Alejandro Hernandez v. Alberto Enrique Hernandez and Reynaldo Aaron Morales

Opinion

COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS

ALEJANDRO HERNANDEZ, § No. 08-19-00091-CV Appellant, § Appeal from the v. § County Court at Law No. 3 ALBERTO ENRIQUE HERNANDEZ and § REYNALDO AARON MORALES, of El Paso County, Texas § Appellees. (TC# 2018-CCV01804) §

OPINION

Appellant Alejandro Hernandez (“Hernandez”), appearing pro se, appeals from the trial

court’s denial of his application for a temporary injunction in the underlying bill of review

proceeding initiated by Hernandez against Appellees Alberto Enrique Hernandez and Reynaldo

Aaron Morales (collectively, “Morales”). We affirm.

BACKGROUND

Hernandez was a tenant of certain property (“Property”) under a purported oral lease. U.S.

Bank Trust foreclosed on the Property and, on February 2, 2017, Morales placed a winning bid for

the purchase of the Property in an online auction. Morales executed a purchase agreement

(“Agreement”) for the Property the next day. Under that Agreement, U.S. Bank Trust was

obligated to deliver a deed and convey title to Morales upon the completion of certain conditions to closing the transaction. On February 27, 2017, U.S. Bank Trust executed a Special Warranty

Deed, which was held in escrow until March 16, 2017, or the date of the closing when Morales

received delivery of the deed. In the meantime, while the deed remained in escrow, U.S. Bank

Trust had executed a writ of possession and took possession of the Property on March 13, 2017.

In April 2017, Hernandez filed an application for writ of reentry in an El Paso County

justice court, alleging that Morales had unlawfully evicted him and locked him out of the Property

on March 13, 2017. See TEX. PROP. CODE ANN. §§ 92.0081, 92.009. The justice court denied

the application and Hernandez appealed to the County Court at Law No. 3. That case is cause

number 2017-CCV00661, styled Alejandro Hernandez and the Freedom Indeed Foundation, Inc.

v. Alberto Enrique Hernandez and Reynaldo Aaron Morales (“Cause 00661”). The court in

Cause 00661 concluded that title to the Property was not conveyed to Morales until March 16,

2017, after Hernandez was evicted or locked out. The court therefore denied the application for

writ of reentry and dismissed the cause with prejudice.

Hernandez appealed to this Court. See Hernandez v. Hernandez, 547 S.W.3d 898 (Tex.

App.—El Paso 2018, pet. denied) (“Hernandez I”). We rejected Hernandez’s contention that

Morales acquired title to the Property on February 27, 2017, when U.S. Bank Trust signed the

Special Warranty Deed. Id. at 900-901. We held, in agreement with the trial court, that title to

the Property was not conveyed until March 16, 2017, after U.S. Bank Trust executed its writ of

possession on March 13, 2017. Id. Morales therefore did not owe any duties to Hernandez

concerning his eviction from the Property. Id.

Hernandez filed the present action as a bill of review stemming from the trial court’s order

in Cause 00661 denying his application for writ of reentry and dismissing the cause with prejudice.

2 He alleges that he was prevented from making a meritorious claim, through no fault of his own,

due to fraud and misrepresentation by Morales. More particularly, Hernandez alleges that the

copy of the Agreement Morales filed in Cause 00661 misrepresented the scope of Morales’s legal

obligations to Hernandez under that Agreement because the copy was redacted and incomplete.

Hernandez filed an application for temporary restraining order and temporary injunction,

asserting that Morales contractually assumed the rights of the tenants in possession of the Property,

and became subject to the requirements of the Protecting Tenants at Foreclosure Act of 2009 1

(“Act”), immediately upon executing the Agreement on February 3, 2017. He further asserted

that, on that date, he was a bona fide tenant in possession of the Property to whom Morales owed

a duty under the Act to provide 90-days’ notice to vacate. See Pub.L. No. 111–22, § 702(a)(1),

(2), 123 Stat. 1632, 1661. It is undisputed that Morales did not provide such notice.

Morales raised four arguments in response: (1) the application fails on the merits because

Hernandez cannot establish a probable right to relief or any probable, imminent, irreparable injury;

(2) Hernandez waited too long to seek injunctive relief; (3) a temporary injunction proceeding is

not a proper means of trying the issue of possession of property; and (4) granting Hernandez’s

requested temporary injunction would alter the status quo.

On March 29, 2019, the trial court signed an order denying the application for temporary

restraining order and temporary injunction. Hernandez now appeals.

ISSUE

1 Protecting Tenants at Foreclosure Act of 2009, Pub.L. No. 111–22, §§ 701-704, 123 Stat. 1632, enacted May 20, 2009.

3 Hernandez raises one issue, asserting that the trial court abused its discretion by denying

his application for temporary injunction. Morales requests in a cross-point that this Court impose

sanctions on Hernandez for filing a frivolous appeal.

STANDARD OF REVIEW

The denial of an application for temporary injunction is reviewed for abuse of discretion.

Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993); Davis v. Huey, 571 S.W.2d 859, 861-62 (Tex.

