Court Opinion

ID: 6113902
Source: CourtListenerOpinion
Date Created: 2022-01-31 08:15:25.45395+00
Date Added: 2024-06-11T08:13:19.929271
License: Public Domain

Reversed and Remanded and Memorandum Opinion filed January 25, 2022.

                                      In The

                    Fourteenth Court of Appeals

                              NO. 14-20-00770-CV

                     NITI PROPERTIES LLC, Appellant

                                        V.
JAMES P. ARTHUR, MARY ARTHUR AND ALL OTHER OCCUPANTS,
                        Appellees

             On Appeal from the County Civil Court at Law No. 3
                           Harris County, Texas
                      Trial Court Cause No. 1152397

                         MEMORANDUM OPINION

      In this forcible-entry-and-detainer action appellant Niti Properties challenges
a judgment entered in favor of appellees James and Mary Arthur and all occupants
of 7639 Beechnut St., Houston, Texas 77074. In two issues Niti Properties asserts
(1) the trial court erred in determining the foreclosure was in violation of a
restraining order; and (2) the trial court’s award of possession to appellees was
against the great weight and preponderance of the evidence. We conclude the trial
court did not have jurisdiction to consider whether the foreclosure was wrongful and
that the trial court erred in awarding possession to the Arthurs. We therefore reverse
the trial court’s judgment and remand for proceedings consistent with this opinion.

                                   BACKGROUND

      As evidenced by a deed of trust executed on February 16, 2006, appellees, the
Arthurs in the name of Arthur Holdings, purchased the property located at 7639
Beechnut, Houston, Texas (the Property). To finance the purchase, the Arthurs
borrowed $1,225,000 from Blackburne & Brown Mortgage Fund I.

      On November 5, 2019, Blackburne & Brown, the note-holder, foreclosed and
sold the property to appellant Niti Properties at a trustee’s sale. Niti Properties
acquired title to the Property pursuant to a Substitute Trustee’s Deed executed
November 27, 2019.

      Thereafter, Niti Properties provided notice to the Arthurs to vacate the
property. In response to those efforts, the Arthurs sought and obtained a temporary
restraining order in a separate proceeding in Harris County District Court, which
sought to enforce an agreed judgment entered in yet another matter involving the
same property. See generally Paradise Living, Inc. v. Blackburne & Brown
Mortgage Fund I, No. 01-18-00194-CV, 2019 WL 2426168, at *1-3 (Tex. App.—
Houston [1st Dist.] June 11, 2019, no pet.) (mem. op.) (recounting several years of
litigation and a settlement agreement leading to an agreed judgment between the
Arthurs and Blackburne). The TRO ordered Blackburne to refrain from foreclosure,
eviction, or other action affecting the occupancy of the Property.

      The Arthurs failed to vacate the Property, and Niti Properties filed its forcible
detainer petition in justice court. Pursuant to section 3.22 of the deed of trust Niti

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Properties asserted a superior right to possession of the property. 1 The justice court
rendered judgment in favor of Niti Properties, and the Arthurs appealed to the county
court at law. See Tex. Civ. Prac. & Rem. Code § 51.001 (permitting a party to a final
judgment in justice court to appeal to the county court at law).

       In the county court at law Niti Properties filed a motion for summary judgment
in which it alleged it established as a matter of law its right to immediate possession
of the Property superior to that of the Arthurs. Niti Properties attached as evidence:
(1) the deed of trust; (2) notice to vacate; and (3) the substitute trustee’s deed. Niti
Properties also attached the affidavit of Cheyenne Jancaric, the eviction clerk for
Niti Properties’ attorney who stated that she was the custodian of the records
attached to the motion. The Arthurs responded to the motion for summary judgment
alleging they were not tenants at sufferance and asserting that the foreclosure was
wrongful because it was in violation of the district court’s TRO. Attached to the
response was the affidavit of James Arthur and a copy of the TRO. Arthur averred,
inter alia, that Niti Properties wrongly relied on the deed of trust because there was
“no deed of trust in place.” The county court at law granted Niti Properties’ motion
for summary judgment.

