Fenlon v. Harris Cnty.

569 S.W.3d 783
CourtCourt of Appeals of Texas
DecidedDecember 20, 2018
DocketNO. 01-17-00877-CV
StatusPublished
Cited by6 cases

This text of 569 S.W.3d 783 (Fenlon v. Harris Cnty.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fenlon v. Harris Cnty., 569 S.W.3d 783 (Tex. Ct. App. 2018).

Opinion

Evelyn V. Keyes, Justice

In this case involving liens for delinquent property taxes, Betty James, the owner of the subject property, contracted with the predecessor in interest of appellee Propel Financial Services, LLC, an entity *786that paid delinquent taxes on James's behalf and received a transfer of the tax liens on the property. Several years later, after James had passed away, Harris County filed the underlying suit, seeking foreclosure of its tax liens on the property. Propel intervened, also seeking foreclosure of its liens, and appellant Robert Fenlon, who had purchased the property during the pendency of the suit, became a defendant. After a tax master made recommendations in the case, the trial court entered judgment in favor of Harris County and Propel, ordering foreclosure of their tax liens. With respect to Propel, the trial court awarded Propel $14,173.67 for "delinquent base tax" for the 2003-2007 tax years, $10,477.25 for "penalty & interest," and $6,304.22 for attorney's fees.

In five issues, Fenlon contends that (1) legally and factually insufficient evidence supports the trial court's finding that the base tax to which Propel is entitled is $14,173.67; (2) legally and factually insufficient evidence supports the finding that Propel had a valid tax lien for the 2006-2007 tax years; (3) legally and factually insufficient evidence supports the award of $10,477.25 in penalties and interest to Propel; (4) the award of $6,304.22 in attorney's fees to Propel is unreasonable and excessive; and (5) legally and factually insufficient evidence supports the finding that Fenlon is personally liable for the amounts awarded in the judgment.

We modify the judgment of the trial court and affirm as modified.

Background

Betty James owned a piece of residential property on Belarbor Street in southeast Houston. After several years' worth of property taxes had become delinquent, James entered into an agreement in September 2008 with Moncor, Inc.-the predecessor in interest of intervenor and appellee Propel Financial Services-in which Moncor agreed to pay James's delinquent taxes for the years 2003-2007 and assumed a tax lien on the property (the Note). In the Note, James agreed to re-pay Moncor $10,690.37 in principal, plus interest, with her monthly payment set at $171.82. The Note had a maturity date of October 1, 2018.

At the same time James signed the Note, she also executed a Deed of Trust. James agreed, among other things, to make all monthly payments under the Note and "not to grant another tax lien pursuant to" Texas Tax Code section 32.06. The Deed of Trust specifically defined what constituted an "event of default," including James's failure to timely make any payment under the Note, and it provided remedies for Moncor if a default occurred, including acceleration of the outstanding balance of the Note and foreclosure of the tax lien that Moncor held on the property. The Deed of Trust contained the following provision:

Grantor [James] represents that this deed of trust and the Note are given for the following purposes: The Grantor has requested and authorized the Lender [Moncor] to pay the ad valorem taxes, penalties, interest and collection costs assessed against the Property for [James's account number] for taxes on the Property that are not delinquent and taxes on the Property that are delinquent and due and owing by the Grantor to Harris County, Texas, and all other taxing units for which Harris County, Texas serves as the collecting agent and/or tax collector ... and for which the Harris County Tax Assessor Collector collects taxes (hereinafter collectively the "Taxing Units") and the Grantor has requested and authorized that tax collector for the Taxing Units (hereinafter the "Tax Assessor Collector") to *787transfer the tax liens held by the Taxing Units securing the payment of all of the above described taxes to the Lender as is authorized by V.T.C.A., Tax Code § 32.06. The Note evidences the amount advanced by the Lender. This deed of trust does not waive the tax liens, and the tax liens and the lien and rights created by this instrument shall be cumulative.

Neither the Note nor the Deed of Trust expressly stated which tax years were covered by the agreement between James and Moncor.

James executed two affidavits "Authorizing Payment of Taxes and Transfer of Tax Lien": one for the 2003-2005 tax years, and one for the 2006-2007 tax years. These affidavits identified the property and authorized Moncor to pay the ad valorem taxes owed to various Harris County taxing units for the 2003-2005 tax years and the 2006-2007 tax years. James also authorized the Harris County Tax Assessor to transfer the tax liens held by the taxing units for these tax years to Moncor. On November 7, 2008, the Harris County Tax Assessor certified that Moncor had paid $4,386.82 in delinquent taxes for the 2006-2007 tax years on James's behalf, and the Tax Assessor transferred the tax lien for these years to Moncor. On March 17, 2015, the Tax Assessor certified that Moncor had paid $5,098.35 in delinquent taxes for the 2003-2005 tax years on James's behalf, and the Tax Assessor transferred the tax liens for these years to Moncor. The Note, Deed of Trust, James's affidavits, and the Tax Assessor's certifications were all filed in the Harris County property records.1

No provision was made in the Deed of Trust for Moncor's payment of any taxes on the property after the 2007 tax year. However, evidence in the record indicates that Moncor paid the ad valorem taxes on the property for the 2008-2009 tax years on August 31, 2010. The record does not include a certificate from the Harris County Tax Assessor transferring the tax liens for these two years to Moncor. There is no evidence that anyone paid the taxes on the property after the 2009 tax year, although Harris County and related entities continued to levy taxes on it.

James passed away in 2012 and her two sons became owners of the property. In July 2015, Harris County-on its own behalf and on behalf of the City of Houston, the Houston Independent School District, and the Houston Community College System-filed suit against James's sons and Propel to recover delinquent ad valorem taxes assessed against the property for tax years 2010-2014. Harris County named both of James's sons as defendants "in rem only" and stated that it did not seek a personal judgment against any defendant identified as "in rem only." Harris County alleged that it was owed a total of $9,908.74 in taxes, penalties, and interest for the 2010-2014 tax years. Harris County asserted tax liens against the property for the 2010-2014 tax years, and it sought foreclosure of its liens. Harris County also sought "personal judgment against Defendant(s) who owned the property on January 1 of the year for which the taxes were imposed for all taxes, penalties, interest, *788and costs that are due or will become due on the property, together with attorney's fees and abstractor's fees."

James's sons appeared and filed an answer generally denying the allegations in Harris County's petition. Moncor's successor in interest, Propel, filed an answer and plea in intervention. Propel alleged that it held "a superior tax lien interest in the subject property" but that it was "not personally liable for any of the amounts or liens claimed" by Harris County.

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Bluebook (online)
569 S.W.3d 783, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fenlon-v-harris-cnty-texapp-2018.