Court Opinion

ID: 4030895
Source: CourtListenerOpinion
Date Created: 2016-09-02 05:17:54.522477+00
Date Added: 2024-06-11T07:45:10.279390
License: Public Domain

COURT OF APPEALS
                              EIGHTH DISTRICT OF TEXAS
                                   EL PASO, TEXAS

 ANTHONY AGUILAR and BENITA                  §
 CASTILLO VILLASENOR,                                       No. 08-14-00183-CV
                                             §
                           Appellants,                         Appeal from the
                                             §
 v.                                                       County Court at Law No. 3
                                             §
                                                          of El Paso County, Texas
 JACK SINTON, RICHARD RUDNICK,               §
 and DENNIS HAMMETT,                                           (TC#2011-2349)
                                             §
                           Appellees.

                                         OPINION

       Anthony Aguilar and Benita Castillo Villasenor appeal from a summary judgment in favor

of Jack Sinton, Richard Rudnick, and Dennis Hammett (“the Hammett Group”) declaring null and

void a “Special Deed” attempting to convey 1.455 acres of real property to the Hammett Group

and dismissing their counterclaims. We affirm.

                                     BACKGROUND

       In 1989, the Hammett Group sold a 37.53 acre cattle stockyard to Villasenor and her

husband, Pio Escamilla.   The facilities included cattle pens, a cattle dipping vat, a large

underground gasoline storage tank, and a cattle-truck wash facility. Escamilla and Villasenor
subsequently defaulted on the note and the Hammett Group foreclosed on the property,

re-acquiring the 37.53 acre stockyard in August 1991.

          A few months before the foreclosure, Escamilla and Villasenor had sued alleging the

Hammett Group had failed to disclose the presence of the underground gasoline storage tank on

the property. In February 1993, Escamilla and Villasenor obtained a judgment against the

Hammett Group for approximately $735,000, which included the recovery of their entire $500,000

purchase price and $155,000 for improvements they had made to the property. The Hammett

Group hired attorney Mickey Milligan to appeal the judgment and posted a supersedeas bond of

$100,000 plus 68.86 acres of land that included the 37.53 acre cattle stockyard. The 68.86 acres

were posted through a deed of trust that named Aguilar as the trustee.

          In early 1997, Aguilar, as trustee on behalf of Villasenor and Escamilla, foreclosed on the

68.86 acres the Hammett Group had pledged to secure the judgment. At some point after the

foreclosure and sale, Escamilla and Villasenor conveyed an interest in the 68.86 acres to Aguilar.

Escamilla thereafter conveyed his remaining interest in the property to Villasenor.

          In October 1995, before the appeal was concluded, Hammett filed for bankruptcy.

Escamilla and Villasenor were active as creditors in the bankruptcy including obtaining a relief

from stay to foreclose on the 68.86 acres. In October 1998, after the appeal 1 and foreclosure,

Hammett received a discharge from the bankruptcy court of all the remaining claims of his

creditors.

          In June 1997, Rudnick also declared bankruptcy. During the bankruptcy, Escamilla and

Villasenor challenged Rudnick’s ability to discharge his debts to them, arguing the judgment was

1
    This Court affirmed the judgment in December 1994, and the Supreme Court denied review in 1997.
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non-dischargeable because Rudnick had committed fraud by failing to disclose the underground

gasoline storage tank on the property. Escamilla and Villasenor later filed an amended complaint

with the bankruptcy court also alleging that the dipping vat and “contaminated soil” existed on the

property. After trial, the bankruptcy court ruled that Rudnick did not commit fraud and that the

judgment was dischargeable. Escamilla and Villasenor appealed, and the decision was affirmed

in August 2002.

       In September 1997, Sinton entered into a settlement agreement with Villasenor and her

husband Escamilla concerning the judgment they had recovered in their lawsuit claiming that the

Hammett Group had failed to disclose the presence of the underground gasoline storage tank on

the property.

       Aguilar asserted that at some point he learned from a prospective purchaser of the property

about the presence of the cattle dipping vat and a contaminated portion of the property, and that

sometime in early 2006, he spoke with a representative of the Texas Commission on

Environmental Quality about the contaminated portion. On February 27, 2006, Aguilar and

Villasenor signed and filed a “Special Deed” Aguilar had prepared that attempted to convey back

to the Hammett Group a 1.455 acre portion of the property containing the contaminated land.

Aguilar admittedly prepared the Special Deed without the knowledge or agreement of the

Hammett Group.

       The Hammett Group sued seeking a declaratory judgment that the Special Deed was null

and void. Aguilar and Villasenor filed a counterclaim for breach of contract claiming Sinton had

breached his settlement agreement by filing suit, and a counterclaim for fraud claiming that each

member of the Hammett Group had concealed the existence of the cattle dipping vat on the

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property, and contending that they would not have accepted the property as collateral on the

supersedeas bond if they had known. The trial court granted the Hammett Group’s summary

judgment declaring the Special Deed null and void and entering judgment that Aguilar and

Villasenor take nothing on their counterclaims.

