County Investment, LP v. Royal West Investment, LLC, Series E and Shawn Shabazi
14-15-00207-CV
| Tex. App. | Jul 6, 2015Background
- County Investment, LP owned a Houston parcel and entered a contract to sell 8 acres for $956,000; closing was opened with Stewart Title.
- Royal West (Series E) and Shawn Shahbazi (Appellees) were litigating unrelated parties (U.S. Capital Investments, LLC and Massood Pajooh) in Tarrant County; County Investment was not a party to that suit.
- Appellees recorded a notice of lis pendens purporting to encumber County Investment’s property based on the Tarrant County litigation; County Investment disputed any connection and notified Appellees to release it.
- Appellees did not remove the lis pendens promptly; County Investment’s buyer cancelled the purchase and County Investment lost the $956,000 sale; the lis pendens was released about a year later.
- County Investment sued for fraudulent court record (Tex. Civ. Prac. & Rem. Code §12.002), slander of title, and tortious interference; trial court granted summary judgment for Appellees on the basis of an absolute judicial privilege.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an absolute privilege protects filing a lis pendens when the affected property/owner is not a party to the underlying litigation | County Investment: privilege does not apply where the lis pendens targets property and an owner who were not part of the judicial proceeding; the filing was fraudulent | Royal West/Shahbazi: filing relates to their judicial proceeding and is absolutely privileged as a court-related act | Trial court: granted summary judgment for defendants, applying absolute privilege |
| Whether a lis pendens affecting property only collaterally falls within Tex. Prop. Code §12.007 (validating lis pendens immunity) | County Investment: the lis pendens sought a judgment lien/affected property collaterally and thus was void ab initio under precedent | Defendants: relied on lis pendens immunity cases where parties and properties were involved in the litigation | Disputed factual/legal issue; plaintiff argues void, but trial court resolved by applying privilege in defendants’ favor |
| Whether remedies in Props. Code §§12.0071/12.008 (expunge/cancel) are adequate or required before tort claims | County Investment: statutory remedies are inadequate or impracticable for time-sensitive real-estate closings and should not bar tort relief | Defendants: statutory procedures provide protection and limit damages claims | Plaintiff contends such remedies are not an adequate substitute; trial court nonetheless granted privilege-based dismissal |
| Whether a fraudulent court record claim under Tex. Civ. Prac. & Rem. Code §12.002 can be barred by absolute privilege | County Investment: fraudulent filing of a court record should not be shielded by absolute privilege where the record is void and the owner wasn't in the underlying suit | Defendants: filings in the course of litigation are privileged even if asserted against nonparties | Trial court held privilege barred the claims (summary judgment for defendants) |
Key Cases Cited
- Prappas v. Meyerland Comm. Improvement Ass’n, 795 S.W.2d 794 (Tex. App.—Houston [14th Dist.] 1990) (holding lis pendens filing related to parties in litigation is privileged)
- Moss v. Tennant, 722 S.W.2d 762 (Tex. App.—Houston [14th Dist.] 1986) (lis pendens that seeks judgment lien and affects property only collaterally is not within §12.007 and may be void)
- Helmsley-Spear of Texas, Inc. v. Blanton, 699 S.W.2d 643 (Tex. App.—Houston [14th Dist.] 1985) (similar rule that a prayer for a judgment lien affecting property collaterally is not authorized under §12.007)
- Griffin v. Rowden, 702 S.W.2d 692 (Tex. App.—Dallas 1985) (case recognizing privilege where lis pendens is part of dispute between same parties)
- Duke v. Power Elec. & Hardware Co., 674 S.W.2d 400 (Tex. App.—Corpus Christi 1984) (trial allowed slander of title claim based on allegedly wrongful lis pendens to go to jury)
- Bayou Terrace Inv. Corp. v. Lyles, 881 S.W.2d 810 (Tex. App.—Houston [1st Dist.] 1994) (authority involving lis pendens recorded by party involved in the underlying dispute)