Court Opinion

ID: 4068677
Source: CourtListenerOpinion
Date Created: 2016-09-30 00:05:45.263358+00
Date Added: 2024-06-11T12:46:43.306108
License: Public Domain

ACCEPTED
                                                                            03-14-00183-CV
                                                                                    7855612
                                                                 THIRD COURT OF APPEALS
                                                                            AUSTIN, TEXAS
                                                                      11/17/2015 8:50:17 AM
                                                                          JEFFREY D. KYLE
                                                                                     CLERK
                        NO. 03-14-00183-CV
__________________________________________________________________
                                                         FILED IN
                                                  3rd COURT OF APPEALS
                   IN THE COURT OF APPEALS             AUSTIN, TEXAS
               FOR THE THIRD DISTRICT OF TEXAS11/17/2015 8:50:17 AM
                            AT AUSTIN                 JEFFREY D. KYLE
                                                           Clerk
__________________________________________________________________

                         CAROL KORMANIK,

                               Appellant

                                   vs.

                         VICTOR SEGHERS,

                                Appellee

           On Appeal From the 155th Judicial District Court of
                        Fayette County, Texas
                  Trial Court Cause No. 2013v-016

             APPELLANT’S MOTION FOR REHEARING
__________________________________________________________________
                                                     Michael D. Sydow
                                                State Bar No. 19592000
                                             5020 Montrose Boulevard
                                                              Suite 450
                                                 Houston, Texas 77006
                                            (713) 622-9700 [Telephone]
                                           (713) 522-1949 [Telecopier]
                                    michael.sydow@thesydowfirm.com

                        Attorney for Appellant,
                           Carol Kormanik

                                    1
                               NO. 03-14-00183-CV

                       IN THE COURT OF APPEALS
                   FOR THE THIRD DISTRICT OF TEXAS
                               AT AUSTIN

                     _________________________________

                             CAROL KORMANIK,
                                 Appellants,

                                         vs.

                              VICTOR SEGHERS,
                                  Appellee.

  Appealed from the 155th Judicial District Court of Fayette County, Texas
                     Trial Court Cause No. 2013v-016

                APPELLANT’S MOTION FOR REHEARING

TO THE HONORABLE COURT OF APPEALS:

      COMES NOW, Appellant Carol Kormanik and submits this Motion for

Rehearing in response to the opinion issued by the Court on October 1, 2015, and

requests that the Court consider the following issues:

      1.     Whether the Court should dismiss this appeal as moot because,
             during the pendency of the appeal, the Land was sold in an
             unrelated foreclosure sale.

      2.     Alternatively, if the Court decides that the appeal is not moot,
             whether the Court erred in determining that the sheriff’s sale
             could proceed when it is undisputed that the Land was Carol’s
             separate property and not subject to the liabilities of her
             husband, Ronald Kormanik.

                                          2
1.    This case is moot because the Land was sold in an unrelated foreclosure
      sale during the pendency of the appeal.

      This case is moot. Under the constitution, courts have no jurisdiction to

render advisory opinions. Coburn v. Moreland, 433 S.W.3d 809, 825 (Tex. App.—

Austin 2014, no pet.). A court cannot decide a case that has become moot during

the pendency of an appeal. Id. “A case [on appeal] becomes moot if, since the time

of filing, there has ceased to exist a justiciable controversy between the parties—

that is, if the issues presented are no longer ‘live,’ or if the parties lack a legally

cognizable interest in the outcome.” Id. (quoting Heckman v. Williamson Cnty.,

369 S.W.3d 137, 162 (Tex. 2012)). In other words, a case is moot when the court’s

action on the merits cannot affect the parties’ rights or interests. Id.

      The Supreme Court has recognized two exceptions to the mootness doctrine:

(1) the capability of repetition yet evading review exception; and (2) the collateral

consequences exception. Gen. Land Office v. OXY U.S.A., Inc., 789 S.W.2d 569,

571 (Tex. 1990). Neither exception applies in this case.

      Here, on January 30, 2013, Carol filed a suit seeking a permanent injunction

to prevent the Fayette County sheriff from selling the Land. The trial court denied

the permanent injunction on February 13, 2014, which would have allowed the

sheriff to sell the Land. Carol then appealed the trial court’s judgment, delaying the

sale. Carol filed her notice of appeal on April 7, 2014. During the pendency of this

appeal, on April 7, 2015, the Land was sold in an unrelated transaction by Michael

                                            3
G. Tapp, substitute trustee, pursuant to a note and deed of trust entered into by

Carol and Ronald Kormanik. A copy of the recorded Substitute Trustee’s Deed and

Bill of Sale showing the date of sale is attached as Exhibit “A”.1 This appeal was

submitted on the briefs on July 29, 2015, and this Court issued its opinion and

judgment on October 1, 2015.

