Court Opinion

ID: 4063978
Source: CourtListenerOpinion
Date Created: 2016-09-29 21:09:49.306343+00
Date Added: 2024-06-11T08:43:19.776063
License: Public Domain

COURT OF APPEALS
                               EIGHTH DISTRICT OF TEXAS
                                    EL PASO, TEXAS

                                               §
 LINDA BORUNDA,                                               No. 08-13-00331-CV
                                               §
                            Appellant,                           Appeal from the
                                               §
 v.                                                        County Court at Law No. 3
                                               §
 FEDERAL NATIONAL MORTGAGE                                  of El Paso County, Texas
 ASSOCIATION,                                  §
                                                             (TC# 2013-CCV02324)
                            Appellee.          §

                                         OPINION

       Linda Borunda appeals a county court de novo judgment awarding immediate possession

of a house located at 6166 East Yandell Drive in El Paso, Texas (the Property) to the Federal

National Mortgage Association (Fannie Mae). We affirm.

                                         BACKGROUND

       In 2007, Aurora Borunda entered into a reverse mortgage agreement with Financial

Freedom Senior Funding Corporation (Financial Freedom), granting the corporation a deed of

trust to the Property in exchange for $117,000. Per Paragraph 9 of the deed of trust, Financial

Freedom had the right to “require immediate payment in full of all sums secured by this Security

Instrument” upon Aurora’s death (Paragraph 9(a)(i)), subject to the following notice

requirements:
        9. Grounds for Acceleration of Debt.

                                          .      .         .

        (d) Notice to Secretary and Borrower. Lender shall notify the Secretary and
        Borrower whenever the loan becomes due and payable under Paragraph 9.
        Lender shall not have the right to commence foreclosure until Borrower has had
        thirty (30) days after notice to either:

              (i)   Correct the matter which resulted in the Security Instrument coming
                    due and payable; or
              (ii) Pay the balance in full; or
              (iii) Sell the Property for the lesser of the balance or 95% of the appraised
                    value and apply the net proceeds of the sale toward the balance; or
              (iv) Provide the Lender with a deed in lieu of foreclosure.

        Paragraph 22, the Foreclosure Clause, sets out Financial Freedom’s powers of sale. The

Clause states that “[i]t is the express intention of Lender and Borrower that Lender shall have a

fully enforceable lien on the property” and that the lien “may be foreclosed only by court order,

if the foreclosure is for a ground other than those described in Paragraph 9(a).” The Clause also

states, in relevant part:

                If the Property is sold pursuant to this paragraph 22, Borrower or any
        person holding possession of the Property through Borrower shall immediately
        surrender possession of the Property to the purchaser at that sale. If possession is
        not surrendered, Borrower or such person shall be tenants at sufferance and may
        be removed by writ of possession.

        Aurora Borunda died on September 22, 2011. She was survived by her daughter Linda

Borunda, who resided with her in the Property, and her son Robert Gallego, who did not. Aurora

left a will naming Linda as her sole heir and executrix. Linda forewent probating the will and

instead filed an affidavit of heirship.

        On October 3, 2012, Financial Freedom notified Linda that she had been approved to sell

the house at a “short sale.” The approval letter stated that Borunda must provide ninety-five

percent of the Property’s appraised value “by the earlier of: 1) the expiration date of the current

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appraisal [in this case, January 23, 2013] or 2) two (2) business days before any scheduled

foreclosure sale date, if one has been scheduled.” Borunda testified that she obtained a loan from

Sierra Mortgage on December 15, 2012, but that when Sierra called Financial Freedom to

arrange the transaction, Financial Freedom stated that the home had already been sold at

foreclosure sale. The record does not show that Borunda ever timely tendered payment to

Financial Freedom under the terms of the short sale letter. On January 8, 2013, Financial

Freedom sold the Property to Fannie Mae at a foreclosure sale. Fannie Mae sent a written

demand for possession on January 25, and filed suit on February 8.

         The justice court granted a writ of possession. The county court on appeal and trial de

novo also granted summary judgment in favor of Fannie Mae and issued a writ of possession.

Borunda appealed to this Court.

                                                   DISCUSSION

         In one issue,1 Borunda maintains that the county court lacked subject matter jurisdiction

to enter a possession order because possession in this case is inextricably tied to resolution of a

title dispute, or, alternatively, because the deed of trust’s tenancy-at-sufferance clause is

unenforceable against her. We disagree.

