ACCEPTED
03-14-00183-CV
7855612
THIRD COURT OF APPEALS
AUSTIN, TEXAS
11/17/2015 8:50:17 AM
JEFFREY D. KYLE
CLERK
NO. 03-14-00183-CV
__________________________________________________________________
FILED IN
3rd COURT OF APPEALS
IN THE COURT OF APPEALS AUSTIN, TEXAS FOR THE THIRD DISTRICT OF TEXAS11/17/2015 8:50:17 AM AT AUSTIN JEFFREY D. KYLE Clerk
__________________________________________________________________
CAROL KORMANIK,
Appellant
vs.
VICTOR SEGHERS,
Appellee
On Appeal From the 155th Judicial District Court of Fayette County, Texas
Trial Court Cause No. 2013v-016
APPELLANT’S MOTION FOR REHEARING
__________________________________________________________________
Michael D. Sydow
State Bar No. 19592000
5020 Montrose Boulevard
Suite 450
Houston, Texas 77006
(713) 622-9700 [Telephone]
(713) 522-1949 [Telecopier]
michael.sydow@thesydowfirm.com
Attorney for Appellant,
Carol Kormanik
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NO. 03-14-00183-CV
IN THE COURT OF APPEALS
FOR THE THIRD DISTRICT OF TEXAS AT AUSTIN
_________________________________
CAROL KORMANIK,
Appellants,
vs.
VICTOR SEGHERS,
Appellee.
Appealed from the 155th Judicial District Court of Fayette County, Texas Trial Court Cause No. 2013v-016
APPELLANT’S MOTION FOR REHEARING
TO THE HONORABLE COURT OF APPEALS:
COMES NOW, Appellant Carol Kormanik and submits this Motion for Rehearing in response to the opinion issued by the Court on October 1, 2015, and requests that the Court consider the following issues:
1. Whether the Court should dismiss this appeal as moot because, during the pendency of the appeal, the Land was sold in an unrelated foreclosure sale.
2. Alternatively, if the Court decides that the appeal is not moot, whether the Court erred in determining that the sheriff’s sale could proceed when it is undisputed that the Land was Carol’s separate property and not subject to the liabilities of her husband, Ronald Kormanik.
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1. This case is moot because the Land was sold in an unrelated foreclosure sale during the pendency of the appeal.
This case is moot. Under the constitution, courts have no jurisdiction to render advisory opinions. Coburn v. Moreland, 433 S.W.3d 809, 825 (Tex. App.— Austin 2014, no pet.). A court cannot decide a case that has become moot during the pendency of an appeal. Id. “A case [on appeal] becomes moot if, since the time of filing, there has ceased to exist a justiciable controversy between the parties— that is, if the issues presented are no longer ‘live,’ or if the parties lack a legally cognizable interest in the outcome.” Id. (quoting Heckman v. Williamson Cnty., 369 S.W.3d 137, 162 (Tex. 2012)). In other words, a case is moot when the court’s action on the merits cannot affect the parties’ rights or interests. Id.
The Supreme Court has recognized two exceptions to the mootness doctrine:
(1) the capability of repetition yet evading review exception; and (2) the collateral consequences exception. Gen. Land Office v. OXY U.S.A., Inc., 789 S.W.2d 569, 571 (Tex. 1990). Neither exception applies in this case.
Here, on January 30, 2013, Carol filed a suit seeking a permanent injunction to prevent the Fayette County sheriff from selling the Land. The trial court denied the permanent injunction on February 13, 2014, which would have allowed the sheriff to sell the Land. Carol then appealed the trial court’s judgment, delaying the sale. Carol filed her notice of appeal on April 7, 2014. During the pendency of this appeal, on April 7, 2015, the Land was sold in an unrelated transaction by Michael
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G. Tapp, substitute trustee, pursuant to a note and deed of trust entered into by Carol and Ronald Kormanik. A copy of the recorded Substitute Trustee’s Deed and Bill of Sale showing the date of sale is attached as Exhibit “A”.1 This appeal was submitted on the briefs on July 29, 2015, and this Court issued its opinion and judgment on October 1, 2015.
