Opinion issued February 6, 2020
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-18-00909-CV ——————————— C. LUGRAND DAWKINS ENTERPRISES, LLC, Appellant V. WANDERSTAY HOTEL, LLC D/B/A WANDERLUST HOUSTON, Appellee
On Appeal from the 189th District Court Harris County, Texas Trial Court Case No. 2018-39075
MEMORANDUM OPINION
In this interlocutory appeal,1 appellant, C. Lugrand Dawkins Enterprises, LLC
(“Lugrand Dawkins”), challenges the trial court’s order, titled “Judicial Finding of
Fact and Conclusion of Law Regarding a Documentation or Instrument Purporting
1 See TEX. GOV’T CODE ANN. § 51.903(c). to Create a Lien or Claim,” declaring that there was no valid lien or claim created by
Lugrand Dawkins’s affidavit claiming a mechanic’s lien against appellee,
Wanderstay Hotel, LLC, doing business as Wanderlust Houston (“Wanderlust”). In
five issues, Lugrand Dawkins contends that the trial court erred in granting
Wanderlust’s “1st Amended Motion for Judicial Review of Lien.”2
We reverse and remand.
Background
In its second amended petition, Wanderlust, a hotel, alleged that it executed
an agreement with Lugrand Dawkins, a general contractor, to provide general
contractor services related to the renovation of Wanderlust’s hotel property.
Throughout the renovation process Lugrand Dawkins failed to make progress
according to the parties’ agreed-upon schedule, although Wanderlust “faithfully
made payments” to Lugrand Dawkins. Eventually, the parties reached an impasse,
and Wanderlust “had to hire the services of an additional contractor to correct the
work already done and [to] finish the work that ha[d] not been completed.” And
although Lugrand Dawkins failed to complete its work, it “expect[ed] additional
payments” from Wanderlust.
2 See id.
2 Wanderlust asserted claims against Lugrand Dawkins for breach of contract,
negligence, violations of the Texas Deceptive Trade Practices Act, 3 and fraudulent
lien.4 Related to its fraudulent lien claim, Wanderlust challenged the validity of
Lugrand Dawkins’s “Affidavit Claiming a Statutory and Constitutional Lien,” which
it had filed with the Harris County Clerk’s Office. Wanderlust attached to its second
amended petition, among other things, the “Affidavit Claiming a Statutory and
Constitutional Lien.”
Lugrand Dawkins answered, generally denying Wanderlust’s allegations and
asserting certain defenses and counterclaims.
Wanderlust then filed its “1st Amended Motion for Judicial Review of Lien.”5
In its motion, Wanderlust asserted that on June 15, 2018, Lugrand Dawkins filed its
“Affidavit Claiming a Statutory and Constitutional Lien” with the Harris County
Clerk’s Office; the representations made in the “Affidavit Claiming a Statutory and
Constitutional Lien” were false; Wanderlust had paid Lugrand Dawkins $82,000
under the parties’ agreement; Lugrand Dawkins only completed around $30,000
worth of work under the parties’ agreement; Wanderlust did not owe Lugrand
Dawkins any money; and Lugrand Dawkins “clearly knew or should have known
3 See TEX. BUS. & COM. CODE ANN. § 17.46. 4 See TEX, CIV. PRAC. & REM. CODE ANN. § 12.002. 5 See TEX. GOV’T CODE ANN. § 51.903.
3 [that] the document [it] recorded was fraudulent and not based upon any facts.” Thus,
Wanderlust sought, among other things, judicial review of Lugrand Dawkins’s
purported lien, under section 51.903 of the Texas Government Code.6 Wanderlust
attached to its motion Lugard Dawkins’s “Affidavit Claiming a Statutory and
In its response to Wanderlust’s motion, Lugrand Dawkins asserted that its lien
was not fraudulent because it was filed in the form of a mechanic’s lien as authorized
by Texas law and that the question of the lien’s validity was improper, as it exceeded
the scope of Texas Government Code Chapter 51.
