Nac Tex Hotel Co., Inc. v. Stephen Greak, Individually, Dee Winston, Individually and E & G Investments, a General Partnership, 2015 Tex. App. LEXIS 11681

Property dispute over a triangular parcel (part of a .546-acre tract) used as ingress/egress and parking adjacent to a .411-acre tract owned by Nac Tex Hotel Co., Inc. (Corporation).
The triangle was originally owned by Temple; in 1981 Temple granted the .411-acre parcel an easement to Chestnut Street but did not convey the triangle.
The DeWitts (predecessors) and then the Corporation made improvements, maintained, and used the triangle from the 1980s through 2012.
In 2007 Temple sold the adjoining tract (including the triangle) to E & G Investments (Partnership). Disputes over parking/use arose in 2009 and again in 2012.
The Corporation sued for title by adverse possession; the Partnership denied liability and sought attorney’s fees under Tex. Civ. Prac. & Rem. Code § 16.034.
Trial court ruled for the Partnership: Corporation’s adverse-possession claim failed, the suit was groundless and brought in bad faith, and awarded the Partnership $49,000 in attorney’s fees. The Court of Appeals affirmed the adverse-possession result but reversed the bad-faith and fee awards, deleting the attorney’s-fee award.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Corporation proved adverse possession under 10-year statute	Corporation: continuous, open, exclusive use and improvements established hostile possession	Partnership: Corporation lacked hostile intent; use was permissive or under a mistaken belief of ownership	Held: Jury could reasonably find lack of hostile intent; adverse-possession under 10-year statute not established
Whether Corporation proved adverse possession under 25-year statute	Corporation: long-term use supports 25-year limitations title	Partnership: No color of title and no tax payments on disputed parcel	Held: 25-year claim fails as matter of law — no color of title and no taxes paid
Whether the suit was filed in bad faith (supporting mandatory fee award)	Corporation: suit was a legitimate resolution of a longstanding use dispute	Partnership: claim was groundless and filed dishonestly/willfully ignorant	Held: Trial court abused discretion — presumption of good faith not overcome; no bad faith
Whether Partnership was entitled to attorney’s fees under § 16.034	Partnership: entitled because claim was groundless and in bad faith (or court may award fees discretionarily)	Corporation: statutory prerequisites not met (no bad faith; no required pre-suit written demand)	Held: Fee award reversed — no bad-faith finding and Partnership failed to give required 10-day written demand, so statutory fees not recoverable

Dow Chem. Co. v. Francis, 46 S.W.3d 237 (legal-sufficiency standard for "matter of law" review)
City of Keller v. Wilson, 168 S.W.3d 802 (standard for reviewing evidentiary sufficiency)
Calfee v. Duke, 544 S.W.2d 640 (conflicting intent evidence creates fact issue in adverse-possession cases)
Tran v. Macha, 213 S.W.3d 913 (adverse-possession requires clear intent to claim property)
Rhodes v. Cahill, 802 S.W.2d 643 (burden to prove facts essential to limitations claim)
Masonic Bldg. Ass'n v. McWhorter, 177 S.W.3d 465 (hostility test: acts and use must reasonably notify owner)
Ellis v. Jansing, 620 S.W.2d 569 (mere occupancy without intent does not support limitations)
MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660 (American Rule; fees allowed only by statute or contract)
King v. Inwood North Assoc., 563 S.W.2d 309 (jury's role in ten-year limitation factual elements)
Save Our Springs Alliance v. Lazy Nine Mun. Util. Dist., 198 S.W.3d 300 (definition of bad faith)
Unifund CCR Partners v. Villa, 299 S.W.3d 92 (presumption that pleadings filed in good faith)