in Re Rescue Concepts, Inc.
2016 Tex. App. LEXIS 6015
Tex. App.2016Background
- Rescue Concepts, Inc. contracted to sell a Liberty County parcel to HouReal for $12 million; the closing did not occur.
- HouReal sued Rescue in Harris County alleging breach of contract (monetary damages), attorney’s fees, and seeking injunctive relief to prevent sale or to have sale proceeds deposited with the court; it did not initially plead specific performance or ownership.
- HouReal recorded a lis pendens in Liberty County while the suit was pending.
- Rescue moved to expunge the lis pendens under Tex. Prop. Code § 12.0071, arguing (1) the pleading did not assert a real-property claim and (2) HouReal failed to prove by a preponderance the probable validity of any real-property claim; HouReal later amended to seek reinstatement/specific performance.
- At the expunction hearing HouReal submitted no evidence (only pleadings and the lis pendens); the trial court denied the motion to expunge.
- The court of appeals conditionally granted mandamus, holding that because HouReal produced no evidence to meet the statutory preponderance burden, the trial court abused its discretion and must expunge the lis pendens.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the pleading contained a real-property claim sufficient to support a lis pendens | HouReal: its amended petition seeks reinstatement/specific performance (real-property relief), so a real-property claim exists | Rescue: original petition sought only monetary damages; pleadings therefore do not state a real-property claim | Court assumed without deciding that a real-property claim may exist but resolved the case on evidentiary grounds (did not rely on pleading issue) |
| Whether HouReal established by a preponderance of the evidence the probable validity of the real-property claim under § 12.0071(c)(2) | HouReal: live pleadings and notice suffice; trial court did not abuse discretion in denying expunction | Rescue: HouReal presented no evidentiary support at the hearing and thus failed the statutory preponderance burden | Held for Rescue: HouReal presented no evidence at the hearing or with its response, so it failed to meet the preponderance-of-the-evidence requirement; lis pendens must be expunged |
Key Cases Cited
- In re Ford Motor Co., 165 S.W.3d 315 (Tex. 2005) (mandamus standards)
- Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (mandamus and appellate standards)
- In re Cohen, 340 S.W.3d 889 (Tex. App.—Houston [1st Dist.] 2011) (mandamus appropriate for lis pendens disputes)
- In re Miller, 433 S.W.3d 82 (Tex. App.—Houston [1st Dist.] 2014) (definition and function of lis pendens)
- Nat’l City Bank of Ind. v. Ortiz, 401 S.W.3d 867 (Tex. App.—Houston [14th Dist.] 2013) (§ 12.0071(c)(2) preponderance standard for probable validity)