Court Opinion

ID: 2896365
Source: CourtListenerOpinion
Date Created: 2015-09-08 00:43:17.170022+00
Date Added: 2024-06-11T11:36:49.983525
License: Public Domain

NO. 07-07-0305-CV

                              IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                      AT AMARILLO

                                         PANEL E

                                  NOVEMBER 25, 2008

                          ______________________________

                     W IND MOUNTAIN RANCH, LLC, APPELLANT

                                             V.

                         CITY OF TEMPLE, TEXAS, APPELLEE

                      _____________________________________

                FROM THE 146 TH DISTRICT COURT OF BELL COUNTY;

                 NO. 199,609-B; HONORABLE RICK MORRIS, JUDGE

                     ______________________________________

Before QUINN, C.J., and CAMPBELL, J., and REAVIS, S.J.1

                                MEMORANDUM OPINION

       Presenting six points of error, appellant W ind Mountain Ranch, LLC contends the trial

court erred in a rendering declaratory judgment wherein a deed of trust in its chain of title

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       Don H. Reavis, Senior Justice (Ret.), Seventh Court of Appeals, sitting by
assignment.
was void and a judgment lien in favor of the City of Temple is superior to the claim of W ind

Mountain. W e affirm.

       On January 4, 1978, Robert K. Utley, III, Trustee, signed a note in the amount of

$1,200,000 payable to Metropolitan Life Insurance Company with a maturity date of January

4, 1993. The note was secured by a deed of trust covering a 6.22 acre tract of land which

was thereafter conveyed to Centex Investments, Ltd., a California limited partnership. On

January 29, 1992, Centex commenced a voluntary chapter 11 proceeding in the United

States Bankruptcy Court for the Central District of California. On March 16, 1994, an Order

Confirming Plan was signed by the judge but no evidence was introduced that it was

recorded in Bell County, the county where Temple is located.

       On August 20, 2002, the City filed suit against Centex alleging numerous code

violations and recovered a judgment against Centex in the amount of $936,316 on

December 6, 2002. An abstract of that judgment was filed on May 22, 2003. After the note

and deed of trust were assigned to W ind Mountain, upon a trustee’s foreclosure sale on

August 5, 2003, W ind Mountain was the successful bidder and the trustee conveyed the

6.22 acre tract to W ind Mountain.

       On August 28, 2003, the City commenced this action against W ind Mountain and

W illiam T. Anderson as trustee of the Center Orthopedic Pension Plan. By its fifth amended

petition, among other relief, the City sought damages alleging fraudulent transfer, wrongful

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foreclosure, and claims of conspiracy. The City also sought a declaratory judgment that the

foreclosure sale to W ind Mountain was void and sought injunctive relief.

        Following a non-jury trial at which all evidence was documentary, the trial court

signed a judgment denying all claims for damages and declaring the City’s judgment lien

was superior to the claims of W ind Mountain which passed per the foreclosure sale held on

August 5, 2003. By its judgment, the trial court declared the judgment lien of the City was

superior to the claims of W ind Mountain under the 1978 deed of trust and the foreclosure

dated August 5, 2003. Thereafter, among other findings of fact, the trial court found that

(5) notice of bankruptcy was filed in Bell County on January 30, 1992, (7) the City’s abstract

of judgment in the amount of $936,316 against Centex was recorded on May 22, 2003, (10)

no written extension of the January 4, 1978 Metropolitan deed of trust was ever filed for

record in Bell County and (11) the City of Temple did not have actual or constructive notice

of any renewed and modified notes secured by the deed of trust. By two conclusions of law,

the trial court held that the January 4, 1978 deed of trust was void and also the City’s

judgment lien was superior to the claim of W ind Mountain.

       W e commence our analysis by first considering two unchallenged findings of fact.

By finding of fact 10, the trial court found that no written extension of the January 4, 1978

Metropolitan Life Insurance Company deed of trust was ever filed for record in the Bell

County Clerk’s office. Then, by finding of fact 11, the trial court found that the City did not

have actual or constructive notice of any renewed and modified notes secured by the deed

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of trust. Because these findings are not challenged by point of error, they are binding on

this Court. See McGalliard v. Kuhlmann, 722 S.W .2d 694, 696 (Tex. 1986).

                                     Points Five and Six

       Next we consider W ind Mountain’s points five and six. By point five, it contends the

trial court erred in deciding the case was a declaratory judgment action instead of a

trespass to try title action. Then by point six, W ind Mountain contends the City, as a

judgment creditor of its predecessor in title, did not have standing to complain of the validity

of the contractual obligations that existed only between W ind Mountain and its predecessor.

W e disagree.

       By its fifth amended petition, the City sought a determination that the foreclosure sale

and transfer to W ind Mountain was void. Similarly, by its second amended answer, W ind

Mountain also sought declaratory relief. However, W ind Mountain did not present any

special exceptions to the City’s pleadings and obtain a ruling prior to trial. Accordingly,

W ind Mountain waived any alleged error by failure to specially except or otherwise inform

the trial court of the alleged error. See Estate of Stonecipher v. Estate of Butts, 686 S.W .2d

101,103 (Tex.1985) and Narisi v. Legend Diversified Investments, 715 S.W .2d 49, 52

(Tex.App.--Dallas 1986, writ ref’d. n.r.e.).

