens
statute.”  DPH asserts that the
Affidavits “are qualitatively different from lis pendens” because the Affidavits
contain information in addition to what is required by the lis pendens statute.  DPH argues that the “additional content” in
the Affidavits does not serve to give notice “of a pending lawsuit that impacts
title to real property” but instead “serve[s] as a warning” that the properties
identified in the Affidavits “are off limits to new buyers that do not want to
be sued.”  DPH asserts that the
Affidavits are not the type of notice authorized by the lis pendens statute;
rather, they are a form of “economic terrorism” designed to dissuade purchasers
from buying the property identified in the Affidavits.  
To support this assertion, DPH
contends that the statement in the Affidavits that a transfer of the real
property described in the Affidavit may “be avoided by the Court” pursuant to TUFTA
is a “false [statement] under the substantive law.”  DPH asserts that the statement is legally
incorrect with respect to the transfer of the properties identified in the
Affidavits; that is, the transfers would not be avoided pursuant to the TUFTA as
represented by Fiberglass Insulators in the Affidavits.  
We agree with Fiberglass Insulators
that DPH’s contentions exceed the scope of Government Code sections 51.901 and
51.903.  Section 51.903 limits the trial
court’s determination to whether the document or instrument is fraudulent as
defined by section 51.901.  See Tex.
Gov’t Code Ann. § 51.903(a), (g). 
The court may not rule on the validity of the underlying lien itself or
claim between the parties.  See In re Purported Liens or Claims Against
Samshi Homes, L.L.C., 321 S.W.3d 665, 667 (Tex. App.—Houston [14th Dist.]
2010, no pet.); Becker v. Tropic Isles
Ass’n, No. 13-08-00559-CV, 2010 WL 877569, at *3 (Tex. App.—Corpus Christi
Mar. 11, 2010, pet. denied) (mem. op.). 
As explained by the Amarillo Court of Appeals,
By continually mentioning the document or instrument
itself and alluding to the limited nature of the decision, the statute [section
51.903] was intended to address not the validity of the purported lien or
interest in the property but the legitimacy of the document manifesting the
purported lien or interest.  Thus, the
court is not to adjudicate whether the lien or interest is legitimate but only
whether the documents are.
 
In
re Hart, No. 07-98-0292-CV, 1999 WL 225956, at *2 (Tex. App.—Amarillo Apr. 15, 1999, no pet.)
(not designated for publication).  
The legislative history of
Government Code section 51.903 supports this view.  Section 51.903 was enacted as part of House
Bill 1185, passed in 1997.  See Act of May 10, 1997, 75th Leg.,
R.S., Ch. 189, § 14, sec. 51.903, 1997 Tex.
Sess. Law. Serv. 1045, 1053 (current version at Tex. Gov’t Code Ann. § 51.903 (Vernon 2005)).  The Senate’s Bill Analysis explains the impetus
behind the passage of Bill 1185, as follows:
Currently, individuals and organizations have begun to
take action based on their refusal to recognize the authority and sovereignty
of the government of the State of Texas. 
These entities have filed fraudulent judgment liens issued by so-called
“common law courts” and fraudulent documents purporting to create liens or
claims on personal and real property with the secretary of state and many
county and district court clerks throughout the state.  Many of the filings have been against the
State of Texas and public officers and employees, as well as private
individuals.  These filings have clogged
the channels of commerce and have amounted to harassment and intimidation of
both public officials and ordinary citizens. 
This bill provides both civil and criminal remedies for those against
whom such fraudulent filings have been made. . . .  This
bill creates an expedited judicial process that permits someone aggrieved by
the fraudulent filing to obtain an expedited legal process to obtain a court
order declaring the filing to be fraudulent. . . . 
 