                                                Standard of Review

         A forcible detainer action is an expedited proceeding intended to “provide a speedy,

simple, and inexpensive means for resolving the question of the right to possession of premises”

where no unlawful entry occurs. Rice v. Pinney, 51 S.W.3d 705, 709 (Tex.App.-Dallas 2001, no

pet.). The right to immediately possess real property is not necessarily contingent on proving

full title, and “[t]he Texas Legislative has specifically bifurcated the questions of possession and

1
  Borunda initially raised a second issue, contending that the trial court committed reversible error by failing to issue
findings of fact and conclusions of law. We abated this appeal and the trial court subsequently issued findings of
fact and conclusions of law. Issue Two is overruled as moot.

                                                            3
title[] and placed jurisdiction for adjudicating those issues in separate courts.” Murray v. U.S.

Bank Nat’l Ass’n, 411 S.W.3d 926, 928 (Tex.App.--El Paso 2013, no pet.).                           We review

jurisdictional questions de novo.

        The justice courts have original jurisdiction over forcible detainer cases, which deal with

the question of who has the superior right of immediate possession over real property.

TEX.GOV’T CODE ANN. § 27.031(a)(2)(West Supp. 2015); Murray, 411 S.W.3d at 928. The

justice court and, by extension, the county court sitting as an appellate court on trial de novo only

have jurisdiction to consider the issue of possession, not title. See TEX.GOV’T CODE ANN.

§ 27.031(b)(4); TEX.R.CIV.P. 501.12; Padilla v. NCJ Dev., Inc., 218 S.W.3d 811, 814-15

(Tex.App.--El Paso 2007, pet. dism'd w.o.j.).               Where the issue of immediate possession

necessarily involves resolution of a title dispute, the justice court is divested of subject-matter

jurisdiction and has no power to render judgment. Padilla, 218 S.W.3d at 815. Cases in which

possession and title are inextricably intertwined are reserved for districts courts, which have the

power to resolve title disputes. Id. However, where the issue of the superior right of possession

can be determined separately from title issues, the justice court has jurisdiction to decide the

case. Id.

        “To prevail in a forcible detainer action, a plaintiff is not required to prove title, but is

only required to show sufficient evidence of ownership to demonstrate a superior right to

immediate possession.” Rice, 51 S.W.3d at 709. “Specific evidence of a title dispute is required

to raise an issue of a justice court’s jurisdiction.” Padilla, 218 S.W.3d at 815. “If the right of

2
  Formerly TEX.R.CIV.P. 746 (1983, repealed by Supreme Court Order of April 15, 2013, eff. Aug. 31, 2013, Misc.
Docket No. 13-9049, 76 TEX.B.J. 440). We note that the Texas Supreme Court repealed previous forcible detainer
provisions of the Texas Rules of Civil Procedure and implemented new rules for eviction suits at TEX.R.CIV.P. 510
et seq. Fannie Mae filed its forcible detainer suit on February 8, 2013, before the changes to the Texas Rules of
Civil Procedure took effect. We will nevertheless cite to the new Rules of Civil Procedure unless a material
divergence requires us to cite to the rules effective at the time of suit.

                                                       4
recovery in a suit depends, at least in part, upon the title to land, but there is no real dispute

between the parties over the question of title, the question of title is incidental.” Merit Mgmt.

Partners I, L.P. v. Noelke, 266 S.W.3d 637, 648 (Tex.App.--Austin 2008, no pet.).

                                                    Analysis

         We conclude the county court at law had derivative jurisdiction from the justice court to

resolve which party had the right to immediate possession of the Property.

         The main thrust of Borunda’s argument is that Fannie Mae had no right to possession

under the deed of trust’s tenant-at-sufferance clause because Fannie Mae could not establish that

Financial Freedom properly conveyed its interest in the Property at foreclosure. Specifically,

Borunda contends that Financial Freedom violated the terms of the deed of trust by failing to

provide her or her half-brother Robert with adequate notice of the sale, by foreclosing

prematurely, and by misleading her about how much time she had to exercise a curative purchase

option that a Financial Freedom agent purportedly held out to her. Because, according to

Borunda, Financial Freedom had no authority to conduct the predicate foreclosure sale, Fannie

Mae’s interest is void and it had no ability to invoke the tenant-at-sufferance clause in justice

court.

         Although Borunda raises what may be a legitimate title issue in her brief, i.e. that

Financial Freedom’s exercise of foreclosure rights under the deed of trust was defective, case

law makes clear that determining the right to immediate possession does not hinge on resolving

that title dispute here.3 “The validity of a foreclosure sale may not be determined in a suit for

3
  Borunda does not argue that she actually tendered payment to Financial Freedom to pay off the lien under the short
sale letter, nor does she point to any evidence indicating she did so. She has only shown on this record that she
obtained approval for the loan. Absent a showing of payment or attempted payment, we cannot say there is an
“intertwined” title dispute that would have precluded the justice court from exercising jurisdiction here. Cf.
Rodriguez v. Sullivan, 484 S.W.2d 592, 593 (Tex.Civ.App.--El Paso 1972, no writ)(justice court lacked jurisdiction
where possession dispute hinged on whether occupant had actually purchased the property and obtained title before
subsequent purchaser supposedly obtained title).

