Jay Kay Bear Ltd v. Patty Martin, 04-14-00579-CV

Background

Plaintiff Patty Martin sued defendants including Jay Kay Bear, Ltd. seeking declaratory relief, alleging lien superiority and claiming title to two tracts (including an 8.09-acre parcel).
Relevant encumbrances: a 2003 Zyco deed of trust (recorded Oct. 28, 2003), a June 25, 2008 deed of trust recorded in Jay Kay Bear’s name, and Martin’s deed of trust recorded June 26, 2008.
Multiple nonjudicial foreclosures occurred: Martin foreclosed on her 2008 deed (Feb. 2, 2010); Jay Kay Bear foreclosed under the 2003 Zyco deed (Apr. 6, 2010) and later transferred/recorded the property (2013 transfer to 281 Property, LLC is disputed in appellee briefing).
Trial court entered a Modified Final Judgment finding Martin’s June 26, 2008 lien superior to Jay Kay Bear’s lien; Jay Kay Bear appealed and cross‑appealed, arguing the 2003 Zyco lien was senior and that foreclosures by Jay Kay Bear extinguished Martin’s junior interest.
Key legal disputes below and on appeal: standing to appeal, preservation of error, whether a declaratory-judgment action may determine title (versus trespass-to-try-title), lien priority (purchase‑money/recording priority), validity/effect of foreclosures, and availability of equitable subordination.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held/Position urged by appellant (Jay Kay Bear)
Standing to appeal	Appellee contends Jay Kay Bear lacks an interest (transferred in 2013) and so lacks standing	An error awarding lien priority against Jay Kay Bear prejudices its rights and gives it standing even if it later transferred the land	Appellant argues it has standing because the judgment diminishes its property rights (cites Torrington)
Preservation of appellate issues	Martin says Jay Kay Bear failed to preserve issues by not filing required post-trial motions	Jay Kay Bear says bench-trial "matter of law" issues did not require a new-trial motion and it did file briefs/motion for new trial anyway	Appellant argues errors are preserved under Tex. R. Civ. P. 324(b) and Tex. R. App. P. 33.1
Declaratory judgment vs. trespass-to-try-title	Martin sought declaratory relief and claims it can obtain lien/ownership declarations	Jay Kay Bear contends title claims must be brought via trespass-to-try-title; declaratory relief cannot award title	Appellant relies on Martin v. Amerman to argue declaratory judgment cannot determine title; trial court lacked authority to award title by DJ
Lien priority (2003 Zyco vs. 2008 Martin)	Martin argues her 2008 lien was superior (and the trial court so found)	Jay Kay Bear argues the 2003 Zyco deed (a purchase‑money lien recorded in 2003) is senior by recording date and purchase‑money status; transfer to Jay Kay Bear did not degrade priority	Appellant urges reversal and rendering that 2003 Zyco deed has priority over 2008 Martin deed; foreclosure by Jay Kay Bear extinguished Martin’s junior interest
Equitable subordination	Martin apparently seeks equitable relief to subordinate the 2003 lien	Jay Kay Bear argues equitable subordination is an equitable remedy requiring proof of inequitable conduct by the senior lienholder, which Martin failed to prove	Appellant argues court erred awarding equitable subordination because Martin lost all claims that would justify it
Sanctions motion jurisdiction	Martin asks appellate court to sanction Killian, Jay Kay Bear, and counsel	Jay Kay Bear contends Martin did not appeal the trial court rulings she complains about and did not perfect an independent appeal; some targets are not parties to this appeal	Appellant asks court to decline to consider or grant Martin’s sanctions requests for lack of jurisdiction

Key Cases Cited

Torrington Co. v. Stutzman, 46 S.W.3d 829 (Tex. 2000) (party prejudiced by error has standing to appeal)
Martin v. Amerman, 133 S.W.3d 262 (Tex. 2004) (trespass‑to‑try‑title is exclusive method to resolve title questions; declaratory judgment cannot determine title)
Irving Lumber Co. v. Alltex Mortgage Co., 468 S.W.2d 341 (Tex. 1971) (trustee’s sale under a senior deed of trust cuts off rights of junior lienholders)
McGoodwin v. McGoodwin, 671 S.W.2d 880 (Tex. 1984) (purchase‑money liens are generally superior to other liens)
Farm Credit Bank v. Ogden, 886 S.W.2d 305 (Tex. App.—Houston [1st Dist.] 1994) (equitable subordination unavailable absent inequitable conduct by senior lienholder)
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for no‑evidence review and when appellate court may decide legal questions)
Nat’l City Bank v. Tex. Cap. Bank, N.A., 353 S.W.3d 581 (Tex. App.—Dallas 2011) (recording date governs lien priority under first‑in‑time rule)
Vernor v. SW Fed. Land Bank Ass’n, 77 S.W.3d 364 (Tex. App.—San Antonio 2002) (assignments of liens do not impair priority)