Elizabeth Sifuentes v. Enrique C. Arriola and Sara Arriola

• Court: Court of Appeals of Texas
• Decided: April 22, 2009
• Docket: 03-05-00414-CV
• Status: Published

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-05-00414-CV

Elizabeth Sifuentes, Appellant

v.

Enrique C. Arriola and Sara Arriola, Appellees

FROM THE COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY NO. 270633, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING

MEMORANDUM OPINION

Appellant Elizabeth Sifuentes appeals a trial court order denying her summary

judgment motions and granting the summary judgment motion of appellees, Enrique and Sara

Arriola. Sifuentes argues that she should have prevailed on summary judgment and that, in the

alternative, fact questions precluded the trial court from granting the Arriolas’ summary judgment

motion. We will affirm the trial court’s judgment.

FACTUAL AND PROCEDURAL BACKGROUND

On November 14, 1997, Sifuentes obtained a judgment against Raul Chagoya for

$15,000 plus interest. In March 1998, Sifuentes recorded an abstract of the judgment in Travis

County, thereby establishing a lien against any non-exempt real property that Chagoya owned in the

county. Chagoya did in fact own a piece of real property in the county: roughly one-fifth of an acre

with a four-plex on it (“the Property”), which Chagoya had purchased in September 1995. From the time he purchased the Property until August 2002, Chagoya lived in one unit of the four-plex and

rented out the other three units. On August 9, 2002, Chagoya sold the Property to the Arriolas. The

Arriolas immediately took up residence in the unit that Chagoya had occupied, and they continued

to rent out the other three units.

In May 2003, Sifuentes sued Chagoya and the Arriolas. She sought to force a sale

of the Property and to obtain the proceeds in satisfaction of her judgment against Chagoya. Chagoya

never filed an answer to Sifuentes’s petition, and for reasons not reflected in the record, Sifuentes

subsequently nonsuited him. See Tex. R. Civ. P. 162. The Arriolas, on the other hand, did file an

answer to Sifuentes’s petition, and in an amended answer they asserted as an affirmative defense that

the Property was their homestead and therefore exempt from judgment liens. See Tex. Const.

art. XVI, §§ 50, 51; Tex. Prop. Code Ann. §§ 41.001, .002 (West 2000 & Supp. 2008).

On July 23, 2004, Sifuentes and the Arriolas filed an Agreed Stipulation of

Undisputed Facts that established the following:

• The four-plex was a single two-story structure divided into four separate residences.

• Besides the four-plex, the Property featured the following improvements: a parking area shared by all residents; sidewalks going to the front door of each unit; privacy fences dividing the lot into four yards; and concrete patios in each unit’s yard.

• No unit of the four-plex had internal access to any other unit.

• Each unit shared common interior walls with adjoining units, and all units shared a single roof.

• Each unit had its own air conditioning and heating system.

• During the time that he owned the Property, Chagoya occupied only one unit of the four-plex and rented the other three units to unrelated third-party tenants.

2 • In June of 1997, Chagoya applied for a residential homestead tax exemption for the Property.

• The Travis Central Appraisal District granted Chagoya an ad valorem tax exemption on twenty-five percent of the Property.

• Chagoya never protested or appealed the twenty-five-percent ad valorem tax exemption determination.

• Chagoya’s individual unit was his homestead at the time that he sold the Property to the Arriolas.

The Arriolas filed a motion for summary judgment. Tex. R. Civ. P. 166a(c).

Sifuentes filed her own “traditional” motion for summary judgment as well as a “no-evidence”

motion for summary judgment. Tex. R. Civ. P. 166a(c), (i). Chagoya filed an affidavit in support

of the Arriolas’ motion. In it, he claimed that despite his acceptance of the twenty-five-percent ad

valorem tax exemption, he had always considered the entire Property to be his homestead. The

trial court denied Sifuentes’s motion for summary judgment and granted that of the Arriolas.

Sifuentes appeals.

STANDARD OF REVIEW

A “traditional” motion for summary judgment is properly granted only when the

movant establishes that there are no genuine issues of material fact and that she is entitled to

judgment as a matter of law. Tex. R. Civ. P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470,

471 (Tex. 1991); Holmstrom v. Lee, 26 S.W.3d 526, 530 (Tex. App.—Austin 2000, no pet.). A

defendant seeking summary judgment must negate as a matter of law at least one element of each

of the plaintiff’s theories of recovery or prove as a matter of law each element of an affirmative

defense. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).

