Sani v. PowellSani v. Powell
Lead Opinion
Opinion by
Aрpellants Ali Sani and Fatemeh Sadat, individually and d/b/a Pyramid Realty (“Sani”), purchased land belonging to ap-pellees John Warren Powell and L. Annette Powell (“Powell”) at a tax foreclosure sale. Shortly thereafter, Sani received and recorded a tax deed for the property. Sani appeals from a summary judgment declaring void the tax sale and deed which conveyed Powell’s property to him.
Sani raises one issue in which he claims the trial court erred in failing to conclude that the two-year statute of limitations provided in section 33.54 of the Texas Tax Code
FACTUAL AND PROCEDURAL BACKGROUND
This action arises out of a tax sale of Powell’s residence and real property located in McKinney, Texas (the “Property”). On May 20, 1996, the Property was scheduled for a tax sale to take place on December 2,1997 (the “Tax Sale”). The sale was to satisfy unpaid ad valorem taxes owed to the McKinney Independent School District (“MISD”) and Collin County (together, the “Taxing Authorities”). On December 1, 1997, Powell filed a petition seeking relief under chapter 11 of the Bankruptcy Code in order to protect his property from the impending Tax Salе. See
On August 22, 2000, almost three years after the Tax Sale, Powell filed the underlying lawsuit seeking to remove cloud from title, quiet title, cancel the Deed, and recover unspecified damages and attorney’s fees. Also, in his original petition, Powell asserted that (1) on December 4, 1998, he redeemed the Property pursuant to section 84.21 of the Texas Tax Code, and (2) since the time of the purported transfer to Sani, Powell remained in possession of the Property, oрenly, notoriously, and adversely to Sani. In response, Sani filed an original counterclaim asserting trespass to try title, wrongful institution of civil proceedings, and seeking declaratory relief that Powell failed to redeem the Property.
In April 2001, Sani moved for summary judgment in favor of all his claims and denying Powell’s claims. Powell then moved for summary judgment in favor of his redemption cause of action. A June 6, 2001 order granting Sani’s motion and denying Powell’s motion was later set aside and a new trial granted.
In October 2001, Powell filed a motion for summary judgment on a single ground, that the automatic stay triggered by Powell’s December 1 bankruptcy filing voided the Tax Sale and invalidated the Deed. Sani filed an amended answer asserting numerous affirmative defenses disputing the availability of bankruptcy protection for Powell and that Powell failed to effectively redeem the Property under section 34.21. Sani filed a first amended counterclaim reasserting his original counterclaims and adding claims for prejudgment interest and declaratory relief declaring that the Tax Sale and Deed were valid. Ames, Powell’s first attorney in this action, intervened in the case in order to secure his attorney’s fees. Ames filed a motion for summary judgment on this claim.
As directed by the trial court, Sani filed a supplemental response to Powell’s motion for summary judgment and Powell filed a supplemental brief in support of his motion for summary judgment. In October 2002, the trial court granted Powell’s motion for summary judgment and denied both Sani’s and Ames’s motions for summary judgment. The trial court denied all of Sani’s causes of action and affirmative defenses. Further, the judgment declared the Property vested in Powell, the Tax Sale void, and the Deed invalid. Finally, the judgment ordered that the sole remaining issue for trial was whether Powell wаs entitled to attorney’s fees under the Declaratory Judgments Act. In January 2003, the trial court granted judgment in favor of Sani and against Powell on the issue of attorney’s fees and concluded that “[a]ll other relief requested in this case not expressly granted is hereby denied.” This appeal followed.