After a hearing on Wanderlust’s motion, the trial court entered an order, titled
“Judicial Finding of Fact and Conclusion of Law Regarding a Documentation or
Instrument Purporting to Create a Lien or Claim,” declaring that there was no valid
lien or claim created by Lugrand Dawkins’s “Affidavit Claiming a Statutory and
Constitutional Lien.” The trial court’s findings of fact and conclusions of law
invoked its authority under Texas Government Code Chapter 51 and declare that
Lugrand Dawkins’s “Affidavit Claiming a Statutory and Constitutional Lien”
(1) [WAS] NOT provided for by specific state or federal statutes or constitutional provisions; (2) [WAS] NOT created by implied or express consent or agreement of the obligor, debtor, or the owner of the real or personal property or an interest in the real or personal property, if required under the law
6 See id. 4 of this state or by implied or express consent or agreement of an agent, fiduciary, or other representative of that person; (3) [WAS] NOT an equitable, constructive, or other lien imposed by a court of competent jurisdiction created by or established under the constitution or laws of this state or the United States; or (4) [WAS] NOT asserted against real or personal property or an interest in real or personal property. There [was] no valid lien or claim created by this documentation or instrument.
Lien
In its first and second issues, Lugrand Dawkins argues that the trial court erred
in granting Wanderlust’s “1st Amended Motion for Judicial Review of Lien”
because Lugrand Dawkins’s lien was “a Texas Property Code Chapter 53
Mechanic’s Lien and Texas Constitutional Lien” and Wanderlust “sought . . . relief
beyond the permissible scope of Texas Government Code [sections] 51.901
and . . . 51.903.”
A. Jurisdiction
Initially, we consider whether we have jurisdiction to review Lugrand
Dawkins’s challenge to the trial court’s interlocutory order, declaring that there was
no valid lien or claim created by Lugrand Dawkins’s “Affidavit Claiming a Statutory
and Constitutional Lien.” Texas Government Code section 51.903 confers appellate
jurisdiction to review a trial court’s finding about whether a document purporting to
create the lien is presumed to be fraudulent. Cardenas v. Wilson, 428 S.W.3d 130,
132 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (holding “we have appellate
5 jurisdiction to review a trial court’s interlocutory orders under section 51.903 of the
Texas Government Code”); see also TEX. GOV’T CODE ANN. § 51.903(c) (“An
appellate court shall expedite review of a court’s finding under this section.”). We
therefore conclude that we have jurisdiction to review Lugrand Dawkins’s challenge
to the propriety of the trial court’s ruling under Texas Government Code section
51.903.
B. Texas Government Code Chapter 51
We next address Lugrand Dawkins’s contention that the trial court erred in
finding that its affidavit did not create a valid statutory lien. Whether an affidavit
purporting to create a lien is fraudulent, as defined by statute, is a question of law
that we review de novo. David Powers Homes v. M.L. Rendleman Co., 355 S.W.3d
327, 335 (Tex. App.—Houston [1st Dist.] 2011, no pet.).
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Opinion issued February 6, 2020
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-18-00909-CV ——————————— C. LUGRAND DAWKINS ENTERPRISES, LLC, Appellant V. WANDERSTAY HOTEL, LLC D/B/A WANDERLUST HOUSTON, Appellee
On Appeal from the 189th District Court Harris County, Texas Trial Court Case No. 2018-39075
MEMORANDUM OPINION
In this interlocutory appeal,1 appellant, C. Lugrand Dawkins Enterprises, LLC
(“Lugrand Dawkins”), challenges the trial court’s order, titled “Judicial Finding of
Fact and Conclusion of Law Regarding a Documentation or Instrument Purporting
1 See TEX. GOV’T CODE ANN. § 51.903(c). to Create a Lien or Claim,” declaring that there was no valid lien or claim created by
Lugrand Dawkins’s affidavit claiming a mechanic’s lien against appellee,
Wanderstay Hotel, LLC, doing business as Wanderlust Houston (“Wanderlust”). In
five issues, Lugrand Dawkins contends that the trial court erred in granting
Wanderlust’s “1st Amended Motion for Judicial Review of Lien.”2
We reverse and remand.
Background
In its second amended petition, Wanderlust, a hotel, alleged that it executed
an agreement with Lugrand Dawkins, a general contractor, to provide general
contractor services related to the renovation of Wanderlust’s hotel property.
Throughout the renovation process Lugrand Dawkins failed to make progress
according to the parties’ agreed-upon schedule, although Wanderlust “faithfully
made payments” to Lugrand Dawkins. Eventually, the parties reached an impasse,
and Wanderlust “had to hire the services of an additional contractor to correct the
work already done and [to] finish the work that ha[d] not been completed.” And
although Lugrand Dawkins failed to complete its work, it “expect[ed] additional
payments” from Wanderlust.