       Since the time this appeal was filed, April 7, 2014, and because of the

foreclosure sale, there has ceased to exist a justiciable controversy between the

parties. A judgment from this Court permitting or prohibiting the sheriff’s sale of

the Land would be meaningless at this point because there is nothing on which the

judgment could operate; that is, the Court’s judgment would be wholly ineffectual

because it lacks a subject matter—the Land—on which it could operate. See S.

Padre Dev. Co. v. Tex. Commerce Bank N.A., 538 S.W.2d 475, 478–79 (Tex. Civ.

App.—Corpus Christi 1976, no writ); see also O’Brian v. First State Bank, No. 03-

95-00644-CV, 1996 Tex. App. LEXIS 4099, at *6–7 (Tex. App.—Austin Sep. 11,

1
  Although Exhibit “A” was not part of the appellate record in this case, Carol asks the Court to
take judicial notice of Exhibit “A” and the date of the substitute trustee’s sale. A court can take
judicial notice at any stage of the proceeding, including on appeal. Tex. R. Evid. 201(d); Office
of Pub. Util. Counsel v. Pub. Util. Comm’n, 878 S.W.2d 598, 600 (Tex. 1994). A court can
judicially notice a fact that is not subject to reasonable dispute because the fact is either generally
known or can be accurately and readily determined from sources whose accuracy cannot
reasonably be questioned. Tex. R. Evid. 201(b). A court can take judicial notice of a recorded
deed reflecting on its face that it is a certified document that was recorded with the county clerk.
Johnson v. Johnson, No. 03-02-00427-CV, 2005 Tex. App. LEXIS 10458, at *18 (Tex. App.—
Austin Dec. 16, 2005, no pet.) (mem. op.). Exhibit A is an accurate copy of a recorded deed that
reflects on its face that it is a certified document that was recorded with the Fayette County clerk
on April 13, 2015. Additionally, Carol does not anticipate that Seghers will dispute the accuracy
or authenticity of Exhibit “A”.

                                                  4
1996, writ denied) (not designated for publication) (discussing a prior decision in

related case involving a foreclosure sale that had already been completed).

Therefore, this appeal is moot.

      Accordingly, the Court should grant this Motion for Rehearing, withdraw its

opinion dated October 1, 2015, and issue a new opinion dismissing the appeal for

want of jurisdiction. Heckman, 399 S.W.3d at 162 (“If a case is or becomes moot,

the court must vacate any order or judgment previously issued and dismiss the case

for want of jurisdiction.”).

2.    Alternatively, the Court erred when it concluded that the partition
      agreement was not effective as to Seghers.

      If the Court decides that the appeal is not moot, then the Court erred when it

concluded that the Partition Agreement was not effective as to Seghers because,

under the constitution, the character of partitioned property changes immediately

upon execution of the written instrument, and a spouse’s separate property is not

subject to the liabilities of the other spouse.

      Article XVI, section 15 of the Texas Constitution provides: “[S]pouses,

without the intention to defraud pre-existing creditors, may by written instrument .

. . partition between themselves all or part of their property, then existing or to be

acquired, . . . whereupon the portion or interest set aside shall be and constitute a

part of the separate property and estate of such spouse[.]” Tex Const. art. XVI, §

16 (emphasis added). The term “whereupon” means “as a consequence of which”

                                            5
or “immediately after which.” See Webster’s New Twentieth Century Dictionary

2083 (2d ed. 1983); Oxford Dictionaries Online (Nov. 6, 2015, 2:40 PM),

http://www.oxforddictionaries.com/us/definition/american_english/whereupon.

The constitution contains no provision for notifying future creditors and does not

mandate recordation in order to give a partition agreement its intended effect.

Therefore, in this case, the Land immediately became Carol’s separate property in

2007 when she executed the Partition Agreement.

      Under Family Code section 3.202, “[a] spouse’s separate property is not

subject to liabilities of the other spouse unless both spouses are liable by other

rules of law.” Tex. Fam. Code § 3.202 (LEXIS current through 2015 R. Sess.).

Here, the Land is Carol’s separate property. The $130,000 judgment is against

Ronald, not Carol. There are no rules of law that make both Ronald and Carol

liable here. Therefore, the Land is not subject to Ronald’s liabilities.