The standards for reviewing a traditional summary judgment are well-established. See Sysco Food Servs., Inc. v. Trapnell,
When reviewing a motion for summary judgment, the court takes the nonmovant’s evidence as true, indulges every reasonable inference in favor of the nonmovant, and resolves all doubts in favor оf the nonmovant. Willrich,
When both parties move for summary judgment, each party bears the burden of establishing that it is entitled to judgment as a matter of law. City of Garland v. Dallas Morning News,
STATUTE OF LIMITATIONS
In his sole issue on appeal, Sani argues that the trial court erred in granting summary judgment in favor of Powell because Powell’s underlying claim was barred by the limitations provision in the Texas Tax Code. See
Typical of statutory limitations provisions, the
Sani moved for summary judgment in favor of all his claims
The record shows that Sani introduced as summary judgment evidence Powell’s deemed admissions to Sani’s first request for admissions, the Deed, and Sani’s receipt for payment in the amount of $7,000 from the Collin County tax assessor-collector. Powell’s deemed admissions include the following:
2. Pursuant to an Order of Sale and Judgment entered on May 20, 1996, by the 199th District Court, in favor of Collin County and Collin County CCD for itself and the use and benefit of the McKinney Independent School District against John Warren Powell, Sr., Cause No. 199-150-96, Constable Jerry Kunkle conducted a public sale of [the Property].
3. On December 2, 1997, the Constable struck off and sold [the Property] to Counter-Plaintiff BASSAMP-OUR for the sum of $7,000.00.
4. After payment to the constable, Counter-Plaintiff received a deed to [the Property] and recorded same in the Deed Records Collin County on December 18, 1997 in Volume 4063, Page 0827.
Sani argues that the Deed, plus Powell’s deemed admissions reciting statutory compliance and the constable’s authority to sell, met the
The San Antonio Court of Appeals’s criticism in Cedillo of the reasoning and authority in Berry is misplaced. That court criticized Berry in what it described as “at least two respects” of Berry’s reasoning.
One point of criticism by the San Antonio Court of Appeals was that this Court relied upon old and distinguishable cases that construed equally old and distinguishable statutory predecessors to the tax code provisions applied in Berry. The San Antonio Court of Appeals wrote that the version of
(a) [A] cause of action relating to the title to property may not be maintained against the purchaser of the property at a tax sale unless the action commences within three years after the deed executed to the purchaser at the tax sale is filed of record.
* * *
(c) When actions are barred by this section, the purchaser at the tax sale or his successor in interest shall be held to have full title to the property, precluding all other claims.
Finally, the San Antonio Court of Appeals referred to the decision of this Court in Berry as no more than dicta. The Ben'y case came to the Dallas Court of Appeаls after the trial court granted an instructed verdict on two grounds, that Berry had established title through (1) her unabandoned prior possession of the property and (2) the ten-year adverse limitations statute. Id. at 391 (citing Berry,
First, as to the San Antonio Court of Appeals’s position that this Court in Berry erroneously interpreted then-current law based on inapplicable and outdated law, we cannot agree. The case law is clear, consistent, and legion that the proponent of a tax deed must prove his right to title by proof of the order of sale. Those cases follow the development and re-enactment оf section 34.01 since 1895. Mills,
Second, the San Antonio Court of Appeals erred in its criticism that the
Third, the San Antonio Court of Appeals’s criticism of Berry is misplaced when it claims the analysis of the requirements for asserting the
Now, we must address the language of
Except as provided by Subsection (b), an action relating to the title to property may not be maintained against the purchaser of the property at a tax sale unless the action is commenced: ... (2) before the second anniversary of the date that the deed executed to the purchaser is filed of record, if on the date that the suit to collect the delinquent tax was filed the property was: (A) the residence homestead of the owner;....
The italicized passages above direct that
Additionally, in Berry, this Court noted another guiding rule of construction: a court must search for reasonable and har
It would be absurd and inconsistent to say that section 34.01 requires documentation of authority, but that a deed holder can simply wait three years after recordation, present only the deed, and then claim the limitations protection due only to a valid deed under section 34.01_ To hold otherwise would extend the protection of limitations to an invalid or void deed that conveys no title.