2 See id.
2 Wanderlust asserted claims against Lugrand Dawkins for breach of contract,
negligence, violations of the Texas Deceptive Trade Practices Act, 3 and fraudulent
lien.4 Related to its fraudulent lien claim, Wanderlust challenged the validity of
Lugrand Dawkins’s “Affidavit Claiming a Statutory and Constitutional Lien,” which
it had filed with the Harris County Clerk’s Office. Wanderlust attached to its second
amended petition, among other things, the “Affidavit Claiming a Statutory and
Constitutional Lien.”
Lugrand Dawkins answered, generally denying Wanderlust’s allegations and
asserting certain defenses and counterclaims.
Wanderlust then filed its “1st Amended Motion for Judicial Review of Lien.”5
In its motion, Wanderlust asserted that on June 15, 2018, Lugrand Dawkins filed its
“Affidavit Claiming a Statutory and Constitutional Lien” with the Harris County
Clerk’s Office; the representations made in the “Affidavit Claiming a Statutory and
Constitutional Lien” were false; Wanderlust had paid Lugrand Dawkins $82,000
under the parties’ agreement; Lugrand Dawkins only completed around $30,000
worth of work under the parties’ agreement; Wanderlust did not owe Lugrand
Dawkins any money; and Lugrand Dawkins “clearly knew or should have known
3 See TEX. BUS. & COM. CODE ANN. § 17.46. 4 See TEX, CIV. PRAC. & REM. CODE ANN. § 12.002. 5 See TEX. GOV’T CODE ANN. § 51.903.
3 [that] the document [it] recorded was fraudulent and not based upon any facts.” Thus,
Wanderlust sought, among other things, judicial review of Lugrand Dawkins’s
purported lien, under section 51.903 of the Texas Government Code.6 Wanderlust
attached to its motion Lugard Dawkins’s “Affidavit Claiming a Statutory and
In its response to Wanderlust’s motion, Lugrand Dawkins asserted that its lien
was not fraudulent because it was filed in the form of a mechanic’s lien as authorized
by Texas law and that the question of the lien’s validity was improper, as it exceeded
the scope of Texas Government Code Chapter 51.
After a hearing on Wanderlust’s motion, the trial court entered an order, titled
“Judicial Finding of Fact and Conclusion of Law Regarding a Documentation or
Instrument Purporting to Create a Lien or Claim,” declaring that there was no valid
lien or claim created by Lugrand Dawkins’s “Affidavit Claiming a Statutory and
Constitutional Lien.” The trial court’s findings of fact and conclusions of law
invoked its authority under Texas Government Code Chapter 51 and declare that
Lugrand Dawkins’s “Affidavit Claiming a Statutory and Constitutional Lien”
(1) [WAS] NOT provided for by specific state or federal statutes or constitutional provisions; (2) [WAS] NOT created by implied or express consent or agreement of the obligor, debtor, or the owner of the real or personal property or an interest in the real or personal property, if required under the law
6 See id. 4 of this state or by implied or express consent or agreement of an agent, fiduciary, or other representative of that person; (3) [WAS] NOT an equitable, constructive, or other lien imposed by a court of competent jurisdiction created by or established under the constitution or laws of this state or the United States; or (4) [WAS] NOT asserted against real or personal property or an interest in real or personal property. There [was] no valid lien or claim created by this documentation or instrument.
Lien
In its first and second issues, Lugrand Dawkins argues that the trial court erred
in granting Wanderlust’s “1st Amended Motion for Judicial Review of Lien”
because Lugrand Dawkins’s lien was “a Texas Property Code Chapter 53
Mechanic’s Lien and Texas Constitutional Lien” and Wanderlust “sought . . . relief
beyond the permissible scope of Texas Government Code [sections] 51.901
and . . . 51.903.”
A. Jurisdiction
Initially, we consider whether we have jurisdiction to review Lugrand
Dawkins’s challenge to the trial court’s interlocutory order, declaring that there was
no valid lien or claim created by Lugrand Dawkins’s “Affidavit Claiming a Statutory
and Constitutional Lien.” Texas Government Code section 51.903 confers appellate
jurisdiction to review a trial court’s finding about whether a document purporting to
create the lien is presumed to be fraudulent. Cardenas v. Wilson, 428 S.W.3d 130,
132 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (holding “we have appellate
5 jurisdiction to review a trial court’s interlocutory orders under section 51.903 of the
Texas Government Code”); see also TEX. GOV’T CODE ANN. § 51.903(c) (“An
appellate court shall expedite review of a court’s finding under this section.”). We
therefore conclude that we have jurisdiction to review Lugrand Dawkins’s challenge
to the propriety of the trial court’s ruling under Texas Government Code section
51.903.
