Arsenio Cantu v. Elbar Investments, Inc. and Tax Ease Funding, L.P.
01-15-00476-CV
| Tex. App. | May 18, 2017Background
- Cantu owned three lots and became delinquent on ad valorem taxes; Tax Ease paid the taxes under Tax Code Chapter 32 and received the tax lien; Cantu executed a deed of trust and a promissory note for $21,319.13.
- Cantu defaulted; Tax Ease obtained an expedited foreclosure order (Tex. R. Civ. P. 736) and foreclosed; Elbar bought the property at the sale for $65,000.
- Cantu sued to set aside the foreclosure sale, sought declaratory relief (challenging an alleged alteration to the deed adding Lot 24), wrongful-foreclosure damages, and alternatively an accounting of sale proceeds.
- Elbar filed a traditional summary-judgment motion (raising, inter alia, tender, estoppel, and limitations defenses); Tax Ease filed a no-evidence summary-judgment motion (including a statutory tender defense under Tex. Tax Code § 34.08).
- The trial court granted both summary-judgment motions (order did not state grounds); only attorney fees and rental value issues proceeded to trial; judgment was entered for Elbar and Tax Ease.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cantu had to satisfy the common-law mortgage tender before seeking to set aside a foreclosure | Cantu did not contend he tendered the mortgage debt; he argued other defects made tender irrelevant | Defendants argued common-law tender (pay mortgage debt) is a condition precedent to recover title after void foreclosure | Court accepted tender ground as meritorious basis for summary judgment (appellant failed to establish tender) |
| Whether Tex. Tax Code § 34.08 required deposit into court registry (statutory tender) before challenging tax sale | Cantu argued he was not required because foreclosure judgment did not specify delinquent tax amount (raised on appeal but not below) | Defendants argued § 34.08 bars suit challenging tax sale unless plaintiff deposits delinquent taxes, penalties, interest, and sale costs or files affidavit of inability to pay | Court affirmed summary judgment based on statutory tender ground (Cantu did not deposit nor claim inability; on appeal he preserved only the registry-funds argument) |
| Whether excess proceeds already in the court registry satisfied the statutory/common-law tender | Cantu argued excess proceeds ($36,819.43) in registry fulfilled the tender purpose and barred dismissal | Defendants argued Cantu had not shown entitlement to any of those proceeds and had not followed Tax Code § 34.04 procedure to claim them | Court held even if registry funds could satisfy tender, Cantu produced no evidence he was entitled to those funds, so they could not constitute a valid tender |
| Whether declaratory-judgment claims were improperly dismissed because deposit requirement does not apply | Cantu argued declaratory relief is not subject to § 34.08 deposit requirement | Defendants applied tender defenses to bar the challenge to the sale | Court affirmed summary judgment on tender grounds and did not reach the separate argument about applicability to declaratory relief (dismissal sustained based on tender) |
Key Cases Cited
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (standard of review for summary judgment)
- FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (affirm where any summary-judgment ground is meritorious)
- Saravia v. Benson, 433 S.W.3d 658 (Tex. App.—Houston [1st Dist.] 2014) (common-law tender requirement to recover title after void foreclosure)
- Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572 (Tex. 2006) (no-evidence summary-judgmentlegal-sufficiency standard)
- Woodside Assurance, Inc. v. N.K. Res., Inc., 175 S.W.3d 421 (Tex. App.—Houston [1st Dist.] 2005) (procedure for claim and distribution of excess proceeds from tax sale)