Senate Research Ctr., Bill
Analysis, Tex. H.B.
1185, 75th Leg., R.S. (1997) (emphasis added). 
The legislative history of section 51.903 shows that it was enacted as
part of a statutory scheme to quickly identify and remove liens and
encumbrances that are on their face patently without basis in recognized
law.  Thus, the bill analysis supports
the view that the statute was not created to determine the legitimacy and
validity of the claimed interest in the property, but was instead enacted
to expeditiously determine the legitimacy of the document manifesting the
purported lien or interest.  
The opinion in Samshi Homes illustrates the application
of these principles.  321 S.W.3d at 667–68. 
There, Samshi Homes, the owner of five parcels of real property, filed a
motion pursuant to Government Code section 51.903, asserting that lien claims
filed against the properties by Jesse De Leon were fraudulent as defined by section
51.901(c)(2).  Id. at 666.  The trial court
denied Samshi Homes’s motion, and it appealed.  Id.
On appeal, Samshi Homes acknowledged
that the instruments in question were attempts to create mechanic’s liens pursuant
to Property Code section 53.054.  Id. at 667.  Nonetheless, Samshi Homes
argued that “the instruments did not meet the requirements of that section
because they did not provide (1) ‘the name and last known address of the owner
or purported owner,’ or (2) ‘a general statement of the kind of work done and
materials furnished by the claimant.’”  Id.  Samshi
Homes also asserted that it had proven through affidavit testimony that it never
had an agreement with De Leon.  Id.  It
further pointed out De Leon had misidentified the owner of the properties in
the lien instruments as Vinay Karna and asserted that because De Leon did not
allege an agreement with Samshi Homes, the true owner of the properties, the lien
claims were fraudulent.  Id.
In its opinion, the court of appeals
explained that Samshi Homes’ contentions fall into two categories.  Id.  The first category was “those challenging
whether De Leon’s instruments fulfilled the requirements of section 53.054(a)
(i.e., name and address of owner and general statement of work and materials).”
 Id.  The second category was “those raising
substantive evidentiary issues (i.e., that Karna did not own the property and
did not contract with De Leon).”  Id.  
The court concluded, “All of Samshi
Homes’ contentions . . . go beyond the scope of sections 51.901 and 51.903 of
the Government Code.”  Id.  It
explained, “In a proceeding pursuant to those sections, a trial court is
limited to determining whether a particular instrument, or instruments, is
fraudulent as therein defined; it may not rule on the validity of the
underlying lien itself or other claims between the parties.”  Id. (citing
Tex. Gov’t Code Ann. § 51.903(a),
(g)); Becker, 2010 WL 877569, at *3; Hart, 1999 WL 225956, at *2).  The court reasoned that because Samshi Homes
acknowledged that the documents filed by De Leon were in the form of mechanics
liens, the documents were instruments “provided by the . . . laws of
this state” and were “therefore not presumed to be fraudulent under section
51.901(c)(2)(A).”  Id.  The court concluded, “Samshi
Homes[’s] complaints based on section 53.054 are therefore beyond the scope of
the current proceedings.”  Id. at 668.
The court further concluded that “Samshi
Homes’ substantive evidentiary claims—that it, rather than Karna, owned the
subject properties and that Karna never entered into an agreement with De
Leon—are also beyond the scope of the section 51.903 proceedings.”  Id. (citing
Becker, 2010 WL 877569, at *3
(holding that movant converted his Motion for Judicial Review into an action
seeking declaratory judgment by requesting rulings on underlying rights of the parties)).
          Although it
is factually distinct from the instant case, Samshi Homes provides guidance in the application of the
controlling principles.  Samshi Homes also illustrates that the
determination to be made in a section 51.903 proceeding is a narrow one.  
Here, DPH does not dispute that the
Affidavits contain all of the information required in Property Code section
12.007(b) to constitute a notice of lis pendens.  Instead, DPH contends that the Affidavits contain
too much information, namely, that a transfer of the real property described in
the affidavit may be avoided by the court in the pending lawsuit pursuant to
TUFTA.  DPH intimates that this
additional information transforms the Affidavits from a notice of lis pendens
into a coercive threat levied for the purpose of harming DPH economically.  It asserts this is demonstrated by Fiberglass
Insulators’s purported misstatement of the law that any transfers of the
property may be avoided under TUFTA.  DPH
further asserts that Fiberglass Insulators’s ill motives in filing the
Affidavits are shown by its failure to request that any property transfers be
set aside in the lawsuit identified in the Affidavits.[2]  
For us to agree with DPH, we would have
to ignore that the Affidavits contain all the statutory requirements of a
notice of lis pendens.  See Tex.
Prop. Code Ann. 12.007(b).  We
would also have to focus solely on the provision of the Affidavits warning
potential purchasers of the possibility that the property transfer might be set
aside.  And we would have to read
subjective ill motives into Fiberglass Insulators’s inclusion of the additional
information regarding its possible remedy in the lawsuit identified in the
Affidavits.  DPH provides us with no
authority to view the Affidavits in such a manner or to penalize a party
asserting a claim in property for including information beyond that which is
required to assert the claim.  Such a
reading of the Affidavits would require us to exceed the scope of what is
permitted by Government Code sections 51.901 and 51.903.  See
Samshi Homes, 321 S.W.3d at 667. 
Moreover, DPH’s claim that TUFTA does not provide for avoidance
of a property transfer under the circumstances presented and its assertion that
Fiberglass Insulators has not requested an avoidance of the property transfers
are also matters that go beyond the scope of a section 51.903 proceeding.  Assertions such as these cannot be considered
in determining whether the Affidavits are fraudulent as defined in section
51.901 but are more appropriately raised in other types of legal actions.  See id.  
For example, a party to an
action in connection with which a notice of lis pendens has been filed may
apply to the court in which the action is pending to expunge the notice.  See Tex. Prop. Code Ann. § 12.0071(a)
(Vernon Supp. 2010).  The court must
grant the motion if (1) “the pleading on which the notice is based does not
contain a real property claim,” or (2) “the claimant fails to establish by a
preponderance of the evidence the probable validity of the real property
claim.” Tex. Prop. Code Ann. §
12.0071(c).
We conclude that because the
Affidavits contain all of the information statutorily required to constitute a
notice of lis pendens, the Affidavits filed by Fiberglass Insulators are
instruments “provided for by the . . . laws of this state” and are therefore
presumed not to be fraudulent under section 51.901(c)(2)(A).  See
Samshi Homes, 321 S.W.3d at 667. 
We hold that the trial court did not err in finding that the
Affidavits are specifically provided for by specific state or federal statutes
or constitutional provisions, and as a result, are not “fraudulent”
as defined in Government Code section 51.901.[3]  
We overrule DPH’s first
issue.
Specificity of Finding
          In its second
issue, DPH complains that the trial court did not identify the specific state
or federal statute or constitutional provision that permits the filing of the
Affidavits.  DPH acknowledges that the
trial court’s Judicial Finding and Conclusion “complies with § 51.903(e) and is
in the form prescribed by § 51.903(g).” 
DPH writes, “Since DPH submitted the form of the Finding with the
Motion, it does not contend that the trial court erred in using the form.”  Instead, DPH suggests that we “should instruct
the district court that, on a determination that a document is provided for by
the constitution or laws of Texas or the United States, the source should be
specifically identified.”  It states that
this will “ensure efficient and effective review of future findings.”  
          We have no
jurisdiction to render advisory opinions.  Tex. Ass’n
of Bus., 852 S.W.2d at 444.  Courts
do not function to determine questions not essential to the decision of an
actual controversy, even if such questions may, in the future, require
adjudication. McKenzie v. McKenzie,
667 S.W.2d 568, 570 (Tex. App.—Dallas
1984, no writ).  Thus, we cannot consider
DPH’s request.
          We overrule
DPH’s second issue. 
Conclusion
          We
affirm the judgment of the trial court.
 
