NO. 07-07-0303-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
OCTOBER 2, 2007
______________________________
GARY ZARS DBA GARY'S POOL AND PATIO STORE, APPELLANT
V.
JEREMY AND BRANDI BROWNLOW, APPELLEES
_________________________________
FROM THE COUNTY COURT AT LAW OF HAYS COUNTY;
NO. 8877-C; HONORABLE HOWARD S. WARNER, JUDGE
_______________________________
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
ON NOTICE OF FILING BANKRUPTCY
On September 27, 2007, appellant Gary Zars filed a Notice of Filing Bankruptcy in
this appeal. A copy of his Notice of Bankruptcy Case Filing in the United States
Bankruptcy Court for the Western Division of Texas was attached to the notice, indicating
that the bankruptcy case was filed with the bankruptcy court on or about September 18,
2007.
Pursuant to Texas Rule of Appellate Procedure 8, this appeal is suspended until
further order of this court. The parties are directed to advise the clerk of this court of any
change in the status of appellant Gary Zars' bankruptcy proceeding which would affect the
status of this appeal, including but not limited to the filing of a Motion to Reinstate. Tex. R.
App. P. 8.3.
It is so ordered.
Per Curiam
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Malnar and the Mechells executed a contract for the sale of real property (the
contract) on August 22, 1997. The realty consisted of a house and the land on which it
stood. Furthermore, its purchase price was $85,000. Of that $85,000, Malnar was
deemed to have paid $14,395 at the time the contract was executed. (2) The balance,
however, was to be paid in monthly installments of $561.31, the first coming due on
September 22, 1997, and the remainder coming due on the 22nd of each ensuing month.
Several years later, Malnar defaulted on her obligation. According to the summary
judgment evidence provided by the Mechells, she failed to pay the November 22, 1999
payment and at least one other. This circumstance caused the Mechells, on November
23, 1999, to send her (through their attorney) a written notice of default. In that notice, the
Mechells informed Malnar that two installments were outstanding and that the sum due
totaled $1,601.04. Furthermore, of that sum, $135.40 constituted principal, $987.22
constituted interest, and $478.42 constituted escrow. Malnar was also told, via the letter,
that the Mechells intended to cancel the contract if she did not cure the default by
December 23, 1999.
Needless to say, Malnar did not cure the default by December 23, 1999.
Consequently, on December 23, 1999, counsel for the Mechells sent Malnar written notice
stating that the contract was canceled and that her interest in the realty was forfeited.
After filing the suit from which this appeal arose, the Mechells sought summary
judgment. (3) In their motion they alleged that they "provided [Malnar] all notices required
by law in a timely manner and in accordance with all provisions of the Texas Property
Code." The trial court granted the motion and stated in its judgment that the movants
"have taken all necessary and lawful steps to effect a cancellation of the contract for deed
. . . and the eviction of the Defendant . . . ."
Standard of Review
The standards of review governing appeals from summary judgments are well-settled. Rather than reiterate them, we refer the parties to Nixon v. Mr. Property
Management Co., 690 S.W.2d 546, 548 (Tex. 1985) and Kimber v. Sideris, 8 S.W.3d 672,
674-75 (Tex. App.--Amarillo 1999, no pet.).
Next, the extent of the prior notice which the Mechells were to afford Malnar
depends upon whether the realty was used or to be used for residential purposes. If it was
so used, then the provisions of the Texas Property Code controlled, as those provisions
existed before the 2001 amendments. (4)
Next, according to §5.062 of that Code, the seller could declare forfeiture and
rescind the contract 15 days after affording the seller notice of his intent to do so if the
buyer had paid less than 10% of the sales price. Act of May 27, 1995, 74th Leg., R.S. ch.
994, §2, 1995 Tex. Gen. Laws 4982-83. If the buyer had paid 10% but less than 20%,
then the seller had to wait 30 days. Id. If 20% or more of the price had been paid, then
the buyer was entitled to 60 days prior notice. Id. Finally, if the notice was sent by mail,
then the notice was deemed "given when it [was] mailed to purchaser's residence or place
of business." (5) With this in mind, we turn to the facts of this case.