B. Texas Government Code Chapter 51
We next address Lugrand Dawkins’s contention that the trial court erred in
finding that its affidavit did not create a valid statutory lien. Whether an affidavit
purporting to create a lien is fraudulent, as defined by statute, is a question of law
that we review de novo. David Powers Homes v. M.L. Rendleman Co., 355 S.W.3d
327, 335 (Tex. App.—Houston [1st Dist.] 2011, no pet.).
A document is “presumed” to be fraudulent if: the document or instrument purports to create a lien or assert a claim against real or personal property or an interest in real or personal property and: (A) is not a document or instrument provided for by the constitution or law of this state or of the United States; (B) is not created by implied or express consent or agreement of the obligor, debtor, or the owner of the real or personal property or an interest in the real or personal property, if required under the laws of this state, or by implied or express consent or agreement of an agent, fiduciary, or other representative of that person; or (C) is not an equitable, constructive, or other lien imposed by a court with jurisdiction created or established under the constitution or laws of this state or of the United States.
6 TEX. GOV’T CODE ANN. § 51.901(c)(2). To find that a document purporting to create
a lien is presumed fraudulent, the court must determine that it is not one of the above
three types of legitimate liens or claims. See id. § 51.903(a); see also Cardenas, 428
S.W.3d at 132.
Lugrand Dawkins argues that the trial court erred in granting Wanderlust’s
“1st Amended Motion for Judicial Review of Lien” because Lugrand Dawkins’s lien
was “a Texas Property Code Chapter 53 Mechanic’s Lien and Texas Constitutional
Lien” and Wanderlust “sought . . . relief beyond the permissible scope of Texas
Government Code [sections] 51.901 and . . . 51.903.” Lugrand Dawkins correctly
observes that both the Texas Constitution and the Property Code provide a basis for
a mechanic’s lien. See TEX. CONST. art. XVI, § 37; TEX. PROP. CODE ANN. Ch. 53;
Cardenas, 428 S.W.3d at 132–33. Because the laws of Texas authorize a document
filed in the form of a mechanic’s lien, it cannot be presumed to be fraudulent under
51.901(c)(2)(A) of the Texas Government Code. See TEX. GOV’T CODE ANN.
§ 51.903(a); Cardenas, 428 S.W.3d at 132–33. Wanderlust, in its “1st Amended
Motion for Judicial Review of Lien,” asserted that the representations Lugrand
Dawkins made in its “Affidavit Claiming a Statutory and Constitutional Lien” were
false; Wanderlust paid Lugrand Dawkins $82,000 under the parties’ agreement;
Lugrand Dawkins only completed around $30,000 worth of work under the parties’
agreement; Wanderlust did not owe Lugrand Dawkins any money; and Lugrand
7 Dawkins “clearly knew or should have known [that] the document [it] recorded was
fraudulent and not based upon any facts.” Wanderlust’s assertions, and its
corresponding evidence, relate to whether Lugrand Dawkins received payment
related to its work performed under the parties’ agreement. This goes not to the legal
authorization for the mechanic’s lien, but to whether it is valid, a question that was
not before the trial court in determining Wanderlust’s “1st Amended Motion for
Judicial Review of Lien” under Texas Government Code section 51.093. See
Cardenas, 428 S.W.3d at 133 (“Under the fraudulent lien statute, the trial court does
not rule on the validity of the underlying claim creating the lien or rule on any
substantive evidentiary claim.”). Accordingly, we hold that the trial court erred in
granting Wanderlust’s “1st Amended Motion for Judicial Review of Lien” and
declaring that there was no valid lien or claim created by Lugrand Dawkins’s
“Affidavit Claiming a Statutory and Constitutional Lien.”
We sustain Lugrand Dawkins’s first and second issues. 7
Conclusion
We reverse the trial court’s order, entitled “Judicial Finding of Fact and
Conclusion of Law Regarding a Documentation or Instrument Purporting to Create
7 Our disposition of Lugrand Dawkins’s first and second issues makes it unnecessary to address his third, fourth, and fifth issues. See TEX. R. APP. P. 47.1.
8 a Lien or Claim,” and remand the case for further proceedings consistent with this
opinion. We dismiss all pending motions as moot.
Julie Countiss Justice
Panel consists of Justices Kelly, Hightower, and Countiss.