 
 
Laura Carter Higley
                                                                   Justice

 
Panel consists of
Justices Keyes, Higley, and Hinde.[4]

[1]           See
Powers v. M. L. Rendleman Co.. Inc. d/b/a Fiberglass Insulators, No.
14-09-00814-CV, 2010 WL 4216472 (Tex. App.—Houston [14th Dist.] Oct. 26, 2010, no pet.) (mem.
op.).

[2]           DPH informs this Court that district
courts in Fort Bend, Galveston, and Montgomery Counties have found similar
affidavits filed by Fiberglass Insulators to be “fraudulent” documents—as defined by section
51.901—in section
51.903 proceedings instituted by DPH in those courts.  DPH attaches certified copies of the judicial
findings and conclusions from those proceedings and requests this Court to take
judicial notice of those findings.  The
findings from the other district courts were not provided to the trial court in
this case.  Our review of the trial court’s
ruling, although de novo, is limited by the record before us.  See Hinojosa
Auto Body & Paint, Inc. v. Finishmaster, Inc., No. 03-08-00361-CV, 2008
WL 5210871, *5 (Tex. App.—Austin 2008, Dec. 12, 2008, no pet.) (mem. op.)
(stating that review on appeal of trial court’s grant of summary judgment,
although de novo, is limited by the record before appellate court).  Even assuming that we take judicial notice of
the findings by the various district courts, DPH fails to explain how the
findings appropriately influence the determination of whether the Affidavits in
this case are fraudulent.  Nothing in the
statutory scheme provides for consideration of such information in determining
whether a document or instrument is fraudulent. 
Under the statute, a court may make its determination based on a review
of the instrument itself without considering other evidence.  See In re Purported Liens or Claims Against Samshi
Homes, L.L.C., 321 S.W.3d 665, 666 (Tex. App.—Houston [14th Dist.] 2010, no
pet.).  Moreover, a court is limited to
determining whether an instrument is fraudulent as defined under the statute
and may not rule on other claims between the parties.  See id.
at 667.  Thus, we decline to consider
the findings in our determination of whether the trial court erred when it
determined that the Affidavits were not fraudulent.  See Tex. Gov’t Code Ann. § 51.903 (Vernon 2005).
 

[3]           Our holding is limited to our
determination that the trial court properly denied DPH’s “Ex Parte Motion for Judicial Review of
Documentation or Instruments Purporting to Create a Lien or Claim,” filed
pursuant to Texas Government Code section 51.903.  See Tex. Gov’t Code Ann. § 51.903. We
make no determination whether the Affidavits are properly filed notices of lis
pendens or whether Fiberglass Insulators has a valid interest in the real
property identified in the Affidavits.

[4]           The Honorable Dan Hinde, Judge of the 269th
District Court of Harris County, participating by assignment.