                                                DISCUSSION

        In their summary judgment motion, the Hammett Group contended the Special Deed was

null and void because they neither knew of, nor consented to, the attempted transfer of the 1.455

acres by the Special Deed, and that Aguilar and Villasenor’s counterclaims were barred by

limitations, by Sinton’s settlement agreement, and by the discharges arising from the Hammett and

Rudnick bankruptcies.2 Aguilar and Villasenor argued below the Special Deed was valid and

effective because it was delivered to and accepted by Attorney Milligan as the Hammett Group’s

agent and attorney, that limitations does not bar their fraud counterclaim because it arises out of the

same transaction or occurrence as the Hammett Group’s claim, that Sinton’s settlement agreement

did not encompass their fraud claim for concealment of the cattle dipping vat, that Sinton breached

the settlement agreement by filing suit, and that the bankruptcy discharges do not act as a bar

because their fraud claim was not litigated in the bankruptcy court.

                                             Standard of Review

        In our review, we apply the well-established standards of review for traditional summary

judgments. See Ordonez v. Solorio, 480 S.W.3d 56, 64 (Tex.App. – El Paso 2015, no pet.). We

review the trial court’s grant of summary judgment de novo. Shell Oil Co. v. Writt, 464 S.W.3d
650, 654 (Tex. 2015); Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). To

2
  The Hammett Group candidly concedes that although it titled its motion for summary judgment as both a traditional
and no-evidence summary judgment motion, the substance of the motion was based solely on traditional grounds.
                                                        4
prevail on a traditional summary judgment motion, a movant must show that no genuine issue of

material fact exists and that it is entitled to judgment as a matter of law. Sw. Elec. Power Co. v.

Grant, 73 S.W.3d 211, 215 (Tex. 2002). Although the nonmoving party is not required to

marshal its proof in response to a summary judgment motion, it must present countervailing

evidence that raises a genuine fact issue on the challenged elements. Id. The evidence is viewed

in the light most favorable to the nonmovant. Shell Oil Co., 464 S.W.3d at 654; City of Keller v.

Wilson, 168 S.W.3d 802, 824 (Tex. 2005). In reviewing the record, we indulge every reasonable

inference in favor of the nonmovant, and resolve any doubts in favor of the nonmovant. Shell Oil

Co., 464 S.W.3d at 654; Buck v. Palmer, 381 S.W.3d 525, 527 (Tex. 2012).

                                          DISCUSSION

                   The Trial Court Properly Granted Summary Judgment
                         Declaring the Special Deed Null and Void

        As the Hammett Group points out, a deed must be both delivered and accepted by the

grantee in order for there to be a valid conveyance. Martin v. Uvalde Sav. & Loan Assoc., 773
S.W.2d 808, 812 (Tex.App. – San Antonio 1989, no writ). “[A] deed which is not accepted by the

grantee does not convey any interest in the land.” Id. Under Texas law, “no person can be made

a grantee of property against his will.” Taylor v. Sanford, 108 Tex. 340, 346, 193 S.W. 661, 662

(1917). The Hammett Group contends the evidence is undisputed that it never agreed to accept

conveyance of the 1.455 acre tract of contaminated property by the Special Deed. We agree.

The affidavits of Sinton and Hammett state that they never saw the 2006 Special Deed until 2011,

and never agreed to accept the property, and have not paid taxes on it. Further, Aguilar testified in

his deposition that neither Rudnick, Sinton, nor Hammett agreed to have the land conveyed back to

them.

                                                 5
       Aguilar and Villasenor argue that they created a fact issue on acceptance because Aguilar

asserted in his responsive affidavit that he contacted Mickey Milligan, the appeal attorney for the

Hammett Group, nine years after the appeal had concluded and discussed conveying the 37.53 acre

stockyard back to the Hammett Group, and that after he had prepared and recorded the Special

Deed, he delivered a copy to Milligan who said he forwarded it to the members of the Hammett

Group. We disagree this evidence was sufficient to create a fact issue on acceptance. Aguilar

never stated in his affidavit that the Hammett Group accepted conveyance of the 1.455 acres

through Milligan, only that Aguilar prepared and filed the Special Deed and then hand-delivered a

copy to Milligan who “accepted the delivery.” We conclude this is insufficient to raise a fact

issue to dispute Aguilar’s admission in his deposition that Rudnick, Sinton, or Hammett never

agreed to have the 1.455-acre parcel conveyed to them.                   Mere delivery is not

enough—“conveyance of property is not complete without both delivery by the grantor and

acceptance by the grantee.” Panhandle Baptist Found., Inc. v. Clodfelter, 54 S.W.3d 66, 71

(Tex.App. – Amarillo 2001, no pet.).