       The county court at law subsequently held a hearing on the Arthurs’ motion
to reconsider a protective order granted by the court on June 5, 2020. During the
hearing, no evidence was presented, but the Arthurs’ attorney argued that the
foreclosure sale at which Niti Properties purchased the property was invalid because
it was in violation of the district court’s TRO. Niti Properties’ attorney argued that

       1
         Section 3.22 provides: Possession After Sale. If the Property is sold pursuant to this
Article, Grantor or any person holding possession of the Property through Grantor shall
immediately surrender possession of the Property to the purchaser at such sale upon the
purchaser’s written demand. If possession is not surrendered upon the purchaser’s written demand,
Grantor or such person shall be a tenant at sufferance and may be removed by writ of possession
or by an action for forcible entry and detainer.

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the TRO was invalid. At the conclusion of the hearing, the county court at law
withdrew its order granting summary judgment. The county court at law
subsequently signed an amended final judgment awarding possession of the property
to the Arthurs. In its judgment, the court entered the following findings of fact:

      1.    The Court finds that on November 5, 2019, prior to the Plaintiff’s
      purchase of the property located at 7639 Beechnut Street, Houston,
      Texas 77074 (Property), the Hon. Judge of the 281st Judicial District
      Court of Harris County, Texas (Hon. Judge Lauren Reeder) had issued
      an Amended Temporary Restraining Order (TRO), restraining the
      foreclosure of said Property
      2.    The Court finds that Plaintiff has admitted in its Response to
      Defendant’s Request for Admission (RFA) No. 1 that it purchased the
      Property at the restrained foreclosure sale on November 5, 2019, while
      the Amended TRO was valid and in effect.
      3.    The Court finds that because of the Amended TRO of FoF No. 1
      and of Plaintiff’s Admission in FoF No. 2, that on November 5, 2019,
      Defendants had superior possession to the Property.

Niti Properties appealed to this court from the amended final judgment of the county
court at law.

                                      ANALYSIS

      Niti Properties raises two issues, which both challenge the propriety of the
trial court’s order awarding possession to the Arthurs.

I.    Applicable Law

      A forcible detainer action is the procedure by which the right to immediate
possession of real property is determined. Espinoza v. Lopez, 468 S.W.3d 692, 695
(Tex. App.—Houston [14th Dist.] 2015, no pet.). It is intended to be a speedy,
simple, and inexpensive means to obtain immediate possession of the property.
Marshall v. Hous. Auth. of San Antonio, 198 S.W.3d 782, 787 (Tex. 2006).
Accordingly, the only issue in a forcible detainer action is the right to actual

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possession and not title. Tex. R. Civ. P. 510.3(e); see also Pinnacle Premier Props.,
Inc. v. Breton, 447 S.W.3d 558, 563 (Tex. App.—Houston [14th Dist.] 2014, no
pet.); Williams v. Bank of N.Y. Mellon, 315 S.W.3d 925, 927 (Tex. App.—Dallas
2010, no pet.). To prevail in a forcible detainer action, Niti Properties was not
required to prove title but was only required to show sufficient evidence of
ownership to demonstrate a superior right to immediate possession. See Salaymeh v.
Plaza Centro, LLC, 264 S.W.3d 431, 435 (Tex. App.—Houston [14th Dist.] 2008,
no pet.).

II.   Defects in the foreclosure process are not relevant to possession when, as
      here, the parties to be evicted are subject to a tenant-at-sufferance clause
      in the deed of trust.