Application
Issue Three
We initially address Malnar's third issue given its ease of disposition. In it, she
argues that a material issue of fact exists regarding whether she paid 20% or more of the
purchase price by the time the Mechells notified her of their intent to rescind. We disagree
and overrule the issue.
In reading the record in a light most favorable to Malnar, see Miller v.
Galveston/Houston Diocese, 911 S.W.2d 897, 898-99 (Tex. App.--Amarillo 1995, no writ)
(obligating us to so read the record), we discover that she initially paid $14,395.08 for the
realty and then made 24 monthly payments of $561.31. According to the notice of default,
each payment consisted of principal in an amount approximating $67.70. (6) If one were to
multiply 67.70 by 24, he would derive a sum of $1,624.80. If that sum were then added to
the initial $14,395.08 paid by Malnar, then the total amount of payments made against the
original purchase price of $85,000 would be $16,019.88. Next, the latter is approximately
18.8% of $85,000. And, because 18.8% is less than 20%, the Mechells established, as
a matter of law, that they were not obligated to afford Malnar 60 days prior notice of their
intent to rescind.
Issues One and Two
Next, we address the contentions asserted via the first and second issues. Therein,
she alleges that a material issue of fact exists regarding whether she was afforded 30 days
prior notice of their intent to rescind as required by statute. We agree and sustain them.
In computing a period of days under the Texas Property Code, the first day is
excluded from the calculation while the last day is included. Tex. Gov't Code Ann.
§311.014(a) (Vernon 1998). For instance, in Claybon v. State, 672 S.W.2d 881 (Tex.
App.--Dallas 1984, pet. ref'd), the court was asked whether the trial court afforded counsel
ten days to prepare for trial as required by a statute there involved. Counsel was
appointed on the 8th of July and trial started on July 18th. In applying to the
circumstances before it a provision identical to §311.014 of the Government Code, the
court held that counsel had only been afforded nine days preparation time, even though
July 18th was the tenth day after July 8th. Claybon v. State, 672 S.W.2d at 882. So, what
we learn from Claybon is that if a certain period must expire before an act can occur, the
last day of the period must not only be included in the calculation but also expire in toto
if one is to comply with §311.014(a).
Finally, so interpreting §311.014(a) in circumstances like those at bar would also
comport with §5.061(2) of the Texas Property Code. This is true because that provision
expressly requires the "expiration" of the time period before the seller can invoke his
remedy of rescission or forfeiture. Act of May 27, 1995, 74th Leg., R.S. ch. 994, §2, 1995
Tex. Gen. Laws 4982-83. If the 30th day has not expired, then the party has not complied
with §5.061(2).
Here, summary judgment evidence appears of record illustrating that the Mechells
rescinded or canceled the contract on December 23, 1999. This act was made manifest
by a letter dated and mailed on December 23rd, though Malnar received it on the 24th.
Simply put, December 23rd was the 30th day of the time period contemplated under
§5.061(2). So, the Mechells invoked their remedy of rescission or forfeiture on the 30th
day of the time period, and thereby denied Malnar the full 30 days she had to cure the
default. See id. §5.063 (affording the buyer the opportunity to cure). And, because the
statute required the expiration of 30 days before they could do so, they did not prove, as
a matter of law, that they complied "with all provisions of the Texas Property Code" as
alleged in their motion for summary judgment. (7)
Finally, and to the extent that the Mechells contend that §5.061 does not apply
because there is no evidence that the contract involved realty used or to be used as a
residence, we say the following. The term "residence" has been construed as the place
where one actually lives or has his home. Owens-Corning v. Carter, 997 S.W.2d 560, 571
(Tex. 1999), cert. denied, 528 U.S. 1005, 120 S.Ct. 500, 145 L.Ed.2d 386 (1999). It
connotes a home and a fixed place of habitation to which one intends to return when away.