Id. We conclude that the treatment of
As in Berry, proof of such a sale, for which the statute of limitations affords protection, is not made by mere recitation, but rather by the order of sale itself, along with the deed. Wright v. Vernon Compress Co.,
Having refuted the criticisms of the San Antonio Court of Appeals and reflected upon the current version of
ATTORNEY’S FEES UNDER THE TEXAS DECLARATORY JUDGMENTS ACT
In one cross issue, Powell contends that the trial court abused its discretion in denying his claim for attorney’s fees under the Texas Declaratory Judgments Act. Sani argues the trial court properly denied Powell’s сlaim for attorney’s fees because the Texas Declaratory Judgments Act may not be used to claim fees to which the party would not otherwise be entitled.
A. Applicable Law
“A declaratory judgment action may not be used solely to obtain attorney’s fees that are not otherwise authorized by statute or to settle disputes already pending before a court.” Southwest Guar. Trust Co. v. Hardy Road 13.4 Joint Venture,
B. Application of Law to Facts
Powell brought this action seeking to remove cloud from title, quiet title, cancel the Deed, and recover unspecified damages and attorney’s fеes. In amended petitions, Powell replaced these claims with a request for declaratory relief which pleaded, in effect, a trespass to try title claim. His declaratory judgment pleadings plainly request the court to determine title to the Property:
Plaintiffs seek a declaratory judgment declaring that (i) the judicial sale and subsequent alleged transfer of Property to Purchaser, and execution and recor-dation of the Sheriffs Deed to Purchaser were and are void and of no force and affect, (ii) all right, title and interest and the proper title ownership to the Property remains and vests with Plaintiffs, (iii) the Sheriffs Deed is invalid and unenforceable, and (iv) that any cloud on title of Plaintiffs to the Property be removed and that the Property be quieted in the name of Plaintiffs.
In the prayer at the end of his pleading, Powell requested declaratory relief in pertinent part as follows:
1. judgment declaring (i) the judicial sale and subsequent transfer of Property to Purchaser, execution and recordation of the Sheriffs Deed to Purchaser were and are void and of no force and affect, (ii) all right, title and interest and the proper title ownership to the Property remains and vests with Plaintiffs, (iii) the Sheriffs Deed is invalid and unenforceable, and (iv) that any cloud on title of Plaintiffs to the Property be removed and that the Property be quieted in the name of Plaintiffs.
In substance, Powell’s claim for declaratory relief is a claim to quiet title. Although Powell couches his claims in terms of a request for a declaration, everything he requests of the court is necessary to, and a component of, the ultimate relief he seeks, which is to clear the Property’s title. When the essence of the suit is in trespass to try title, attorney’s fees are not recoverable. Hawk,
CONCLUSION
Having resolved Sani’s single issue on appeal and Powell’s single cross issue against them, we affirm the trial court’s judgment.
MOSELEY, J., dissents with opinion.
Opinion by
Notes
.
. “Anticipating Powell’s argument on this subject,” Sani devotes a substantial portion of his briefs to addressing the merits of the summary judgment. However, Sani does not direct this Court to any trial court error on these points, stating that argument on the merits “does not bear on [his] issue in this appeal.” Therefore, Sani presents nothing for review concerning the merits of Powell’s claim. See
.
. The dissent would reverse and remand for further proceedings based upon the conclusion that a material issue of fact bars Powell’s summary judgment. However, the dissent does not address the precise point raised by Sani. Sani claims we should reverse and render summary judgment in his favor since, in his view,
. This оrder does not appear in the record provided to this Court. However, the parties' pleadings and a letter from the trial court dated December 17, 2001, indicate that on June 25, the trial court announced its intention to set aside the summary judgment and grant a new trial. The parties' pleadings and a docket entry indicate a formal order to this effect was signed on January 4, 2002. On August 29, 2002, the trial court signed a second summary judgment order. Because the record does not indicate a contrary intent, we presume the second judgment vacated the June 6, 2001 judgment. See Quanaim v. Frasco Rest. & Catering,
. These claims included: trespass to try title, declaratory judgment that Powell failed to properly and effectively redeem the Property pursuant to section 34.21, wrongful institution of civil proceedings, and attorney's fees.
