Lua v. Capital Plus Financial addressed, and rejected, a number of challenges to a judgment of eviction in a forcible entry and detainer action. In particular, as to the appellants’ claim that “because Capital Plus failed to submit an affidavit verifying its observance of certain requirements prior to the sale of the property, there are defects in the sale,” the Fifth Court distinguished the main case relied upon by appellants:

The Luas rely on A Plus Investments Inc v Rushton, No. 02-03-00174-CV, 2004 WL 868866 (Tex. App.—Fort Worth Apr. 22, 2004, no pet.) (mem. op.), for the proposition that the alleged defect in the statutorily-required presuit notice required the trial court to abate or dismiss this case. However, A Plus held that the county court lacked jurisdiction over a forcible detainer suit “[b]ecause an unresolved question of title was so intertwined with the right of possession that the action could not have been adjudicated without first determining title.” … Accordingly, the defect alleged by the Luas does not present the same fundamental issue that was present in A Plus.”

No. 05-19-01227-CV (May 26, 2022).

Justice Pedersen‘s first appearance in this blog provides a succinct reminder about a basic principle of foreclosure litigation: “[A] foreclosure sale may be set aside if the creditor fails to provide the notice required by statute.  However, any challenge to the sale of property under a deed of trust must be brought in a separate suit in which title issues can be determined, not in an action for forcible detainer.” Smith v. Deutsche Bank, No. 05-17-01022-CV (Jan. 16, 2019) (mem. op.)

While we’ve skipped blogging about most of the Dallas Court of Appeals’ forcible detainer cases — long story short, lenders routinely evict residents when the mortgage hasn’t been paid — this one is not exactly routine. The trial court awarded possession of a Burger King restaurant to the landlord, Huge American Real Estate after the tenant remodeled the restaurant without obtaining Huge American’s consent. The Court of Appeals sustained the trial court’s finding that the remodel was a material breach of the lease agreement, holding that Fritz Management’s continued payment of rent did not obviate the contractual requirement of consent to any renovations.

Fritz Mgmt., LLC v. Huge Am. Real Estate, Inc., No. 05-14-00681-CV

The plaintiffs defaulted on their mortgage and were then removed from the house via a forcible detainer action filed in Collin County.  They appealed, arguing that the trial court erred by admitting as a business record several notices of eviction sent to them in the mail.  The plaintiffs’ primary argument was that the witness who laid the foundation through an affidavit was not qualified.  The Dallas Court of Appeals disagreed, noting that “Rule 803(6) does not . . . require a witness laying the predicate for introduction of a business record to be the creator of the document or even an employee of the company keeping the record.” All that is required is that he/she have personal knowledge of the facts contained within the business record.

Singha v. FNMA

Victor Enterprise, Inc. filed and won a forcible detainer action to collect rent from his tenant, Clifford Holland, for August 2009.  While that action was appealed by Holland, VEI filed another forcible detainer to collect rent for December 2009, which he also won, but the county court signed an order suspending execution of the writ of possession.  VEI then filed a third forcible detainer action to collect rent for January 2010, which he also won, but the county court enjoined VEI from “initiating, prosecuting, or executing any litigation, action or writ that seeks possession of or eviction of the defendant form his residence.”   In the meantime, Holland sought (and obtained) a temporary restraining order in county court requiring VEI to cease prosecuting actions against Holland and to prohibit any sheriff or constable from executing any writ against Holland.  On appeal, the Court granted VEI’s request for mandamus, noting that “the county court lacks jurisdiction to interfere with the enforcement of the justice court’s unappealed judgments.” It also found that, given the history of this case, “the writ will issue instanter.”

In re Victor Enters., Inc.

In this forcible detainer action, the trial court dismissed American Homes 4 Rent’s (AH4R) attempt to evict the defendant because AH4R could not prove that it had title to the property at issue.  Specifically, the trial court based its dismissal on the defendant’s argument that she had filed bankruptcy the day before AH4R bought the property and thus its purchase was void because it had violated the automatic stay.  The Court of Appeals reversed the trial court’s dismissal, because to prevail in a forcible detainer action, “a plaintiff is not required to prove title, but is only required to show sufficient evidence of ownership to demonstrate a superior right to immediate possession.”

American Homes 4 Rent Props. One LLC v. Ibarra

The Court of Appeals has once again reiterated that the sole issue in a forcible detainer case is the right to immediate possession of the property. Both the justice court and the county court at law sided with Wells Fargo, which had purchased the home in foreclosure. On appeal, the borrowers argued that Wells Fargo had not shown itself to be an assignee of the original deed of trust, and that notice of the foreclosure sale had not been properly recorded. Because those issues alleged defects in the bank’s title and the foreclosure process, and not the right to immediate possession, they could not  be addressed in a forcible detainer action. The Court of Appeals therefore affirmed the lower courts’ rulings awarding possession to Wells Fargo.

Noye v. Wells Fargo Bank, N.A., No. 05-12-00997-CV

As the Court held in a similar case two weeks ago, the recitals in a trustee’s deed fall into an exception to the hearsay rule and should be admitted into evidence because the recitals are “relevant to the purpose of the document.”

