Farkas, Janos v. Fannie Mae Association

• Court: Court of Appeals of Texas
• Decided: October 31, 2012
• Docket: 05-11-01416-CV
• Status: Published

Opinion

AFFIRMED; Opinion Filed October 31, 2012.

In ‘[he Iniirt nf prah FiftIi 1iitrirt nf at Oa11a No. 05-11-01416-CV

JANOS FARKAS, Appellant

V.

FEDERAL NATIONAL MORTGAGE ASSOCIATION A/K/A FANNIE MAE, Appellee

On Appeal from the County Court at Law No. 2 Dallas County, Texas Trial Court Cause No. CC-11-06326-B

MEMORANDUM OPINION Before Justices O’Neill, FitzGerald, and Lang-Miers Opinion By Justice Lang-Miers

Janos Farkas’ appeals the county court at law’s judgment in favor of the Federal National

Mortgage Association, also known as Fannie Mae, in a forcible detainer proceeding. In two issues,

Farkas argues that Fannie Mae did not establish the required elements of’ forcible detainer and that

the trial court erred in denying his plea in abatement. Because all dispositive issues are settled in

law, we issue this memorandum opinion. TEX. R. APP. P. 47.2(a), 47.4. We affirm.

Mae sued Parkas and all occupants of the property. Both the justice court and county court at law rendered judgment against Parkas and all occupants. Parkas tried the case prose and only Parkas appealed the judgment of the county court at law to this Court. As a result, Parkas is the only appellant before the Court. BACKGROUND

On January 2, 2007, Farkas executed a promissory note secured by a (Iced of trust for

property located at 1122 Jackson Street. Number 60$, Dallas. Texas 75202. The deed identilied

WR Starkey Mortgage. L.L.P. as lender. In the event that Farkas defaulted on the note, section 22

ot the deed of trust provided the lender with remedies, including the power of sale by foreclosure.

Section 22 provided:

If the Property is sold pursuant to this Section 22, Borrower or any person holding possession of the Property through Borrower shall immediately surrender possession of the Property to the purchaser at that sale. If possession is not surrendered, Borrower or such person shall be a tenant at sufferance and may be removed by writ of possession or other court proceeding.

After Farkas defaulted on the note, Aurora Loan Services, LLC’ purchased the property at a

foreclosure sale, and then conveyed the property to Fannie Mae. Attorneys for Fannie Mae sent a

notice to vacate to Farkas by both certified mail and first—class mail demanding that Farkas vacate

the property within three days. Farkas did not vacate the property and Fannie Mae filed a forcible

detainer proceeding in the justice court against Farkas and all occupants of the property. The justice

court awarded possession of the property to Fannie Mae.

Farkas appealed to the county court at law and filed a plea in abatement in that case stating

that he had also filed a case in the district court “complaining of the wrongful actions of [Fannie

Mae] and others in the conduct of the foreclosure process.” He “ask[ed] the Court to abate these

proceedings until a determination of the issues of title to the property has been made” by the district

court. The county court at law denied the plea in abatement and conducted a de novo bench trial.

The court admitted the following as Fannie Mae’s exhibits without objection from Farkas: (1) a

certified copy of the deed of tnist signed by Farkas; (2) a certified copy of the substitute trustee’s

deed showing that Aurora was the purchaser of the property at the foreclosure sale; (3) a certified copy of the special warranty deed transferring ownership ofthe property from Aurora to Fannie Mae;

and (4) a copy of the notice to vacate sent by certified and first-class mail by Fannie Mae’s counsel

to Farkas and a printout from the United States Postal Service indicating that the copy sent by

certified mail was unclaimed and returned. Farkas testified that he still was in possession of the

property at the time of trial. The county court at law rendered judgment awarding possession of the

property to Fannie Mae. This appeal followed.

APPUcABLE LAW

In a forcible detainer proceeding, “the only issue shall be as to the right to actual possession;

and the merits of the title shall not be adjudicated.” TEx. R. Civ, P. 746; see Scott v. Hewitt, 90

S.W.2d 816, 818-19 (Tex. 1936); Montgomery v. Aurora Loan Servs., LLC, 375 S.W.3d 617, 621

(Tex. App .—DaIlas 2012, pet. filed). it is cumulative—not exclusive—ofother remedies that a party

may have in the courts of this state, Bruce v. Fed. iVat ‘1 Mortg. Ass ‘n, 352 S.W.3d 891, 893 (Tex.

App.—Dallas 2011, pet. denied). A party may bring a separate lawsuit in the district court to

determine a title dispute. Id. However, a title dispute does not deprive a justice court or county court

at law of jurisdiction unless determining who has the right to immediate possession necessarily

requires resolution of the title dispute. Id.