. We note that the legislature has brought forward that provision by re-enactment, but there is no indication that the changes abrogated the previous requirements.
Dissenting Opinion
I agree with the majority’s recitation of thе facts of this case, and thus I do not repeat them here in detail. I also agree with the majority’s conclusion that Powell’s
I believe Berry is inapplicable to the case before us. Applying Berry in this case imposes а higher burden than the law recognizes for relying on an affirmative defense to avoid summary judgment, and deviates from the standard of review applicable to such situations. Further, if the language and reasoning in Berry is applicable here, then I would conclude that Berry is incorrect in its interpretation of
Because I believe Sani raised a genuine issue of fact as to each element of his statute of limitations affirmative defense, I would reverse the trial court’s summary judgment and remand for further proceedings.
Tax Code
The Statute
An action relating to the title to property may not be maintained against the purchaser of the property at a tax sale unless it is filed within a certain time period after the tax sale deed was filed of record. See
Sani’s Burden in Opposing Summary Judgment
To obtain his own summary judgment based on
The Summary Judgment Record
Reviewing the record, and applying traditional standards of review, I believe Sani clearly raises at least a fact issue as to each element of his limitations defense. The majority opinion accurately describes the summary judgment record. It includes a copy of the tax deed, showing the deed was recorded “1997/12/18,” more than two years before Powell filed suit (as per the clerk’s record) on August 22, 2000. The record also contained Powell’s deemed admissions that: (1) the constable sold the property at a public sale “[pjursuant to an Order of Sale and Judgment;” (2) “the Constable struck off and sold the property to Counter-Plaintiff BASSAMPOUR ...;” and (3) “[ajfter payment to the constable, Counter-Plaintiff received a deed to the [disputed property] and recorded same in the Deed Records (sic) Collin County on December 18, 1997 in Volume 4063, Page 0827.” In summary, I think there is no dispute that, but for Berry, Sani clearly raised at least a fact issue as to each element of his limitations defense under
The Berry Case
In Berry, however, this Court stated that “in order to invoke [
Berry was a trespass to try title case. The plaintiff, Berry, relied on two of the four means of proving title in a trespass to try title case: prior un-abandoned possession and title by limitations based on more than ten years of adverse possession.
The Court determined that Berry established her claim of prior possession
This Court held that the recitations in Volunteer’s tax deed did not prove its limitations case as a matter of law; instead, to prevail as a matter of law Volunteer had to introduce into evidence the tax judgment and the order of sale. See Berry,
The majority examines Berry, as well as Cedillo v. Gaitan,
Berry Inapplicable
Even if Berry was decided correctly, its facts are distinguishable from this case because of differences in the proof, pleadings, and procedures involved here.
First, there is no indication in Berry that the party opposing the applicability of
Second, there is no indication from Berry that Berry’s pleadings contained anything other than the standard assertions rеquired to assert a trespass to try title claim. See
Third, even if Berry correctly held that, at trial, a party cannot prove its
Therefore, under the facts of this case I would hold that Sani can — and did — raise a fact issue as to each element of his
Berry is Incorrectly Decided
Although this issue need not be reached if we concluded that the facts of Berry were distinguishable from those in this case, I disagree with the majority’s conclusion that Berry correctly held that the only way to prove a
Further, I would hold that Berry’s construction of
Two statements are particularly illustrative of the incorrect logic shaping the result in Berry. First, the opinion in Berry stated that “in order to prove title under a tax deed, the proponent must introduce into evidence the decree of foreclosure and the order of sale.” Berry,
Statutes of limitation such as
In contrast to proving title through the tax deed, title resulting from the application of
I also conclude that use of the word “deed” in
For the purpose of limitation, it is wholly immaterial that the deed conveys no title. An instrument in the form of a deed not void on its face, even though the grantor be wholly without title, satisfies the requirement оf the statute....