CitiMortgage v Sczepanik

In this forcible detainer action, the defendant disputed the validity of the foreclosure sale in light of an automatic bankruptcy stay that had been issued. The Court noted, however, that under Texas Rule of Civil Procedure 746, the only issue that may be adjudicated in a forcible detainer action is the right to actual possession.  Accordingly, because the validity of of the foreclosure sale in light of a bankruptcy stay goes to the merits of the title, the Court held that this issue may not be raised in a forcible detainer action and rejected the defendant’s argument.

Stonebreaker v. FNMA

The court affirmed a judgment in favor of FNMA in this forcible detainer action. After Henning defaulted on a promissory note, FNMA purchased the property in foreclosure and demanded that Henning vacate. FNMA filed a forcible detainer proceeding and received a judgment awarding it possession.

After losing on appeal to the county court at law, Henning appealed to the district court arguing that the lower courts lacked jurisdiction because this was a suit over title to land. The court noted that a forcible detainer action only determines immediate right to possession. Further, a separate lawsuit to determine title does not deprive a court of jurisdiction over a forcible detainer action unless determining who has the right to immediate possession necessarily requires resolution of the title dispute. Because it was not necessary for the trial court to determine whether the foreclosure was valid and to resolve the title dispute before awarding possession to FNMA, it had jurisdiction.

Henning v. Federal National Mortgage Association, No. 05-12-00726-CV

The court reversed a county court’s judgment in favor of a resident in a forcible detainer action and rendered judgment of possession in favor of the bank. After acquiring the property at a foreclosure sale and attempting to remove Mr. Carman, OneWest file a forcible detainer action. At trial OneWest provided the deed of trust, the substitute trustee’s deed, and notices to vacate the property that were served on Carman. The trial court found that OneWest did not have the right to possess, but noted that it could go through the process again with the correct paperwork. On appeal, the court held that OneWest had a claim to immediate possession of the property based on the deed of trust, which stated that Carman would become a tenant-at-sufferance in the case of a foreclosure and that OneWest could remove Carman from the property. This served as an independent basis on which the trial court should have determined that OneWest was entitled to immediate possession of the property.

OneWest Bank v. Carman, No. 05-12-00100-CV

The court reversed and remanded a forcible-detainer and unpaid rent default judgment. The tenants moved from the landlord’s property prior to the action, which the landlord won in the justice court. The tenants appealed to the county court, but failed to appear for trial and court granted the landlord all of its requested relief. In a motion for new trial and attached affidavits, the tenants asserted that they received no notice of the trial setting. Despite the fact that the tenants had included the new, correct address in their pleading, the court sent their notice to their old address at the landlord’s apartment complex. The tenants failed to set a hearing on the motion, however, which was then overruled by operation of law.

On appeal, the court held that the tenants established lack of notice of the trial setting, and thus that the default judgment on the landlord’s action for unpaid rent and attorney’s fees should be set aside and the case remanded for trial. The court also held that the landlord’s forcible-detainer action was moot because possession was already relinquished.

Batie v. Cimarron, No. 05-11-00024-CV

The court vacated and reversed and rendered the trial court’s judgment in a forcible-detainer action awarding the Plaintiff possession of the property, damages, and attorney’s fees. The Daftarys commercial real estate lease with HSM expired in 2008, and they sought to exercise a three-year renewal option. The parties did not execute a written extension, but the Daftarys continued paying rent for over a year beginning in July 2008. In December 2009, HSM requested that the Daftarys either execute a new long-term lease or vacate, and when the Daftarys refused filed this forcible-detainer action. On the morning of trial, the Daftarys relinquished the keys to the property and tendered possession of the space to the court and then argued that the case was moot because it no longer presented an issue about which party was entitled to possession. The trial court proceeded to a bench trial, awarding HSM possession, damages for the rental difference, and attorney’s fees.

On appeal, the court held that the issue of possession was moot, but that HSM’s claims for damages and attorney’s fees incurred defending possession presented live controversies. HSM failed to show sufficient evidence of damages, however, because they only presented evidence that the property’s rental value had increased in July 2008, and presented no evidence of value in December 2009 when their right to possession accrued. And because the trial court lacked jurisdiction to consider the possession issue and erred by awarding HSM’s damages, HSM was no longer the prevailing party and could not collect attorney’s fees.

Daftary v. Prestonwood Market Square, No. 05-11-00673-CV

In this forcible detainer action, Jackqueline McDaniel (the mortgagee in default) challenged the trial court’s decision to grant HSBC’s (the purchaser at the foreclosure auction) possession of the premises because, according to McDaniel, HSBC did not present any evidence of its landlord-tenant relationship with her. But HSBC had introduced the deed of trust and the foreclosures sale deed, and together these instruments demonstrated that (1) the landlord-tenant relationship, which arose following McDaniel’s default and (2) evidence that HSBC purchased the property at a public auction. Thus, HSBC established its right to immediate possession of the property and the Court of Appeals affirmed the trial court’s judgement.