      The question remains: How does Family Code section 4.106 fit into this

scheme? Based on the rule that courts should not adopt a construction that would

render a law absurd or meaningless, Reliant Energy, Inc. v. Gonzalez, 102 S.W.3d
868, 875 (Tex. App.—Houston [1st Dist.] 2003), aff’d, 159 S.W.3d 615 (Tex.

2005), Carol submits that section 4.106 is designed to protect bona fide purchasers

and those creditors who successfully foreclose on and sell or convey the subject

property to satisfy a debt. In this regard, by preventing a spouse from invoking a

                                           6
partition agreement to challenge a legitimate sale after the sale is complete, section

4.106(b) protects both (1) bona fide purchasers without notice and (2) those

creditors without notice who successfully convey the property and collect on a

debt.

        For instance, if (1) Carol had never intervened, (2) Sheriff Korenek had

successfully sold the Land, and (3) Seghers had collected a portion of the sale price

to satisfy the judgment debt, then Carol would have no recourse because the buyer

purchased and Seghers collected without actual or constructive notice of the

Partition Agreement. However, Carol did in fact prevent the sale when she

intervened and asserted her constitutionally-protected separate-property rights in

the Land. Therefore, because it is undisputed that the Land is Carol’s separate

property, section 4.106(b) is inapplicable.

        The Court cited Pratt v. Amrex, Inc., 354 S.W.3d 502 (Tex. App.—San

Antonio 2011, pet. denied), in support of its ultimate conclusion that the partition

agreement was not effective as to Seghers. However, that case is distinguishable

from this one. In Pratt, a husband and wife executed a partition agreement but

recorded it in the county of their residence rather than the county where the

property was located. The husband died. A Harris County court appointed a

receiver for the husband’s estate. The receiver executed and recorded a special

warranty deed conveying the subject property from the husband to the receivership

                                          7
estate. Without the receiver’s knowledge, a lender foreclosed its deed of trust

against the subject property and issued a substitute trustee’s deed to the buyer at

the foreclosure sale. The receiver sued the buyer, seeking a declaratory judgment.

The trial court granted the buyer’s motion for summary judgment declaring the

receiver’s deed void as a matter law and the buyer’s deed valid as a matter of law.

Id. at 503–04. The court of appeals first considered whether the partition

agreement was effective as to the receiver. In reversing the trial court, the court of

appeals held that the completed conveyance to the receiver was valid because he

did not have notice of the couple’s partition agreement. Id. at 505–06.

      Unlike this case, Pratt did not involve a judgment creditor or a spouse

invoking her separate-property rights against a judgment creditor. Additionally,

unlike this case, the Pratt court was considering transactions that had been

consummated; the Pratt court did not have to consider how section 4.106(b)

applied to a potential transaction that was interrupted by a petition for injunctive

relief. Consequently, the conclusion reached in Pratt is inapplicable to this case.

      Finally, family-law cases recognize that divesting a spouse of her separate

property is reversible error. Rivera v. Hernandez, 441 S.W.3d 413, 425–26 (Tex.

App.—El Paso 2014, pet. denied); see also Tex. Const. art. I, § 19. This is because

“[t]he protection of one’s right to own property is said to be one of the most

important purposes of government. Th[e] right [to own property] has been

                                          8
described as fundamental, natural, inherent, inalienable, not derived from the

legislature and as preexisting even constitutions.” Eggemeyer v. Eggemeyer, 554
S.W.2d 137, 140 (Tex. 1977). Therefore, any order or judgment permitting the

sheriff to divest Carol of her separate property in order to satisfy a judgment

against Ronald would violate Carol’s fundamental property rights.

      In sum, because the Land was Carol’s separate property and not subject to

Ronald’s liabilities and because Carol timely intervened to stop the sheriff’s sale,

the Court of Appeals erred when it concluded that the Partition Agreement was

ineffective as to Seghers and affirmed the judgment of the trial court.

3.    Conclusion & Prayer

      For these reasons, the Court should grant this Motion for Rehearing,

withdraw its October 1, 2015 opinion, and issue a substitute opinion dismissing the

appeal as moot or, alternatively, reversing the trial court’s judgment and rendering

judgment in favor of Carol Kormanik.

                                              Respectfully submitted,

                                              THE SYDOW FIRM

                                              /s/ Michael D. Sydow
                                              Michael D. Sydow
                                              michael.sydow@thesydowfirm.com
                                              Texas Bar No. 19592000
                                              5020 Montrose Boulevard, Suite 450
                                              Houston, Texas 77006

                                          9
                                             (713) 622-9700 [Telephone]
                                             (713) 552-1949 [Telecopier]
                                             ATTORNEYS FOR APPELLANT.