3 A party seeking a “no-evidence” summary judgment, on the other hand, does not bear

the burden of establishing her right to judgment by proving a defense or claim, but instead asserts

that there is no evidence of one or more essential elements of a claim on which the opposing party

will have the burden of proof at trial. Tex. R. Civ. P. 166a(i); Holmstrom, 26 S.W.3d at 530. If the

nonmovant fails to produce more than a scintilla of probative evidence raising a genuine issue of

material fact as to each challenged element on which he has the burden of proof, summary judgment

is proper. Id.

In reviewing a grant of summary judgment, we take as true evidence favorable to the

nonmovant, making every reasonable inference and resolving all doubts in the nonmovant’s favor.

Centeq Realty, 899 S.W.2d at 197. If both parties move for summary judgment, we determine all

questions presented and render the judgment the trial court should have rendered. Commissioners

Court v. Agan, 940 S.W.2d 77, 81 (Tex. 1997).

DISCUSSION

The constitutionally created homestead interest protects property from most types

of liens, including judgment liens. Florey v. Estate of McConnell, 212 S.W.3d 439, 443

(Tex. App.—Austin 2006, pet. denied). Homestead rights enjoy robust protection under Texas law.

See Kendall Builders, Inc. v. Chesson, 149 S.W.3d 796, 807 (Tex. App.—Austin 2004, pet. denied).

To establish that a piece of property is a homestead exempt from judgment liens, “the claimant must

show a combination of both overt acts of homestead usage and the intention on the part of the

owner to claim the land as a homestead.” Dominguez v. Castaneda, 163 S.W.3d 318, 330

(Tex. App.—El Paso 2005, pet. denied). While merely owning or occupying a piece of property

4 does not automatically make it a homestead, “[p]ossession and use of land by one who owns it and

who resides upon it makes it the homestead in law and in fact.” Id. at 331.

Sifuentes admits that the unit Chagoya lived in while he owned the Property was

Chagoya’s homestead.1 Sifuentes also acknowledges that homesteads are exempt from judgment

liens. She argues, however, that Chagoya’s intent and usage of the Property show that only twenty-

five percent of the Property—the portion that Chagoya and the Arriolas have occupied—has ever

qualified as a homestead, rendering the remaining seventy-five percent subject to her judgment lien.

We disagree. As a starting point, we presume that one who owns and resides on a

lot makes the whole lot his homestead. See Scottish Am. Mortgage Co. v. Milner, 30 S.W.2d 582,

584 (Tex. Civ. App.—Texarkana 1930, writ ref’d). Furthermore, Texas law is long settled that one

who owns and resides in a building may claim the entire building as homestead even if he rents out

parts of it. The seminal case is Ford v. Forsgard, 27 S.W. 57 (Tex. 1894), in which the supreme

court held that a court cannot order the sale of part of a building if the rest of the building qualifies

as homestead. Id. at 58. For reasons unstated, the Ford court assumed that the entire lot under the

building at issue was homestead. See id. That assumption drove the result because, as the court

recognized, homestead rights attach primarily to land and incidentally to buildings thereon. Id.

Thus, Ford is not directly on point here; we cannot assume that the land under the four-plex was

homestead, as the character of the land is one of the things we are asked to decide.

1 It is less clear whether Sifuentes admits that the unit became the Arriolas’ homestead when they purchased the Property and moved into it, but in any event the law entails that conclusion. See Cadle Co. v. Harvey, 46 S.W.3d 282, 285 (Tex. App.—Fort Worth 2001, pet. denied) (“A judgment debtor may sell [the homestead] and pass title free of any judgment lien, and the purchaser may assert that title against the judgment creditor.”).

5 The cases following Ford have not all expressly shared its underlying assumption,

but they have all shared its conclusion. See Folse v. Monroe, 190 S.W.2d 604, 610 (Tex. Civ.

App.—Beaumont 1945, writ ref’d w.o.m.) (entire building qualified as homestead even

though owners rented out kitchen, dining room, and three-room apartment); Person v. Levenson,

143 S.W.2d 419, 421 (Tex. Civ. App.—El Paso 1940, no writ) (entire building divided into

thirty-six apartments qualified as homestead even though owner occupied only one apartment);

Postal Sav. & Loan Ass’n v. Powell, 47 S.W.2d 343, 351-52 (Tex. Civ. App.—El Paso 1931, writ

ref’d) (entire building qualified as homestead even though owner rented out upstairs as rooming

house); Tyler v. Thomas, 297 S.W. 609, 610 (Tex. Civ. App.—Galveston 1927) (entire building

divided into four apartments qualified as homestead even though owner only occupied one

apartment), rev’d on other grounds, 6 S.W.2d 350 (Tex. Comm’n App. 1928); Kelly v. Nowlin,

227 S.W. 373, 375 (Tex. Civ. App.—Texarkana 1921, no writ) (entire building qualified as

homestead even though owner rented out first floor); Bente v. Sullivan, 115 S.W. 350, 353-54

(Tex. Civ. App.—Austin 1908, writ denied) (entire building containing residence, hotel, and other

unspecified space qualified as homestead). We have found no case, and Sifuentes cites none, where

a court held that some part of an owner-occupied building did not qualify as the owner’s

residential homestead.