      To prevail and obtain possession in their forcible-detainer action, the law
requires Niti Properties to show: (1) the substitute trustee conveyed the property by
deed to Niti Properties after the foreclosure sale; (2) the deed of trust signed by the
Arthurs established a landlord-tenant relationship between the Arthurs and Niti
Properties; (3) Niti Properties gave proper notice to the Arthurs to vacate the
premises; and (4) the Arthurs refused to vacate the premises. U.S. Bank Nat’l Assoc.
v. Freeney, 266 S.W.3d 623, 625 (Tex. App.—Dallas 2008, no pet.); see Tex. Prop.
Code §§ 24.002(a)(2), (b), 24.005.

      Here, Niti Properties attached to its summary judgment motion (1) the
substitute trustee’s deed; (2) the deed of trust establishing a tenancy at sufferance;
and (3) proper notice to vacate the property. It is undisputed that the Arthurs refused
to vacate the property. Whether the foreclosure was conducted in violation of the
TRO does not bear on the question of superior right to possession. As our sister court
explained:

      A plaintiff in a forcible detainer action is not required to prove title, but
      is only required to show sufficient evidence of ownership to

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      demonstrate a superior right to immediate possession. Under well-
      settled law, a deed of trust that establishes a landlord-tenant relationship
      between the borrower and the purchaser of the property at the
      foreclosure sale demonstrates such a superior right to possession.
                                        *****
      The deed of trust makes Bierwirth a tenant at sufferance in the event of
      foreclosure if she fails to surrender possession of the property.
      Although Bierwirth disputes the propriety of the foreclosure, there is
      no dispute that HSBC did foreclose and that Bierwirth failed to
      surrender the property. Thus, Bierwirth became a tenant at sufferance,
      and this landlord-tenant relationship gives AH4R a basis for its forcible
      detainer action independent of its claim to title in the property. The
      justice court and county court therefore did not need to determine
      whether HSBC satisfied all conditions precedent to the tenancy-at-
      sufferance clause or properly executed the foreclosure sale.

Bierwirth v. AH4R I TX, LLC, No. 01-13-00459-CV, 2014 2014 WL 5500487 at *5
(Tex. App.—Houston [1st Dist.] Oct. 30, 2014, no pet.) (mem. op.) (internal
citations omitted).
      The Arthurs assert on appeal to this court that Niti Properties “wrongly rel[ies]
on a non-existing Deed of Trust” to support its argument that the Arthurs became
tenants at sufferance after the foreclosure sale. The deed of trust attached to Niti
Properties’ petition in the justice court and motion for summary judgment in the
county court at law contained a clause that provided, “If possession is not
surrendered upon the purchaser’s written demand, Grantor or such person shall be a
tenant at sufferance and may be removed by writ of possession or by an action for
forcible entry and detainer.” It is undisputed that Niti Properties purchased the
property at foreclosure and the Arthurs did not surrender possession upon Niti
Properties’ written demand.

      The Arthurs argue that an earlier agreed judgment replaced the deed of trust
as an “active security instrument.” Neither the settlement agreement, nor the agreed
judgment, were filed in the county court at law in this case and neither document

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appears in our record. The Arthurs have attached these documents in addition to
other items not in the record to their brief as appendices. They argue that we can take
judicial notice of these public records. Niti Properties has objected to the attachments
to the Arthurs’ brief as they are outside the appellate record.

         The attachment of documents as exhibits or appendices to briefs is not formal
inclusion in the record on appeal, and, therefore, the documents cannot be
considered. Fox v. Alberto, 455 S.W.3d 659, 668 n.5 (Tex. App.—Houston [14th
Dist.] 2014, pet. denied). Evidence that is not contained in the appellate record is not
properly before this court. See Tex. R. App. P. 34.1. Further, an appellate court may
not take judicial notice of records unless they are provided as part of the appellate
record. See Adimora-Nweke v. Yarbrough, No. 14-19-00426-CV, 2021 WL
1917832, at *3 (Tex. App.—Houston [14th Dist.] May 13, 2021, pet. denied) (mem.
op.) (noting that our review is confined to the record of the trial court when the trial
court acted); see also Brown v. Brown, 236 S.W.3d 343, 349 (Tex. App.—Houston
[1st Dist.] 2007, no pet.).