Since the time this appeal was filed, April 7, 2014, and because of the foreclosure sale, there has ceased to exist a justiciable controversy between the parties. A judgment from this Court permitting or prohibiting the sheriff’s sale of the Land would be meaningless at this point because there is nothing on which the judgment could operate; that is, the Court’s judgment would be wholly ineffectual because it lacks a subject matter—the Land—on which it could operate. See S. Padre Dev. Co. v. Tex. Commerce Bank N.A., 538 S.W.2d 475, 478–79 (Tex. Civ. App.—Corpus Christi 1976, no writ); see also O’Brian v. First State Bank, No. 03- 95-00644-CV, 1996 Tex. App. LEXIS 4099, at *6–7 (Tex. App.—Austin Sep. 11,
1 Although Exhibit “A” was not part of the appellate record in this case, Carol asks the Court to take judicial notice of Exhibit “A” and the date of the substitute trustee’s sale. A court can take judicial notice at any stage of the proceeding, including on appeal. Tex. R. Evid. 201(d); Office of Pub. Util. Counsel v. Pub. Util. Comm’n, 878 S.W.2d 598, 600 (Tex. 1994). A court can judicially notice a fact that is not subject to reasonable dispute because the fact is either generally known or can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned. Tex. R. Evid. 201(b). A court can take judicial notice of a recorded deed reflecting on its face that it is a certified document that was recorded with the county clerk. Johnson v. Johnson, No. 03-02-00427-CV, 2005 Tex. App. LEXIS 10458, at *18 (Tex. App.— Austin Dec. 16, 2005, no pet.) (mem. op.). Exhibit A is an accurate copy of a recorded deed that reflects on its face that it is a certified document that was recorded with the Fayette County clerk on April 13, 2015. Additionally, Carol does not anticipate that Seghers will dispute the accuracy or authenticity of Exhibit “A”.
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1996, writ denied) (not designated for publication) (discussing a prior decision in related case involving a foreclosure sale that had already been completed). Therefore, this appeal is moot.
Accordingly, the Court should grant this Motion for Rehearing, withdraw its opinion dated October 1, 2015, and issue a new opinion dismissing the appeal for want of jurisdiction. Heckman, 399 S.W.3d at 162 (“If a case is or becomes moot, the court must vacate any order or judgment previously issued and dismiss the case for want of jurisdiction.”).
2. Alternatively, the Court erred when it concluded that the partition agreement was not effective as to Seghers.
If the Court decides that the appeal is not moot, then the Court erred when it concluded that the Partition Agreement was not effective as to Seghers because, under the constitution, the character of partitioned property changes immediately upon execution of the written instrument, and a spouse’s separate property is not subject to the liabilities of the other spouse.
Article XVI, section 15 of the Texas Constitution provides: “[S]pouses, without the intention to defraud pre-existing creditors, may by written instrument . . . partition between themselves all or part of their property, then existing or to be acquired, . . . whereupon the portion or interest set aside shall be and constitute a part of the separate property and estate of such spouse[.]” Tex Const. art. XVI, § 16 (emphasis added). The term “whereupon” means “as a consequence of which”
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or “immediately after which.” See Webster’s New Twentieth Century Dictionary 2083 (2d ed. 1983); Oxford Dictionaries Online (Nov. 6, 2015, 2:40 PM), http://www.oxforddictionaries.com/us/definition/american_english/whereupon. The constitution contains no provision for notifying future creditors and does not mandate recordation in order to give a partition agreement its intended effect. Therefore, in this case, the Land immediately became Carol’s separate property in 2007 when she executed the Partition Agreement.
Under Family Code section 3.202, “[a] spouse’s separate property is not subject to liabilities of the other spouse unless both spouses are liable by other rules of law.” Tex. Fam. Code § 3.202 (LEXIS current through 2015 R. Sess.). Here, the Land is Carol’s separate property. The $130,000 judgment is against Ronald, not Carol. There are no rules of law that make both Ronald and Carol liable here. Therefore, the Land is not subject to Ronald’s liabilities.