The whole object of the statute in requiring a deed and its due registration is to define the boundaries of the claim and give notice to the true owner of such adverse claim. This is accomplished by any apparently valid instrument having the essential parts of a deed. That the deed is in fact void is immaterial. So, likewise, is the ground of its invalidity. The sole inquiry is whether the instrument is a deed within the purview of the statute.
Davis v. Howe,
Thus, a tax deed, even if invalid or without evidence of the judgment or order of sale, may trigger the running of the five-year statute of limitations: “[Wjhile a tax deed which is unsupported by an order of sale does not establish valid legal title, it is admissible for the purpose of showing the nature of the holder’s possession and as a basis for protection of his claim of title under the 5-year statute of limitation.” Bavousett v. Bradshaw,
Powell’s Argument that Deed is Void Based on Bankruptcy Stay
Powell argues on appeal that even if Sani met his burden under
Conclusion
In summary, Sani offered summary judgment evidence that he was the purchaser of the property at a tax sale, the tax sale was conducted pursuant to a judgment and order of sale, the tax deed executed to him was recorded, and Powell’s action relating to title to the property was not commenced within two years of the recording of the tax deed. Taking this evidence as true, indulging every reasonable inference in favor of the non-movant, and resolving any doubts in his favor, as required by the standard of review, Sani raised a genuine issue of fаct as to each of the elements required by
. As does the majority's opinion, I refer to appellants collectively as "Sani” and appel-lees collectively as “Powell.”
. Sani did not move for summary judgment based on limitations.
. The text of
(a) Except as provided by Subsection (b), an action relating to the title to property may not be maintained against the purchaser of the property at a tax sale unless the action is commenced:
(1) before the first anniversary of the date that the deed executed to the purchaser at the tax sale is filed of record; or
(2) before the second anniversary of the date that the deed executed to the purchas-
er is filed of record, if on the date that the suit to collect the delinquent tax was filed the property was:
(A) the residence homestead of the owner.
Tex Tax Code Ann.
.This statement assumes the property was Powell’s residential homestead at the time the tax suit was filed, and thus that the longer, two-year, period applies.
. In a trespass to try title action, the plaintiff must recover, if at all, on the strength of its own title, not the weakness of the defendant’s title. Land v. Turner,
. The doctrine of prior possession is based on the theory that one in possession should not be disturbed except by another person who has better title. Reiter v. Coastal States Gas Producing Co.,
. At the time Berry was decided and the property in this case was sold, this language was found in
.Wright construed former article 1059 of the revised civil statutes. This article was repealed with the enactment of the tax code. Property Tax Code, 66th Leg., R.S., ch. 841, § 6, 1979 Tex. Gen. Laws 2217, 2329. Article 1059, quoted on pages 520-21 in Wright, provided that a tax deed would be prima facie evidence of certain facts and conclusive evidence of other facts. See Wright,
. Again, Bassampour is one of the defendants referred to collectively as "Sani" here and in the majority opinion.
. Further, as the majority recognizes (in the context of Powell's attоrney's fee claim), the face of Powell's original petition, as well as his third amended petition, make clear the substance of his claim for declaratory relief is a claim to quiet title, and that the essence of his suit is in trespass to try title. Thus, it is undisputed that Powell’s action related to title to the disputed property. See Martin v. Amerman,
. Unlike civil practice and remedies code
. Sani argues he proved the limitations defense as a matter of law based on the deed and Powell's admissions and asks use to reverse and render judgment in his favor. However, Sani never moved for summary judgment on the ground that Powell's claims were barred by limitations. Thus, even if Sani is correct, we cannot reverse and render judgment on a ground not raised in his motion for summary judgment.