         Courts may take judicial notice of certain matters at any time, even on appeal.
See City of Glenn Heights v. Sheffield Dev. Co., 55 S.W.3d 158, 162 (Tex. App.—
Houston [1st Dist.] 2001, pet. denied). As a general rule, however, appellate courts
do so “only to determine jurisdiction over an appeal or to resolve matters ancillary
to decisions which are mandated by law (e.g., calculation of prejudgment interest
when the court renders judgment).” Id. at 162–63. Judicial notice in this case is not
proper, and we may not consider the Arthurs’ arguments that the deed of trust was
replaced by documents not in our record. See Adimora-Nweke, 2021 WL 1917832,
at *3.

         When there is no dispute that the parties agreed to a tenancy relationship in
the event of foreclosure, the tenancy relationship provides an independent basis for

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resolving the issue of possession. Yarbrough v. Household Fin. Corp. III, 455
S.W.3d 277, 282 (Tex. App.—Houston [14th Dist.] 2015, no pet.). Here, Niti
Properties presented sufficient evidence to establish its right to immediate
possession of the property in the form of the tenancy-at-sufferance clause in the deed
of trust. See Maxwell v. U.S. Bank Nat’l Ass’n, No. 14-12-00209-CV, 2013 WL
3580621, at *3 (Tex. App.—Houston [14th Dist.] July 11, 2013, pet. dism’d w.o.j.)
(mem. op.). The Arthurs argue that the deed of trust was superseded by other
documents and, therefore, cannot be the basis of a tenancy-at-sufferance
relationship.

      The Arthurs, however, failed to present evidence in the trial court that the deed
of trust was indeed superseded by the agreed judgment. When there are issues
concerning both title and possession, the issues may be litigated in separate
proceedings in different courts with appropriate jurisdiction. See Salaymeh, 264
S.W.3d at 436.

      However, when a forcible detainer action presents a genuine issue of title so
intertwined with the issue of possession that a trial court would be required to
determine title before awarding possession, then a justice court lacks jurisdiction to
resolve the matter. See Pinnacle Premier, 447 S.W.3d at 564; Mitchell v. Armstrong
Capital Corp., 911 S.W.2d 169, 171 (Tex. App—Houston [1st Dist.] 1995, writ
denied). A justice court or a county court at law is not deprived of jurisdiction merely
by the existence of a title dispute; it is deprived of jurisdiction only if resolution of
a title dispute is a prerequisite to determination of the right to immediate possession.
See Salaymeh, 264 S.W.3d at 436.

      The county court at law must conduct a trial de novo on appeal from the justice
court. See Tex. R. Civ. P. 506.3 (“The case must be tried de novo in the county court.
A trial de novo is a new trial in which the entire case is presented as if there had been

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no previous trial.”) In this case, the county court at law granted Niti Properties’
motion for summary judgment and later withdrew that judgment replacing it with an
“Amended Final Judgment” after holding a non-evidentiary hearing. The Arthurs
had not filed a motion for summary judgment entitling them to a judgment without
a trial de novo. The county court at law rendered judgment without conducting a trial
or otherwise hearing evidence.

       We conclude the trial court erred in awarding immediate possession of the
property to the Arthurs without conducting a trial de novo. We sustain Niti
Properties’ second issue.2

                                      CONCLUSION

       We reverse the judgment of the county court at law and remand to the trial
court for trial de novo to determine if title to the property is so intertwined with
possession that the justice court lacked jurisdiction over the dispute, or which party
has the superior right to possession.

                                          /s/       Jerry Zimmerer
                                                    Justice

Panel consists of Chief Justice Christopher and Justices Zimmerer and Wilson.

       2
         Having sustained Niti Properties’ second issue we need not address its first issue
addressing propriety of the TRO.

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