                                                         5
forcible detainer[.]” Tehuti v. Trans-Atlas Fin., Inc., No. 05-14-00126-CV, 2015 WL 1111400,

at *2 (Tex.App.--Dallas March 12, 2015, pet. dism'd. w.o.j)(mem. op.); see also Mekeel v. U.S.

Bank Nat’l Ass’n, 355 S.W.3d 349, 352-53 (Tex.App.--El Paso 2011, pet. dism’d). “When the

party to be evicted is subject to a tenant-at-sufferance clause and the party seeking possession

purchased the property at a foreclosure sale and gave proper notice requiring the occupants to

vacate the premises, defects in the foreclosure process are not relevant to possession.” Pinnacle

Premier Props., Inc. v. Breton, 447 S.W.3d 558, 564 (Tex.App.--Houston [14th Dist.] 2014, no

pet.).

         Here, Fannie Mae’s deed granted by Financial Freedom at the foreclosure sale is

sufficient evidence of ownership for purposes of this proceeding. Pinnacle Premier Props., Inc.,
447 S.W.3d at 564. Further, Paragraph 22 of the deed of trust established a landlord-tenant

relationship between Borunda and Fannie Mae that gave Fannie Mae a superior right of

possession by naming Borunda as a tenant at sufferance upon foreclosure. Villalon v. Bank One,

176 S.W.3d 66, 71 (Tex.App.--Houston [1st Dist.] 2004, pet. denied). Under this paragraph,

Fannie Mae was entitled to immediate possession of the Property following proper notice of

eviction. Id. Borunda, of course, retains the right to test the ultimate validity of the foreclosure

process and Fannie Mae’s deed through a separate suit in district court. Id. at 71. But any title

defects in the foreclosure sale as between Financial Freedom and Fannie Mae are not cognizable

in the limited forcible detainer proceeding establishing immediate possession as between

Borunda and deed-holder Fannie Mae.

         Likewise, Borunda’s argument that the tenant-at-sufferance clause cannot reach her

because she was not a party to the deed of trust is unavailing. A grantor “cannot convey more

than he has.” Pinnacle Premier Props., Inc., 447 S.W.3d at 564. “Thus, a grantor subject to a

                                                 6
tenant-at-sufferance clause cannot convey an interest in the property free of the clause.” Id.

Because Aurora Borunda encumbered her interest in the Property with a deed of trust containing

a tenant-at-sufferance clause, any party claiming a derivative interest in the Property, including

Linda Borunda, was also properly subject to the deed of trust’s restrictions. Pinnacle Premier

Props., Inc., 447 S.W.3d at 564. Although Linda Borunda was not a party to the deed of trust,

the tenant-at-sufferance clause binding the “Borrower or any person holding possession of the

Property through Borrower . . .” is valid and enforceable against her.

       Finally, Borunda contends that Fannie Mae lost the right to enforce the deed of trust’s

tenant-at-sufferance provisions once the foreclosure was consummated because the deed of trust

dissolved and was subsumed into the trustee’s deed under the merger doctrine. Borunda cites no

authority supporting her contention that the merger doctrine applies under these circumstances.

We will not decide this issue, as it presents another attempt to collaterally attack the validity of

Fannie Mae’s claim to equitable title. Cf. Flag-Redfern Oil Co. v. Humble Expl. Co., Inc., 744
S.W.2d 6, 8 (Tex. 1987)(mortgage severs legal and equitable titles, vesting the homeowner with

legal title and the mortgage company with equitable title in a deed of trust until satisfaction of

the debt or foreclosure). Our sister courts have repeatedly held that tenant-at-suffereance clauses

in a deed of trust are sufficient to allow a justice court to determine the issue of possession.

       Fannie Mae bought the Property at a foreclosure sale.             Further, the Property was

encumbered by a deed of trust with a tenant-at-sufferance clause that could allow a justice court

to determine the right of immediate possession independently of title. Therefore, the county

court sitting as an appellate court de novo had jurisdiction to resolve the dispute presented.

                                          CONCLUSION

       Appellant’s issues are overruled. The judgment of the county court is affirmed.

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November 18, 2015
                                           YVONNE T. RODRIGUEZ, Justice

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

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