Id. This does not mean, however, that one must be physically present within the home to
claim it as a residence. He may well live temporarily in one place while maintaining his
residence at another. See Tovar v. Board of Trustees, 994 S.W.2d 756, 762 (Tex.
App.--Corpus Christi 1999, pet. denied) (stating that if a person moves to a new location
only temporarily, presently intending to return to the previous place of habitation, the
person does not lose his residence). And, that he leased the abode while physically
absent from it does not mean, in and of itself, that the abode was no longer his residence.
Kirk v. Barnett, 566 S.W.2d 122, 123 (Tex. Civ. App.--Houston [14th Dist.] 1978, no writ).
Next, in again viewing the evidence and reasonable inferences therefrom in a light
most favorable to Malnar, we find the following in the record. First, after executing the
contract, Malnar moved into and lived in the house. Within a year, however, she "moved
out." It was left vacant for several months before she rented it to a third party. The lessee
then vacated the premises in May of 1999. And, though the Mechells asserted that it was
vacant until January of 2000, they nevertheless attested that Malnar's young children were
in the house (along with a mattress and refrigerator) when they attempted to gain
possession of it on December 27, 1999, four days after terminating the contract.
Furthermore, during an encounter with the Mechells on that date, i.e. December 27th,
Malnar informed them that she "was going to move back in" and, according to them, "she
did." The foregoing constitutes some evidence from which a jury could reasonably infer
that the contract involved real property used or to be used as Malnar's residence. Again,
she bought the house, moved into it, lived there, moved out, and then returned. (8) And, that
she rented the facility to a third party does not establish, as a matter of law, either that she
abandoned it as a residence or that it was not used or to be used as a residence. Kirk v.
Barnett, supra. Thus, at the very least, a material issue of fact exists regarding whether
the realty was used or to be used as a residence for purposes of §5.061 of the Texas
Property Code.
Accordingly, the judgment of the trial court is reversed and the cause is remanded
for further proceedings.
Brian Quinn
Justice
Publish.
1. John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment. Tex. gov't
code ann. §75.002(a)(1) (Vernon Supp. 2002).
2.
She actually was given a credit of $14,395.08 against the purchase price.
3.
Actually, they did so twice. The first motion was granted by the trial court but reversed on appeal.
The appellate court held that the Mechells failed to show ownership of the property and, therefore, their right
to summary judgment. Malnar v. Mechell, No. 09-00-312-CV, slip op., 2001 Tex. App. LEXIS 488 (Tex.
App.--Beaumont January 25, 2001).
4.
Since the cancellation occurred in 1999, the version of the Code in existence at that time, i.e. the
1995 version, applies.
5.
Malnar does not contend that the notice was not sent to her residence or place of business.
6.
The $67.70 figure was derived by dividing $135.40 by two. Next, $135.40 equaled the total
outstanding principal (and just the principal) which had accrued via the failure to make two monthly
installments. So, if failing to pay for two months results in the total principal of $135.40 accruing, then
principal for one month would be no more than $67.70.
7.
We did not ignore the Mechells' contention that because Malnar received notice of their act on the
24th, they complied with the Code. Section 5.061 does not state that the seller can rescind before or on the
30th day as long as notice of the rescission is not received until sometime thereafter. It says that 30 days
must expire before they can rescind. Furthermore, if the date on which notice is received constitutes the
pertinent date, then we must still conclude that Malnar received notice before the expiration of 30 days. This
is so because §5.062(c) of the Texas Property Code states that "[n]otice by mail is given when it is
mailed . . . . " Act of May 27, 1995, 74th Leg., R.S. ch. 994, §2, 1995 Tex. Gen. Laws 4982-83. And, the
record illustrates that the notice here was mailed on December 23rd. So, it appears that Malnar received
notice of the cancellation on December 23rd and not the 24th.
8.
When she actually return cannot be divined from the record. All we know is that her children were
there when the Mechells attempted to gain possession of it and that Malnar informed the Mechells of her
intent to return to the abode.