       We also reject Aguilar and Villasenor’s contention that by merely recording the Special

Deed they created a presumption, and thus a fact issue, on delivery and acceptance. In those cases

recognizing a presumption of acceptance arising from the filing of a deed, “the presumption of

acceptance of the conveyance was created because the deed was delivered to the grantee and

recorded by the grantee.” Martin, 773 S.W.2d at 812 (emphasis in original). We agree with the

Martin court that a presumption of acceptance does not arise when, as here, the grantors both

execute and record the deed without the approval of the grantees. Id. Because, Aguilar and

Villasenor failed to raise a fact issue that the Hammett Group agreed to accept conveyance of the

                                                6
1.455 acre tract of contaminated property by the Special Deed, we conclude the trial court properly

granted summary judgment declaring the Special Deed null and void.

                   The Trial Court Properly Granted Summary Judgment
                        On Aguilar and Villasenor’s Counterclaims

       Aguilar and Villasenor counterclaimed for breach of the settlement agreement against

Sinton for filing the underlying lawsuit, and for fraud against each member of the Hammett Group

claiming they concealed the existence of the cattle dipping vat on the property to induce them to

accept the deed of trust pledging the 68.86 acres to secure the judgment while on appeal. In

moving for summary judgment, the Hammett Group contended the counterclaims were barred by

limitations, by the settlement agreement’s contractual release of Sinton, and by the bankruptcy

discharges of Hammett and Rudnick.

                           Limitations Bars the Fraud Counterclaim

       Aguilar and Villasenor alleged the Hammett Group’s fraudulent nondisclosure occurred

before May 26, 1993, when the deed of trust on the 68.86 acres was pledged by the Hammett

Group to secure the judgment. They alleged they would not have accepted the deed of trust on the

68.86 acres if the existence of the dipping vat on the property had been disclosed. Fraud has a

four-year statute of limitations. TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a)(4) (West 2002).

Aguilar and Villasenor first raised their fraud claim when they filed their counterclaim on

September 20, 2011, eighteen years after the deed of trust was pledged.

       Aguilar and Villasenor concede that limitations would have barred their fraud claim if it

had not been filed as a counterclaim. They contend, without elaboration, that Section 16.069 of

the Texas Civil Practice and Remedies Code allowed them to timely raise their fraud allegations in

a counterclaim. The Hammett Group correctly points out, however, that Section 16.069 allows a

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counterclaim otherwise barred by limitations to be filed only if the counterclaim arises from the

same transaction or occurrence. TEX. CIV. PRAC. & REM. CODE ANN. § 16.069(a) (West 2015).3

For Aguilar and Villasenor’s fraud counterclaim to arise out of the same transaction or occurrence

as required by Section 16.069, the claim must have a logical relationship to the dispute that was

involved in the Hammett Group’s declaratory judgment action. See Freeman v. Cherokee Water

Co., 11 S.W.3d 480, 483 (Tex.App. – Texarkana 2000, pet. denied); see also Commint Technical

Servs., Inc. v. Quickel, 314 S.W.3d 646, 653 (Tex.App. – Houston [14th Dist.] 2010, no pet.) (“We

apply a logical relationship test to determine whether counterclaims arise out of the same

transaction or occurrence.”).            To be logically related, the essential facts on which the

counterclaim is based must be significantly and logically relevant to both claims. Freeman, 11
S.W.3d at 483.

         The Hammett Group’s declaratory judgment claim arises from Aguilar and Villasenor’s

attempted conveyance of 1.455 acres through the Special Deed in 2006. Aguilar and Villasenor’s

counterclaim for fraud, on the other hand, arises from the 1993 deed of trust that they claim they

would not have accepted absent the alleged fraudulent nondisclosure. As the Hammett Group

correctly points out, what was not disclosed in connection with the 1993 deed of trust is not

significantly and logically relevant to whether the Hammett Group accepted the Special Deed

conveyance in 2006. Section 16.069(a) thus does not apply because the fraud counterclaim does

not arise from the same transaction or occurrence underlying the Hammett Group’s declaratory

3
  Section 16.069(a) provides that: “If a counterclaim or cross claim arises out of the same transaction or occurrence
that is the basis of an action, a party to the action may file the counterclaim or cross claim even though as a separate
action it would be barred by limitation on the date the party’s answer is required.”

                                                           8
judgment claim. Accordingly, Aguilar and Villasenor’s fraud claim was barred by limitations.4

See Freeman, 11 S.W.3d at 483 (concluding Section 16.069 did not apply because counterclaims

based on the alleged fraudulent execution of a deed did not logically relate to plaintiff’s

declaratory action to construe a fishing rights provision contained in the deed).