Sifuentes nevertheless argues that this case is unique because Chagoya intended only

a portion of the Property to be his homestead. While homestead claimants normally do have to

demonstrate intent, property owners who reside on and use their property do not. See Braden Steel

Corp. v. McClure, 603 S.W.2d 288, 293 (Tex. Civ. App.—Amarillo 1980, no writ); see also

6 Dominguez, 163 S.W.3d at 331. Chagoya resided on the Property and used it analogously to the

owners in the cases cited above—especially Person, Tyler, and Bente, where the owners occupied

only portions of their properties from the outset.2 Accordingly, we conclude that his residence and

usage were sufficient to obviate the issue of intent and render the entire Property his homestead.

Sifuentes also argues that the layout of the Property—“separate units and severed

yards”—must have limited Chagoya’s usage. We disagree. First, nothing indicates that the

four-plex units were materially more separate than the units in the cases cited above. Second, we

would not characterize the Property as having “severed” yards; the record indicates that the “privacy

fences” on the Property, which were only a few feet in length, did not impede free passage from any

part of the lot to any other. This arrangement does not dictate that Chagoya possessed and used only

one-fourth of the property for homestead purposes. Cf. Scottish Am. Mortgage Co., 30 S.W.2d at

584 (complete severance of homestead property by fence may indicate abandonment of

fenced-off portion).

Finally, Sifuentes argues that all of the above considerations must yield to one key

fact: Chagoya specifically declared that only twenty-five percent of the Property was his

homestead. We disagree. Occupancy determines homestead scope; declarations do not. Schulz

v. L. E. Whitham & Co., 27 S.W.2d 1093, 1095 (Tex. 1930). Moreover, Chagoya did not “declare”

2 See Person v. Levenson, 143 S.W.2d 419, 420 (Tex. Civ. App.—El Paso 1940, no writ); Tyler v. Thomas, 297 S.W. 609, 610 (Tex. Civ. App.—Galveston 1927), rev’d on other grounds, 6 S.W.2d 350 (Tex. Comm’n App. 1928, judgm’t adopted); Bente v. Sullivan, 115 S.W. 350, 352 (Tex. Civ. App.—Austin 1908, writ denied). The owner in Powell may also have occupied only a portion of his property from the outset, but the opinion is unclear. See Postal Sav. & Loan Ass’n v. Powell, 47 S.W.2d 343, 352 (Tex. Civ. App.—El Paso 1931, writ ref’d).

7 twenty-five percent of the Property to be his homestead; rather, he merely accepted, without protest,

a twenty-five-percent homestead tax exemption on the Property.

A proportional homestead tax exemption has no impact on a property’s homestead

status. Section 11.13(k) of the Texas Tax Code states:

A qualified residential structure does not lose its character as a residence homestead if a portion of the structure is rented to another or is used primarily for other purposes that are incompatible with the owner’s residential use of the structure. However, the amount of any residence homestead exemption does not apply to the value of that portion of the structure that is used primarily for purposes that are incompatible with the owner’s residential use.

Tex. Tax Code Ann. § 11.13(k) (West 2008) (emphasis added). In other words, the Travis Central

Appraisal District was statutorily required to limit Chagoya’s homestead tax exemption to the

portion of the Property in which Chagoya resided (twenty-five percent). As the statute makes clear,

however, that limitation did not affect the Property’s homestead status. A fortiori, Chagoya’s

acceptance of a twenty-five-percent tax exemption—the maximum that the law allowed him—does

not indicate that Chagoya “declared” only twenty-five percent of the Property to be his

constitutional homestead.

For the reasons detailed above, we hold that this case falls under the rule that an entire

building counts as homestead when the owner resides in part of the building and rents out the rest.

The remainder of the Property, namely the land under the four-plex, follows suit. See Tex. Const.

art. XVI, § 51 (homestead attaches to land and improvements on it).

8 CONCLUSION

The Property in dispute is exempt from judgment liens because it has been a

homestead at all relevant times. We therefore affirm the trial court’s summary judgment.

__________________________________________

J. Woodfin Jones, Chief Justice

Before Chief Justice Jones, Justices Pemberton and Waldrop

Affirmed

Filed: April 22, 2009