McDaniel v HSBC Bank

The court affirmed a judgment in a forcible detainer action awarding possession of a property purchased at a foreclosure sale to the buyer. The owners of a property defaulted on their promissory note, and the property was sold to FHLMC in foreclosure. FHLMC notified the former owners to vacate twice, the first in three and the second in ninety days, and eventually filed a petition for forcible detainer. After the former owners failed to object to FHLMC’s evidence or present any evidence of their own, FHLMC was awarded judgment. The former owners appealed arguing that the petition insufficiently identified the property and that the notice to vacate was insufficient. The court rejected both arguments, holding that the petition was sufficiently identified the property by including the address of the property and that the evidence of the notices to vacate was sufficient to support the judgment.

Caro v. FHLMC, No. 05-11-01023-CV

Fannie Mae might sound like somebody’s sweet old grandma, but this grandma knows how to get defaulting borrowers out of the property.  In this instance, the borrower’s mortgage provided that if the house went into foreclosure, he would have to either surrender possession immediately or he would become a tenant at sufferance.  The borrower defaulted, the property was sold at foreclosure, and the buyer sold the property to the Federal National Mortgage Association.  Fannie Mae sent notices to vacate by certified and first class mail, then filed a forcible detainer proceeding.  Both the justice court and the county court at law (in a de novo appeal) ruled in favor of Fannie Mae, and the court of appeals affirmed.  The court held that the tenant at sufferance provision in the mortgage was legally sufficient to establish a landlord-tenant relationship between Fannie Mae and the borrower.  The court of appeals also rejected the borrower’s claim that Fannie Mae had failed to prove it had given him notice of the eviction, holding that delivery of the notice was adequately established by testimony that the copy sent by first class mail had not been returned by the postal service.  Finally, the court of appeals rejected the borrower’s claim that the forcible detainer proceeding should have been abated in favor of a separate lawsuit he had filed in district court to contest title to the property.  Because forcible detainer only determines immediate possession of the property, a separate title contest does not deprive the court of jurisdiction to decide who gets possession of the property in the meantime.

Farkas v. Federal National Mortgage Ass’n a/k/a Fannie Mae, No. 05-11-01416-CV

While the blog has been quiet for a while, the justices at the original 600 Commerce have been clearing out a lot of summary dismissals lately (not to mention handling their usual docket of criminal and family law cases, which we generally don’t blog about here).  Three of those short dismissal opinions today turn on issues that may be of some interest.

In Earth Energy Utility Corp. v. Environmentally Engineered Equipment, Inc., No. 05-10-01610-CV, the court of appeals had previously granted leave for the appellant’s attorneys to withdraw.  The court instructed the appellant corporation that it needed to provide notice of the identity of substitute counsel, and even granted an additional 45 days to do so.  Four months later, the appellant still had not obtained successor counsel, and so the court dismissed the appeal.  The lesson: Corporations still can’t represent themselves pro se.

In Bryant v. US Bank, N.A., No. 05-11-00121-CV, the court of appeals dismissed the appeal due to the appellant’s lack of standing.  The appellant had certainly had standing to defend the case when US Bank sued her in a forcible detainer proceeding, but the trial court subsequently dismissed the bank’s case for want of prosecution.  For some reason, the defendant sought appellate review of the DWOP.  Because her rights were not prejudiced when the trial court dismissed the bank’s case against her, the court of appeals determined that she lacked standing to appeal.

Finally, in Olanya v. U.S. Bank, N.A., No. 05-11-00878, the bank had actually been awarded judgment for possession in another forcible detainer case.  But the defendant did not supercede the judgment pending appeal, and the bank took possession of the property.  Since the entire point of a forcible detainer claim is to obtain immediate possession of the property, and that had already occurred, the issue of immediate possession had been rendered moot.  Accordingly, the court dismissed the appeal.

Appellants leased property in Heath, Texas.  Under the lease, they were granted the option to buy, which they claim they exercised (even though no closing ever occurred and no title ever passed).  Appellees, the landlords, sought to evict the Appellants for violations of the local HOA rules and for failure to pay rent.

The issue the Court of Appeals decided was a narrow one:  whether, because Appellants exercised the option to purchase the property, there was no longer a landlord-tenant relationship between the parties so that a forcible entry and detainer suit was improper.  The Court found that, even if Appellants exercised the option, they do not have title–equitable or otherwise–and thus rejected Appellants’ argument that a forcible detainer action was improper.

Lugo v. Ross, No. 05-11-00517-CV

In a memorandum opinion, the court affirmed the trial court’s judgment in a forcible detainer action. Felix Hornsby executed a promissory note secured by a deed of trust covering the property at issue. After he defaulted on the note, U.S. Bank bought the property at foreclosure sale and conveyed it to the Secretary of Veteran Affairs. The SVA brought this forcible detainer action against Hornsby, and the trial court rendered judgment in favor of the SVA. On appeal, Hornsby argued that the SVA had to show it was entitled to enforce the terms of the deed of trust in order to establish a landlord-tenant relationship between them, but failed to do so. The court held that SVA presented sufficient evidence to show its superior right to possession of the property and that Hornsby’s challenge to the chain of title could not be properly adjudicated in a forcible detainer action.

Hornsby v. Secretary of Veterans Affairs, No. 05-11-01075-CV