                           Sinton Did Not Breach the Settlement Agreement

        Sinton entered into a settlement agreement with Villasenor and her husband Escamilla in

September 1997 concerning the judgment they had recovered in their lawsuit claiming that the

Hammett Group had failed to disclose the presence of the underground gasoline storage tank on

the property. They had sued Sinton in California to collect on the Texas judgment. At the time,

Escamilla and Villasenor had already foreclosed on the 68.86 acres, including the cattle stockyard

where the dipping vat was located, pursuant to the deed of trust given as part of the supersedeas

bond.

        As a ground for summary judgment, the Hammett Group argued that the settlement

agreement barred any counterclaims against Sinton.                   Aguilar and Villasenor contend the

settlement agreement did not release their fraud claim that the Hammett Group had failed to

disclose the existence of the dipping vat and contaminated land. We need not address this

argument since we have already concluded that Aguilar and Villasenor’s fraud claim was barred

by limitations.5

4
  Because Aguilar and Villasenor brought only a fraud claim against Rudnick and Hammett, and because we have
determined the fraud claim is barred by limitations, we need not address whether the fraud claim was also barred by
Rudnick and Hammett’s bankruptcy discharges. See TEX. R. APP. P. 47.1 (court of appeals is required to address only
those issues necessary to final disposition of the appeal).
5
  See TEX. R. APP. P. 47.1. We also decline to address the issue of Aguilar’s standing to assert any counterclaims,
which the Hammett Group has raised for the first time on appeal. We recognize that standing may be challenged for
the first time on appeal. See RSL Funding, LLC v. Pippins, No. 14-0457, 2016 WL 3568134, at **3-4 (Tex. July 1,
2016); Hagen v. Hagen, 282 S.W.3d 899, 911 (Tex. 2009). The Texas Supreme Court has noted, however, that where
                                                        9
         Aguilar and Villasenor also contend, however, that Sinton breached the settlement

agreement by filing suit for declaratory judgment, arguing that a condition of the settlement

agreement was no party would sue the other party. The settlement agreement, however, contains

no provision barring one party from suing the other, but rather provides only that if a suit is

brought raising claims connected with the release, the prevailing party will be entitled to costs and

attorney’s fees. In any event, Sinton’s declaratory judgment claim concerning the actions Aguilar

and Villasenor took in 2006 concerning the Special Deed were not claims “connected with the

release” of the lawsuit concerning Sinton’s actions of fraudulent nondisclosure in May 1993.

Further, Sinton’s filing of a lawsuit concerning actions occurring in 2006 could not be a breach of

the 1997 settlement agreement, because by its terms, the settlement agreement applied only to

matters “occurring or arising on or before the date Plaintiffs and Sinton execute this Release.” A

release operates as a complete bar only to a later action based upon matters covered in the release.

McCullough v. Scarbrough, Medlin & Assocs., Inc., 435 S.W.3d 871, 885 (Tex.App. – Dallas

2014, pet. denied); McMahan v. Greenwood, 108 S.W.3d 467, 478 (Tex.App. – Houston [14th

Dist.] 2003, pet. denied). Filing a lawsuit based on Aguilar and Villasenor’s conduct in 2006

could not have been a breach of the settlement agreement that covered only matters occurring

before September 13, 1997, the date the settlement agreement was signed. Accordingly, we

jurisdiction is challenged for the first time on appeal, plaintiffs do not have the same opportunities to replead, direct
discovery to, or otherwise address the jurisdictional issue as they have when standing is raised in the trial court. See
Rusk State Hosp. v. Black, 392 S.W.3d 88, 96 (Tex. 2012); see also RSL Funding, 2016 WL 3568134, at *4. Thus,
even if standing has not been alleged or shown, but the pleadings and record do not demonstrate an incurable
jurisdictional defect, the case can be remanded to the trial court where the plaintiff is entitled to a fair opportunity to
develop the record relating to jurisdiction and to replead. RSL Funding, 2016 WL 3568134, at *4; Rusk State Hosp.,
392 S.W.3d at 96-97; Westbrook v. Penley, 231 S.W.3d 389, 394-95 (Tex. 2007). It is plausible that Aguilar could
show on remand that he acquired a sufficient interest in the property or was a third-party beneficiary under the
settlement agreement as Villasenor’s attorney, so as to give him standing. But, since there will be no remand in this
case for Aguilar to make such a showing, there is no need to address his possible lack of standing.
                                                           10
conclude the trial court properly granted summary judgment that Aguilar and Villasenor take

nothing on their counterclaims.

                                        CONCLUSION

       We overrule all of the issues on appeal and affirm the trial court’s judgment.

                                             STEVEN L. HUGHES, Justice
August 31, 2016

Before McClure, C.J., Rodriguez, and Hughes, JJ.

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