366 S.W.3d 258
Tex. App.2012Background
- Salene purchased a Memorial Cove Lofts condo; two mortgages to MILA, Inc. later assigned to Avelo.
- HOA foreclosed in 2007 for dues; the HOA bought the unit and later sold it to PERC, LLC.
- PERC owed past-due ad valorem taxes; Russo paid those taxes in exchange for a tax lien transfer.
- Avelo foreclosed its mortgage and bought the condo in November 2007; Russo then foreclosed the tax lien in February 2008 and Infinity acquired theProperty by substitute trustee's deed recorded February 18, 2008.
- Avelo sued in 2009 seeking recovery; Infinity asserted counterclaims; trial court granted Infinity partial summary judgment and denied Avelo’s cross-motion; Avelo appeals.
- This appeal addresses (1) the validity of the July 2007 tax lien transfer under Texas Tax Code §32.06 and §32.065, and (2) the validity of Russo’s tax lien foreclosure; the foreclosure sale is the subject of dispute, while Avelo’s own foreclosure sale is not.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of the tax lien transfer under §32.06(a-1) and (b) | Avelo argues Sworn Authorization not filed as required. | Russo complied; Certified Statement recorded with seal; presumption of proper official action. | Transfer substantially complied; transfer effective. |
| Validity of the tax lien foreclosure sale | Russo Deed and contract did not meet §32.06/§32.065 requirements; sale voidable. | Documents read together satisfy prior-law foreclosure procedures; substantial compliance; sale voidable only; redemption period expired. | Foreclosure sale voidable but redemption expired; Infinity’s title became absolute. |
Key Cases Cited
- ABN AMRO Mortg. Grp. v. TCB Farm and Ranch Land Invs., 200 S.W.3d 774 (Tex.App.-Fort Worth 2006) (foreclosure procedure under tax lien transfer law; substantial compliance governs validity)
- Redland Ins. Co. v. Sw. Stainless, L.P., 181 S.W.3d 509 (Tex.App.-Fort Worth 2005) (notice provisions; substantial compliance when prejudice is not shown)
- Richardson v. Mid-Cities Drywall, Inc., 968 S.W.2d 512 (Tex.App.-Texarkana 1998) (notice requirements; substantial compliance analysis)
- Mustang Tractor & Equip. Co. v. Hartford Accident and Indem. Co., 263 S.W.3d 437 (Tex.App.-Austin 2008) (notice and compliance in lien-foreclosure context; timing; prejudice)