1978). A court abuses its discretion if it acts “without reference to any guiding rules and

principles” or if “the act was arbitrary or unreasonable.” Downer v. Aquamarine Operators, Inc.,

701 S.W.2d 238, 241–42 (Tex. 1985).

DISCUSSION

Temporary injunction

The purpose of a temporary injunction is to preserve the status quo pending a trial on the

merits. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002); Walling, 863 S.W.2d at 57.

“To obtain a temporary injunction, the applicant must plead and prove three specific elements: (1)

a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable,

imminent, and irreparable injury in the interim.” Butnaru, 84 S.W.3d at 204.

“An injunction plaintiff need not establish the correctness of his claim to obtain temporary

relief, but must show only a likelihood of success on the merits.” DeSantis v. Wackenhut Corp.,

793 S.W.2d 670, 686 (Tex. 1990). In other words, the applicant is not required to show he will

prevail at trial. Fuentes v. Union de Pasteurizadores de Juarez Sociedad Anonima de Capital

Variable, 527 S.W.3d 492, 499 (Tex. App.—El Paso 2017, no pet.); City of El Paso v. Caples

Land Co., 408 S.W.3d 26, 37 (Tex. App.—El Paso 2013, pet. denied). He need only “plead a

4 cause of action and present some evidence that tends to sustain it.” Caples Land Co., 408 S.W.3d

at 38; see Fuentes, 527 S.W.3d at 499.

The basis of Hernandez’s bill of review claim is that Morales failed to provide him with a

90-day notice to vacate as required by the Act. See Pub.L. No. 111–22, § 702(a)(1), (2), 123 Stat.

1632, 1661. Hernandez previously asserted in Cause 00661 that Morales had a duty to provide

him with such notice based on the theory that Morales acquired title on February 27, 2017 (prior

to Hernandez’s eviction) when U.S. Bank Trust signed the Special Warranty Deed. See

Hernandez, 547 S.W.3d at 900-901. This Court rejected that claim in Hernandez I, holding

instead that Morales did not acquire title to the Property until after Hernandez had been evicted

and therefore owed no duty to provide him with a 90-day notice. Id. at 901.

Hernandez now contends that he was prevented from fully asserting his wrongful eviction

claim by Morales’s allegedly fraudulent and misleading submission of a redacted copy of the

Agreement. Hernandez argues that the full Agreement demonstrates that Morales was

contractually “obligated to assume the rights of the tenants in possession and be subject to the

Protecting Tenants at Foreclosure Act of 2009,” regardless of when he acquired title. Hernandez

urges that he was a third-party beneficiary of the Agreement and that Morales therefore owed him

legal duties, including the duty to provide 90 days’ notice, as of February 3, 2017, the date Morales

executed the Agreement. See City of Houston v. Williams, 353 S.W.3d 128, 145 (Tex. 2011);

Stine v. Stewart, 80 S.W.3d 586, 589 (Tex. 2002). The issue before this Court, then, is whether

Hernandez demonstrated a likelihood of succeeding on the merits of his claim to be a third-party

beneficiary of the Agreement. DeSantis, 793 S.W.2d at 686.

“[A] person seeking to establish third-party-beneficiary status must demonstrate that the

5 contracting parties intended to secure a benefit to that third party and entered into the contract

directly for the third party’s benefit.” First Bank v. Brumitt, 519 S.W.3d 95, 102 (Tex. 2017)

(internal quotation marks omitted); see Stine, 80 S.W.3d at 589. “It is not enough that the third

party would benefit—whether directly or indirectly—from the parties’ performance, or that the

parties knew that the third party would benefit.” Brumitt, 519 S.W.3d at 102; see Sharyland

Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 421 (Tex. 2011) (person is not a third-party

beneficiary merely because he is directly affected or may have a substantial interest in a contract’s

enforcement).

The question of third-party beneficiary status is determined by reference to the contract

language alone. Brumitt, 519 S.W.3d at 102. The court begins with the presumption that the

parties contracted only for themselves. Id. at 103. That presumption may be overcome only if

the contract contains a clear and unequivocal expression of the parties’ intent to directly benefit a

third party. Id.; Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex. 2011). Any doubt concerning the

parties’ intent must be resolved against conferring third-party beneficiary status. Brumitt, 519

S.W.3d at 103; Tawes, 340 S.W.3d at 425.

The specific portions of the Agreement on which Hernandez relies state as follows:

• The Close of Escrow is further subject to each of the following conditions precedent . . . the Title Insurance Company . . . shall have irrevocably committed to issue to Buyer an owner’s policy of title Insurance covering the Property . . . subject to any and/or all of the following[:]

. . . Rights of existing tenants and/or occupants of the Property, if any[.]

...

• Buyer acknowledges that Buyer may be subject to the Protecting Tenant’s [sic] at Foreclosure Act of 2009, set forth as Division A, Title VII of the Helping

6 Families Save Their Homes Act of 2009 [Pub.L. 111-22, 123 Stat. 1632, S. 896, enacted May 20, 2009] (the “Act”) or state law, as applicable.