The question remains: How does Family Code section 4.106 fit into this scheme? Based on the rule that courts should not adopt a construction that would render a law absurd or meaningless, Reliant Energy, Inc. v. Gonzalez, 102 S.W.3d 868, 875 (Tex. App.—Houston [1st Dist.] 2003), aff’d, 159 S.W.3d 615 (Tex. 2005), Carol submits that section 4.106 is designed to protect bona fide purchasers and those creditors who successfully foreclose on and sell or convey the subject property to satisfy a debt. In this regard, by preventing a spouse from invoking a
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partition agreement to challenge a legitimate sale after the sale is complete, section 4.106(b) protects both (1) bona fide purchasers without notice and (2) those creditors without notice who successfully convey the property and collect on a debt.
For instance, if (1) Carol had never intervened, (2) Sheriff Korenek had successfully sold the Land, and (3) Seghers had collected a portion of the sale price to satisfy the judgment debt, then Carol would have no recourse because the buyer purchased and Seghers collected without actual or constructive notice of the Partition Agreement. However, Carol did in fact prevent the sale when she intervened and asserted her constitutionally-protected separate-property rights in the Land. Therefore, because it is undisputed that the Land is Carol’s separate property, section 4.106(b) is inapplicable.
The Court cited Pratt v. Amrex, Inc., 354 S.W.3d 502 (Tex. App.—San Antonio 2011, pet. denied), in support of its ultimate conclusion that the partition agreement was not effective as to Seghers. However, that case is distinguishable from this one. In Pratt, a husband and wife executed a partition agreement but recorded it in the county of their residence rather than the county where the property was located. The husband died. A Harris County court appointed a receiver for the husband’s estate. The receiver executed and recorded a special warranty deed conveying the subject property from the husband to the receivership
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estate. Without the receiver’s knowledge, a lender foreclosed its deed of trust against the subject property and issued a substitute trustee’s deed to the buyer at the foreclosure sale. The receiver sued the buyer, seeking a declaratory judgment. The trial court granted the buyer’s motion for summary judgment declaring the receiver’s deed void as a matter law and the buyer’s deed valid as a matter of law. Id. at 503–04. The court of appeals first considered whether the partition agreement was effective as to the receiver. In reversing the trial court, the court of appeals held that the completed conveyance to the receiver was valid because he did not have notice of the couple’s partition agreement. Id. at 505–06.
Unlike this case, Pratt did not involve a judgment creditor or a spouse invoking her separate-property rights against a judgment creditor. Additionally, unlike this case, the Pratt court was considering transactions that had been consummated; the Pratt court did not have to consider how section 4.106(b) applied to a potential transaction that was interrupted by a petition for injunctive relief. Consequently, the conclusion reached in Pratt is inapplicable to this case.
Finally, family-law cases recognize that divesting a spouse of her separate property is reversible error. Rivera v. Hernandez, 441 S.W.3d 413, 425–26 (Tex. App.—El Paso 2014, pet. denied); see also Tex. Const. art. I, § 19. This is because “[t]he protection of one’s right to own property is said to be one of the most important purposes of government. Th[e] right [to own property] has been
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described as fundamental, natural, inherent, inalienable, not derived from the legislature and as preexisting even constitutions.” Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 140 (Tex. 1977). Therefore, any order or judgment permitting the sheriff to divest Carol of her separate property in order to satisfy a judgment against Ronald would violate Carol’s fundamental property rights.
In sum, because the Land was Carol’s separate property and not subject to Ronald’s liabilities and because Carol timely intervened to stop the sheriff’s sale, the Court of Appeals erred when it concluded that the Partition Agreement was ineffective as to Seghers and affirmed the judgment of the trial court. 3. Conclusion & Prayer For these reasons, the Court should grant this Motion for Rehearing, withdraw its October 1, 2015 opinion, and issue a substitute opinion dismissing the appeal as moot or, alternatively, reversing the trial court’s judgment and rendering judgment in favor of Carol Kormanik.