LANDLoRD-TENANT RELATIONSHIP AND NoTIcE

In his first issue, Farkas argues that Fannie Mae did not establish the elements of forcible

detainer. Specifically, Farkas contends that (1) Fannie Mae did not establish that it had a landlord-

tenant relationship with Farkas and (2) Fannie Mae did not prove proper delivery of a notice to

vacate. See TEx. PROP. CODE ANN. § 24.002 (West 2000), § 24.005(f)—(g) (West Supp. 2012). Fannie Mae argues that Farkas has not preserved these arguments because Farkas does not

identify where in the record Farkas presented these arguments to the trial court and the trial court

—3— ruled against hin on the arguments. But we construe his arguments to be a legal sufficiency

challenge and “[ijn a nonjury case, a complaint regarding the legal or factual insufficiency of the

evidence ... may be made for the first time on appeal in the complaining partys brief.” TEx. R.

Ai’i’. P. 33.1(d).

When a party challenges the legal sufficiency of the evidence, we consider the evidence in

the light most favorable to the finding, indulging every reasonable inference in support. See Cliv of

Keller u. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable

fact-finder could and disregard contrary evidence unless a reasonable fact-finder could not. See id.

at 827. If the evidence would permit reasonable and fair-minded people to reach the finding under

review, the legal sufficiency challenge fails. See id.

Landlord-Tenant Relationship

Farkas argues that Fannie Mae did not establish a landlord-tenant relationship between

Fannie Mae and Farkas. Without any explanation, he argues that “Fannie Mae did not provide

evidence that the tenant-landlord relationship is not subject to the restriction ... by the Special

Warranty [Deedi” that states “{t]his conveyance is made and accepted to subject to any and all

validly existing restrictions . . . and to any applicable zoning laws and building ordinances[.]” 2

Fannie Mae argues that the substitute trustee’s deed and special warranty deed establish that Fannie

Mae owned the property. Fannie Mae also contends that section 22 of the deed of trust created a

landlord-tenant at sufferance relationship between Aurora and Farkas at the time of the foreclosure

sale, and that the special warranty deed “extended the landlorditenant relationship to Fannie Mae[.]”

Viewing the evidence in the light most favorable to the judgment, we conclude that the

Farkas misquotes the special warranty deed, but this difference does not affect our analysis. The special warranty deed reads: “This conveyance is made and accepted subject to any and all validly existing restrictions ... and to any applicable zoning laws or ordinances and building use occupancy eode[.j”

-4- evidence was legally sufficient to establish a landlord-tenant relationship between Fannie Mae and

Farkas .See horns/u . Sec i of Veterans Af/,irs, No. 05—1 1-01 075-C V. 2012 WL 3525420, at *3

(Tex. App .---- Dallas Aug. 16. 2() 12, no pet.) (mern. op.) (concluding evidence including a deed of

trust provision like section 22 in this case and a warranty deed conveying property to appellee was

legally sufficient to establish occupant was tenant at sufferance and that appellee had acquired right

to possession). We resolve this part of Farkas’s first issue against him.

Notice to Vacate

Farkas argues that Fannie Mae did not establish proper delivery of the notice to vacate and,

as a result, Fannie Mae violated section 24.005(f) and (g) of the property code by filing the forcible

detainer proceeding beftre properly delivering the notice to vacate. The property code provides that,

to prevail in a forcible cletainer proceeding, the party seeking possession must show that he gave the

occupant proper notice to vacate at least three days prior to filing suit. TEx. PROP. CoDE ANN. § 24.002(b), 24.005. “Notice by mail may be by regular mail, by registered mail, or by certified mail,

return receipt requested, to the premises in question.” Ic!. § 24.005(f). Additionally, the dcccl of trust provides that a notice to Farkas “shall be deemed to have been given to” Farkas “when mailed by

first class mail[.]”

The record shows that Fannie Mae’s counsel sent two separate copies of the notice, one by

certified mail with return receipt requested and one by first-class mail to the property. Farkas

contends that Fannie Mae did not prove proper delivery of the notice because Fannie Mae presented

evidence that Farkas did not receive the notice sent by certified mail and the testimony concerning

delivery of the copy sent by first-class mail was “legally insufficient evidence to prove delivery of

the Notice to Vacate, because it is based on belief not on personal knowledge[.]” Fannie Mae

argues that it did prove delivery through Jason Sullivan, the custodian of the relevant records for Fannie Mae’s counsel, and that “[i]t was within the Trial Judge’s discretion to weigh the evidence

with regards to the delivery of the Notice to \/acate” and that the court “determined that the

prerequisite delivery occurred and that the delivery of the Notice to Vacate was legally sufficient.”

We agree with lannie Mae.

Sullivan testified that the notice was sent by “both certified and regular mail[.]” He also

testified that the law firm’s standard practice when a letter is returned to the firm is “that it is imaged

into the appropriate file[.]” He testified that, if the notice sent by first-class mail had been returned

to the law firm, he would have found evidence of its return in the file. He also testified that he did

not find any indication in the file that the notice sent by first-class mail had been returned to the law

firm. Consequently, the evidence presented, viewed in the light most favorable to thejudgment, was

legally sufficient to establish that Farkas was given notice to vacate. See Johnson v. Sec ‘v of

Veterans A /Jiirs, No. 05-03-01560-C V, 2004 WL 1615842, at *1 (Tex. App.—Dallas July 20, 2004,

pet. dism’d w.o.j.) (mem. op.) (concluding appelice’s notice to vacate was sufficient when sent by

first—class and certitied mail to address listed Hi deed of trust). f Gore v. Homecomings Fin.