Nothing in these provisions, or in the Agreement as a whole, clearly and unequivocally

expresses that the parties intended to secure a benefit to Hernandez, or any other third party, and

entered into the Agreement directly for any third party’s benefit. See Brumitt, 519 S.W.3d at 102;

Stine, 80 S.W.3d at 589. At most, these provisions reflect that a person who was a tenant or

occupant of the Property at the time of closing might benefit from its provisions. But the supreme

court has repeatedly held that the fact that a contract may result in a benefit to a third party is

insufficient to overcome the presumption that the parties contracted only for themselves. See,

e.g., Brumitt, 519 S.W.3d at 102; Sharyland Water Supply, 354 S.W.3d at 421. Rather, the

essential element is that the contracting parties intended to directly benefit a third party. Brumitt,

519 S.W.3d at 102-103.

Hernandez’s bill of review claim is predicated on his status as a third-party beneficiary of

the Agreement. But the Agreement—the only relevant evidence—does not contain any language

supporting that status. See Brumitt, 519 S.W.3d at 102 (third-party status is determined by

reference to contract language alone). On the contrary, the Agreement as a whole demonstrates

that its purpose was to convey ownership of the Property from U.S. Bank Trust to Morales, not to

benefit Hernandez. See Sharyland Water Supply, 354 S.W.3d at 421. Hernandez did not present

any evidence tending to sustain his claim of third-party beneficiary status. See Caples Land Co.,

408 S.W.3d at 38; Fuentes, 527 S.W.3d at 499. Consequently, he did not sustain his temporary

injunction burden of demonstrating a likelihood of success on the merits.2 DeSantis, 793 S.W.2d

2 Because we hold that Hernandez did not demonstrate a likelihood of success on the merits, we need not address whether he demonstrated probable, imminent, and irreparable injury, or whether the requested temporary injunction

7 at 686.

The trial court did not abuse its discretion by denying Hernandez’s application for a

temporary injunction. Hernandez’s sole issue on appeal is overruled.

Frivolous appeal

Morales requests that this Court find that Hernandez’s appeal is frivolous and assess

damages under Rule 45 of the Texas Rules of Appellate Procedure. See TEX. R. APP. P. 45.

While we acknowledge our authority to award just damages if we determine that an appeal is

frivolous, “we exercise that authority only if the record shows that the appellant did not act in good

faith and had no reasonable expectation of reversal.” In re M.D.G., 527 S.W.3d 299, 306 (Tex.

App.—El Paso 2017, no pet.); see Faddoul, Glasheen & Valles, P.C. v. Oaxaca, 52 S.W.3d 209,

213 (Tex. App.—El Paso 2001, no pet.). Further, we “keep in mind that an appellate court must

exercise its discretion under Rule 45 with caution and only after careful consideration.” In re

M.D.G., 527 S.W.3d at 306.

To determine whether to assess damages under Rule 45, “we look at the record from the

viewpoint of the pro se appellant and determine whether he had reasonable grounds to believe the

judgment should be reversed.” Id.; see Faddoul, 52 S.W.3d at 213. Morales contends that

Hernandez had no reasonable grounds to believe his claim would succeed because he is simply

relitigating “the same facts and issues” as were already resolved against him by this Court in

Hernandez I. We disagree.

Hernandez’s argument in Hernandez I was that Morales acquired title to the Property on

February 27, 2017, when U.S. Bank Trust signed the Special Warranty Deed. He asserted that

would alter the status quo. See Butnaru, 84 S.W.3d at 204.

8 the acquisition of title is what triggered Morales’s duty to give notice. See Hernandez, 547

S.W.3d at 900. Hernandez’s present argument is that he became a third-party beneficiary of the

Agreement at the time it was executed by Morales on February 3, 2017, and the creation of that

status is what triggered Morales’s duty to give notice.3 He contends that he was prevented from

raising this issue in the earlier proceeding because he was unaware of the contractual terms

allegedly giving rise to his third-party beneficiary status due to Morales’s failure to produce a

complete copy of the Agreement. Thus, Hernandez’s bill of review—and this appeal—involve

additional facts and a different issue than were presented in Hernandez I.

We have determined above that Hernandez’s third-party beneficiary argument lacks merit.

Even so, looking at the record from his viewpoint, and recognizing the legal and factual

distinctions from Hernandez I, we cannot conclude that Hernandez did not act in good faith and

had no reasonable expectation of reversal. See In re M.D.G., 527 S.W.3d at 306; Faddoul, 52

S.W.3d at 213. Morales’s cross-point is overruled.

CONCLUSION

The order of the trial court denying Hernandez’s application for temporary injunction is

affirmed. Morales’s request for damages pursuant to Rule 45 is denied.

GINA M. PALAFOX, Justice February 6, 2020

Before Alley, C.J., Rodriguez, and Palafox, JJ.

3 While Hernandez did not expressly use the term “third-party beneficiary” in his bill of review, that pleading can fairly be read as asserting such status. For example, Hernandez pleaded that the unredacted Agreement establishes Morales’s obligations to Hernandez under that Agreement. Hernandez does expressly use the term “third-party beneficiary” in his appellate briefing and discusses case law regarding third-party beneficiary status.