Respectfully submitted,
THE SYDOW FIRM
/s/ Michael D. Sydow
Michael D. Sydow
michael.sydow@thesydowfirm.com Texas Bar No. 19592000
5020 Montrose Boulevard, Suite 450 Houston, Texas 77006
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(713) 622-9700 [Telephone]
(713) 552-1949 [Telecopier]
ATTORNEYS FOR APPELLANT.
CERTIFICATE OF COMPLIANCE
Pursuant to Tex.R. App. Pro. 9.4(i)(3), the undersigns hereby certifies that according to the word count function of the computer program used to generate that document, the portions of the Motion for Rehearing subject to the rule contain 1,891 words total and that the text thereof is in 14 point Times New Roman font.
/s/ Michael D. Sydow
Michael D. Sydow
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing Appellant’s Motion for Rehearing was served by electronic service upon all parties of record or their counsel, as indicated on the attached service list, on this 16th day of November, 2015.
/s/ Michael D. Sydow
Michael D. Sydow
SERVICE LIST:
Mr. Carl A. Generes 4358 Shady Bend Drive Dallas, Texas 75244
ATTORNEY FOR APPELLEE.
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NO. 03-14-00183-CV
IN THE COURT OF APPEALS
FOR THE THIRD DISTRICT OF TEXAS AT AUSTIN
CAROL KORMANIK,
Appellant
vs.
VICTOR SEGHERS,
Appellee
APPELLANT’S APPENDIX
Substitute Trustee’s Deed and Bill of Sale...............................................Exhibit “A”
EXHIBIT “A”
INST. 11 15-02391 Vol : 1731 Pg 623
SUBSTITUTE TRUSTEE'S DEED and BILL OF SALE
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN TIIE PUBLIC RECORDS:YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER
THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF FAYETTE §
WHEREAS, on October 3, 2012, Ronald J. Kormanik and Carol A. Kormanik (hereinafter called "Mortgagor") executed and delivered a certain Deed of Trust conveying to Michael G. Tapp, Trustee, the hereinafter described real and personal property to secure the payment of a Promissory Note (hereinafter called "Note") in the original principal sum of $300,000.00, payable to the order of Contessa Capital, LLC, L. Tuffly Ellis Investments, LLC, and Diep Kim-Ngoc Nguyen, and executed by said Mortgagor on or about the same day as the Deed of Trust; said Deed of Trust being recorded in the Official Records of Fayette County, Texas, under Instrument No. 12-6069; Volume 1622, Page 226; and
WHEREAS, the Deed of Trust provides that if default is made in the payment of all or any part of the principal or interest of said Note as it becomes due and payable, then the holder of the Note may request the Trustee or Substitute Trustee to proceed to sell the property after giving and posting notice as provided in the Deed of Trust; and
WHEREAS, there has been a default in the payment of the note described in said Deed of Trust; and the beneficiary and owner and holder of the aforesaid note has appointed Michael G. Tapp as substitute trustee and requested him to enforce the sale provisions of the Deed of Trust;
WHEREAS, Michael G. Tapp, Substitute Trustee, gave or caused others to give notice of the time, place and the terms of the sale by posting notice for at least twenty-one (21) days preceding the date of the sale at the place designated for such postings at the County Courthouse of Fayette County, Texas, and by filing Notice of Sale in the Office of the County Clerk of Fayette County, Texas at least twenty-one (21) days preceding the date of sale, and by mailing written notice of the proposed sale to all obligors of said indebtedness at said obligors' last known mailing address as shown by the records of the holder of said debt, postage ·prepaid, certified mail, return receipt requested, at least twenty-one (21) days prior to the date of said sale; and
WHEREAS, Michael G. Tapp, Substitute Trustee, in accordance with the Deed of Trust and Substitute Trustee's Notice of Sale, did between the hours of 10:00 a.m. and 4:00 p.m. and . within three (3) h?urs from the earliest time of sale as designated in said Notice of Sale, in the
EXHIBIT
I \-\
TI1is document to which this cerlilica10 is affixed is a full, true and correcl copy of !he original on file and of record in my olfice.
EXHIBIT "A"
JUN 3 0 2015
Exhibit H - Page l of 5
Page 34 of 40