Network, inc., No. 05-06-01701 -CV, 2008 WL 256830, at *2 (Tex. App.—Dallas Jan. 31, 2008, no

pet.) (mem. op.) (finding that party did not meet burden to establish it gave written notice to vacate

where “record affirmatively show[ed] the demand letters sent [by first-class mail and by certified

mail] . . .were returned unopened and undelivered”). We also resolve this part of Farkas’s first issue

against him.

PLEA IN ABATEMENT

In his second issue, Farkas argues that the court erred by denying his plea in abatement

because (1) there was an “existing intervening title dispute at the District Court” and (2) the court

denied his plea “before Fannie Mae established the proof oftenant-landlord relationship[.]” Fannie

—6-- Mae first contends that Farkas has not properly preserved this issue tbr appellate revie\v because he

does not show where in the record he presented the issue to the trial court and where the trial court

ruled on his complaint. The record shows, however, that Farkas presented his plea to the court and

that the court denied his plea.

We review the court’s denial of Farkas’s plea in abatement for an abuse of discretion. See

Lagow v. Humon rd. Roach, No. 05-10-01499-C V. 2012 WL 3636893, at *2 (Tex. App.- —Dallas

August 24. 2012, no pet.); Lee v. GST Transp. Svs., LP, 334 S.W.3d 16, 18 (Tex. App—Dallas

2008, pet. denied). A trial court abuses its discretion when it acts in an unreasonable and arbitrary

manner, or without reference to any guiding rules or principles. See Downer v. Aquamarine

Operators, Inc., 701 S.W.2d 238, 241—42 (Tex. 1985); Lagow, 2012 WL 3636893, at *2.

Farkas argues that Rice v. Pinnev, 51 S.W.3d 705, 712 (Tex. App.—Dallas 2001, no pet.),

and Mitchell v Armstrong Capital Coip., 911 S.W.2d 169, l7 (Tex. App.—Houston [1st Dist.]

1995, writ denied), support his argument that “Fannie Mae did not establish the proof of tenant—

landlord relationship with Farkas, therefore the Court did not have an independent base establishing

immediate possession without resolving the issue of ti[t]le to the property” and, as a result, the court

did not have jurisdiction. But Rice and the record in this case support the opposite conclusion. And,

as we discussed in Rice, Mitchell is distinguishable because, unlike the present case, the lien

document at issue in Mitchell did not create a landlord-tenant relationship upon default or any other

independent grounds to establish the right to immediate possession. Rice, 51 S.W.3d at 711—12; see

Mitchell. 911 S.W.2d at 170—7 1.

The record here shows that the deed of trust established a landlord-tenant relationship

between Fannie Mae and Farkas. As in Rice, “[t]his landlord-tenant relationship provided an

independent basis on which the trial court could determine the issue of immediate possession without

—7— resolving the issue of title to the property.” Rice, 51 S.W.3d at 712; see Bruce, 352 S.W.3d at

893—94 (concluding similar provision in deed of trust established a landlord-tenant relationship that

served as an independent basis for determining right to immediate possession without resolving title

issue); US. Bank Nat 7 Ass ‘a v, Freenev, 266 S.W.3d 623, 625—26 (Tex. App.—Dallas 2008, no

pet.) (same). We resolve Farkas’s second issue against him.

CoNcLusioN

We resolve Farkas’s two issues against him and affirm the judgment of the county court at

law. //..7 2 // Elthj3ETH LANi-MlER,$ J’U SjCE

Ii 1416F.P05

—8— (futirt of Appizthi iiftI! )iitrirt of cxu at Ja11a JUDGMENT JANOS FARKAS. Appellant Appeal from the County Court at Law No. 2 of Dallas County, Texas. (Tr.Ct.No. CC-il- No. 05-1 l-01416-CV V. 06326-B). Opinion delivered by Justice Lang-Miers, FEDERAL NATIONAL MORTGAGE .Justices O’Neill and FitzGerald ASSOCIATION A/K/A FANNIE MAE, participating. Appel lee

In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED. It is ORflERED that appeiiee Federal National Mortgage Association a/k/a Fannie Mae recover its costs of this appeal from appellant Janos Farkas and from the supersedeas bond or cash deposit in lieu of supersedeas bond. After all costs have been paid, we DIRECT the clerk of the Dallas County court to release the balance, if any, of the cash deposit in lieu of supersedeas bond to Janos Farkas.

.Iudgment entered October 3 1, 2012.

,4iABET LANd-MiiRS JVTICE