                     CERTIFICATE OF COMPLIANCE

       Pursuant to Tex.R. App. Pro. 9.4(i)(3), the undersigns hereby certifies that
according to the word count function of the computer program used to generate
that document, the portions of the Motion for Rehearing subject to the rule contain
1,891 words total and that the text thereof is in 14 point Times New Roman font.

                                             /s/ Michael D. Sydow
                                             Michael D. Sydow

                         CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of the foregoing Appellant’s
Motion for Rehearing was served by electronic service upon all parties of record or
their counsel, as indicated on the attached service list, on this 16th day of
November, 2015.

                                             /s/ Michael D. Sydow
                                             Michael D. Sydow

SERVICE LIST:

Mr. Carl A. Generes
4358 Shady Bend Drive
Dallas, Texas 75244

ATTORNEY FOR APPELLEE.

                                        10
                                    NO. 03-14-00183-CV

                            IN THE COURT OF APPEALS
                        FOR THE THIRD DISTRICT OF TEXAS
                                    AT AUSTIN

                                   CAROL KORMANIK,

                                            Appellant

                                                vs.

                                    VICTOR SEGHERS,

                                            Appellee

                               APPELLANT’S APPENDIX

Substitute Trustee’s Deed and Bill of Sale...............................................Exhibit “A”

                                                11
EXHIBIT “A”
                                                                     INST.   11 15-02391     Vol   : 1731
                                                                                                   Pg 623

                                         SUBSTITUTE TRUSTEE'S DEED
                                                  and BILL OF SALE

 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU A NATURAL PERSON, YOU MAY
 REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM ANY
 INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS
 FILED FOR RECORD IN TIIE PUBLIC RECORDS:YOUR SOCIAL SECURITY NUMBER
 OR YOUR DRIVER'S LICENSE NUMBER

 THE STATE OF TEXAS                               §
                                                  §    KNOW ALL MEN BY THESE PRESENTS:
 COUNTY OF FAYETTE                                §

       WHEREAS, on October 3, 2012, Ronald J. Kormanik and Carol A. Kormanik (hereinafter
 called "Mortgagor") executed and delivered a certain Deed of Trust conveying to Michael G.
 Tapp, Trustee, the hereinafter described real and personal property to secure the payment of a
 Promissory Note (hereinafter called "Note") in the original principal sum of $300,000.00,
 payable to the order of Contessa Capital, LLC, L. Tuffly Ellis Investments, LLC, and Diep
 Kim-Ngoc Nguyen, and executed by said Mortgagor on or about the same day as the Deed of
 Trust; said Deed of Trust being recorded in the Official Records of Fayette County, Texas,
 under Instrument No. 12-6069; Volume 1622, Page 226; and

       WHEREAS, the Deed of Trust provides that if default is made in the payment of all or
 any part of the principal or interest of said Note as it becomes due and payable, then the holder
 of the Note may request the Trustee or Substitute Trustee to proceed to sell the property after
 giving and posting notice as provided in the Deed of Trust; and

        WHEREAS, there has been a default in the payment of the note described in said Deed
 of Trust; and the beneficiary and owner and holder of the aforesaid note has appointed Michael
 G. Tapp as substitute trustee and requested him to enforce the sale provisions of the Deed of
 Trust;

        WHEREAS, Michael G. Tapp, Substitute Trustee, gave or caused others to give notice
 of the time, place and the terms of the sale by posting notice for at least twenty-one (21) days
 preceding the date of the sale at the place designated for such postings at the County Courthouse
 of Fayette County, Texas, and by filing Notice of Sale in the Office of the County Clerk of
 Fayette County, Texas at least twenty-one (21) days preceding the date of sale, and by mailing
 written notice of the proposed sale to all obligors of said indebtedness at said obligors' last
 known mailing address as shown by the records of the holder of said debt, postage ·prepaid,
 certified mail, return receipt requested, at least twenty-one (21) days prior to the date of said
 sale; and

        WHEREAS, Michael G. Tapp, Substitute Trustee, in accordance with the Deed of Trust
  and Substitute Trustee's Notice of Sale, did between the hours of 10:00 a.m. and 4:00 p.m. and
. within three (3) h?urs from the earliest time of sale as designated in said Notice of Sale, in the

                                                         EXHIBIT

                                                      I \-\
TI1is document to which this cerlilica10 is
affixed is a full, true and correcl copy of !he
original on file and of record in my olfice.
                                                                                                   EXHIBIT "A"
            JUN 3 0 2015

                                                                                                       Exhibit H - Page l of 5
                                                              Page 34 of 40