       By its sixth point, W ind Mountain contends the City did not have standing to maintain

its action for declaratory relief. However, in Roberson v. City of Austin, 157 S.W .3d 130,

135 (Tex.App.--Austin 2005, pet. denied), the court held that declaratory relief was available

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to a landowner to determine the validity of an unrecorded easement across his property.

Here too, title is not at issue, but instead, the controlling question is the priority of the

judgment lien over the claims of W ind Mountain where the deed of trust was not renewed

and extended in accordance with Texas Civil Practice & Remedies Code section 16.037.

Moreover, by also seeking declaratory relief, W ind Mountain invited any alleged error.

Northeast Tex. Motor Lines, Inc. v. Hodges, 138 Tex. 280, 158 S.W .2d 487, 488 (1942) and

Cook v. Caterpillar, Inc., 849 S.W .2d 434, 442 (Tex.App.--Amarillo 1993, writ denied). W ind

Mountain’s points of error five and six are overruled.

                                     Points One and Two

       By its first point of error, W ind Mountain contends the trial court erred in not finding

that the City’s attack on the Metropolitan Life note and deed of trust was barred by res

judicata. Then, by its second point, W ind Mountain contends the trial court erred in not

finding that the City’s claim of invalidity of the Metropolitan Life note and deed of trust was

a collateral attack on the order of confirmation extending the time and terms of the

documents to December 1, 1999. W e disagree and overrule the points.

       Under traditional rules applicable to res judicata and collateral estoppel, these

defenses apply if (1) the parties are identical in both suits; (2) the prior judgment is rendered

by a court of competent jurisdiction; (3) there is a final judgment on the merits; and (4) the

same cause of action is involved in both cases. Fernandez v. Memorial Healthcare Sys.,

Inc., 896 S.W .2d 227, 230 (Tex.App.–Houston [1 st Dist.] 1995, writ denied). Further, as

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discussed in Fernandez, res judicata is an affirmative defense and where properly pleaded

and supported by uncontroverted summary judgment evidence, may serve as the basis for

a summary judgment. Id. Also, in Avila v. St. Luke’s Lutheran Hosp., 948 S.W .2d 841, 847

(Tex.App.--San Antonio 1997, writ denied), the court held that due process requires that

collateral estoppel operate only against parties who have had a day in court, as a party or

as a privy. Here, however, the brief of W ind Mountain does not make reference to the

record which supports its position. Therefore, this court is not required to search the record

for evidence supporting its position. Brandon v. American Sterilizer Co., 880 S.W .2d 488,

493 (Tex.App.--Austin 1994, no writ); see also T EX. R. A PP . P. 38(h). Moreover, even

though the practice regarding these defenses has modified strict rules, W ind Mountain has

failed to demonstrate that the action by the City to seek a declaration of the priority of its lien

arising per the December 6, 2002 judgment against Centex and the May 22, 2003 abstract

of judgment was affected by the March 16, 1994 order of the bankruptcy judge.

                                           Point Three

        By point of error three, W ind Mountain contends the trial court erred in finding that

the Metropolitan Life note and deed of trust were void because the bankruptcy court’s

judgment was not recorded or domesticated in accordance with state law. W e disagree.

        First, although the trial court declared the deed of trust was void, from the face of

the judgment, we note that the trial court did not hold or declare the promissory note was

void.

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       W ind Mountain concludes its argument by stating that the order of the bankruptcy

court did not have to be domesticated or recorded under state law to bind the parties and

their successors-in-interest and that the trial court was barred on the issue. However, the

policy of the Texas registration law seeks to require that the public records disclose all

matters affecting land titles. See Turrentine v. Lasane, 389 S.W .2d 336, 337 (Tex.Civ.App.

–W aco 1965, no writ )(and authorities cited therein.) For this and the reasons discussed

above, point of error three is overruled.

                                            Point Four

       By point of error four, W ind Mountain contends the trial court erred in failing to find

that Centex’s lis pendens was actual notice of Centex’s bankruptcy. W e disagree.

       First, we note that “notice” as material here, may be constructive or actual. Actual

notice rests on personal information or knowledge, but constructive notice rests on notice

the law imputes to a person not having personal information or knowledge. Madison v.

Gordon, 39 S.W .3d 604, 606 (Tex. 2001). In effect, this point presents a contention that the

evidence conclusively established that the City had actual notice of the bankruptcy by virtue

of the lis pendens filing. Although filing of a lis pendens may constitute constructive notice,

it does not constitute actual notice. See Gene Hill Equip. Co. v. Merryman, 771 S.W .2d

207, 209 (Tex.App.--Austin 1989, no writ). W ind Mountain’s fourth point is overruled.

       W e conclude our analysis by noting that the trial court concludes its judgment by

declaring that the abstract of judgment lien of the City is superior to the claims of W ind

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Mountain under the deed of trust recorded in Volume 1497, Page 6 of the Deed of Trust

Records in Bell County.     However, W ind Mountain does not present a point of error

challenging this declaration. W e cannot reverse the judgment of a trial court in the absence

of a properly assigned error, see American General Fire and Casualty Company v.

W einberg, 639 S.W .2d 688, 689 (Tex 1982) and Orchid Software, Inc. v. Prentice-Hall, Inc.,

804 S.W .2d 208, 211 (Tex.App.–Austin 1991, writ denied).

       Accordingly, the trial court’s judgment is affirmed.

                                                  Don H. Reavis
                                                  Senior Justice

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