Opinion issued May 11, 2023
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-21-00586-CV ——————————— GARZA PROPERTIES LLC, Appellant V. DURANGO PORTFOLIO, INC., HREAL COMPANY, LLC, DANNY HILAL, NIKOLA KNEZEVIC, AND JONATHAN R. CAMPBELL, Appellees
On Appeal from the 164th District Court Harris County, Texas Trial Court Case No. 2019-53269
MEMORANDUM OPINION
Under Chapter 209 of the Property Code, “[t]he owner of property in a
residential subdivision” or “a lienholder of record” has a statutory right to redeem
the property from “any purchaser at a sale foreclosing a property owners’ association’s assessment lien” by timely exercising the right and paying the
prescribed redemption amount.1 This appeal arises from an attempted redemption of
property by Garza Properties LLC (Garza), a judgment lienholder against the
property, from Durango Portfolio, Inc. (Durango) and HReal Company, LLC
(HReal), the purchasers of the property at an assessment lien foreclosure sale. On
summary judgment, the trial court rejected Garza’s claims that it was a lienholder of
record and obtained the former property owner’s redemption right upon execution
of its judgment lien; that its interest in the property was superior to Durango’s and
HReal’s interest; and that Durango and HReal conspired with others—Danny Hilal,
Nikola Knezevic, and Jonathan R. Campbell—to deprive Garza of its rights to the
property.
On appeal, Garza contends the trial court’s summary-judgment rulings are
erroneous either because Garza established its redemption and superior title claims
as a matter of law or fact issues preclude the judgment against it.
We reverse in part, affirm in part, and remand for further proceedings.
Background
The property at issue, known as 2723 Blue Wind, Houston, Texas 77084
(Property), is in the Estates at Cullen Park subdivision and subject to the
1 See TEX. PROP. CODE §§ 209.001–.017 (Texas Residential Property Owners Protection Act); see also id. § 209.011(b). 2 subdivision’s Declaration of Restrictions, Covenants, and Conditions (Declaration).
The Declaration, recorded in July 1996, establishes the Estates at Cullen Park
Homeowners’ Association (Association), and authorizes the Association to collect
assessments from subdivision property owners. Relevant here, the Declaration
creates “a charge and continuing lien” that secures the payment of assessments and
related costs with the property against which the assessments are made.2 Each
property owner, “by [their] acceptance of a deed or other conveyance of the Lot,”
grants to the Association’s board, as trustee for the Association’s benefit, a deed of
trust with a power of sale. Upon an owner’s default in the payment of assessments,
the trustee can sell the defaulting owner’s property to the highest bidder at a
nonjudicial foreclosure sale.
ALS Projects Group, Inc. (ALS) formerly owned the Property. In April 2014,
Innovative Flooring Solutions, Inc. (Innovative Flooring) obtained a judgment
against ALS. Innovative Flooring recorded an abstract of judgment in the Harris
County records on June 13, 2014, thereby attaching a judgment lien to the Property.3
2 As provided in the Declaration, the lien securing assessment payments is superior to any subsequent “charges, liens, or encumbrances,” except for: (1) bona fide mortgage or deed of trust liens for purchase money or home improvement loans; (2) ad valorem tax liens; and (3) such other liens as the Association’s board, in its discretion, elects to voluntarily subordinate the Association’s lien. 3 “When properly recorded and indexed, an abstract of judgment creates a judgment lien that is superior to the rights of subsequent purchasers and lien holders.” Noble Mortg. & Invs., LLC v. D & M Invs., LLC, 340 S.W.3d 65, 81 (Tex. App.—Houston 3 Nine months later, Garza obtained an assignment of the judgment lien. Garza filed
the assignment in the Harris County records on March 31, 2015.
ALS, still the Property’s owner, failed to pay assessments as required by the
Declaration. In May 2018, the Association applied to a Harris County district court
for an order authorizing a nonjudicial foreclose of its assessment lien against the
Property. In support of its application, the Association submitted the affidavit of its
property manager stating that ALS had defaulted on three scheduled payments and
owed $7,053.08 in unpaid assessments and related costs. The district court
authorized the Association to proceed with a foreclosure sale.
The Property was sold to Durango and HReal at the foreclosure sale on
February 5, 2019.4 The trustee’s deed transferring the Property to Durango and
HReal was recorded on February 26, 2019, and states:
This conveyance is expressly made and accepted subject to the redemption right of Chapter 209 of the Texas Property Code, as well as all valid and subsisting easements, liens, restrictions, reservations, covenants, conditions and royalty and mineral interests relating to the Property to the extent that the same are valid and enforceable against the Property as the same are shown by instruments filed for record in the Office of the County Clerk of Harris County, Texas, and to the extent that the same are valid and enforceable and have not been cleared from the record as a result of the foreclosure described herein.
[1st Dist.] 2011, no pet.) (quoting Wilson v. Dvorak, 228 S.W.3d 228, 233–34 (Tex. App.—San Antonio 2007, pet. denied); see also TEX. PROP. CODE § 52.001. 4 The trustee’s deed conveying the Property to Durango and HReal states a purchase price of $10,201.00, which the deed recited was “the sum then owing by [ALS] to [the Association].” 4 Meanwhile, in the week before the foreclosure sale, Garza acted to enforce its
judgment lien against ALS. Garza obtained a writ of execution from the county clerk
on January 30, 2019. The constable’s return recited that the constable received the
writ on February 25, levied an execution on the Property on February 27, and later
sold “all of the right, title, and interest owned by [ALS] in the [P]roperty” to Garza
as the highest bidder at a constable’s sale conducted on April 2, two months after the
assessment lien was foreclosed. The constable’s deed conveying the Property to
Garza was recorded on April 26.
On May 13, 2019, Garza tried to redeem the Property. In a letter addressed to
the Association, Durango, and HReal, Garza invoked the statutory right of
redemption in Chapter 209 of the Property Code and requested the redemption
amount. See TEX. PROP. CODE § 209.011(b) (“The owner of property in a residential
subdivision or a lienholder of record may redeem the property from any purchaser
at a sale foreclosing a property owners’ association’s assessment lien not later than
the 180th day after the date the association mails written notice of the sale to the
owner and the lienholder under Section 209.010.”); id. § 209.011(e) (to redeem
property bought at foreclosure sale by person other than property owner’s
association, owner or lienholder must pay association all amounts due plus other
costs and must pay purchaser purchase price plus other costs). Durango and HReal
5 responded that Garza had no right to redeem the Property because Garza was neither
an owner of the Property nor a lienholder of record, as required by the statute.
On June 17, 2019, Garza tendered a redemption payment to Durango and
HReal for the purchase price listed on the trustee’s deed and expressed its
willingness to pay any extra amount required. Durango and HReal again refused to
recognize Garza’s right of redemption and returned the tendered payment.
After the second rejection of its redemption request, Garza sued Durango and
HReal.5 Garza alleged that its constable’s deed conveyed superior title to the
Property and sought to remove the cloud on title created by the trustee’s deed or,
alternatively, to redeem the Property from Durango and HReal. Garza also named
three other defendants: Danny Hilal (of Durango), Nikola Knezevic (of HReal), and
Jonathan R. Campbell (whom Garza alleged had purchased foreclosed properties
with HReal in the past). Garza alleged that these individuals conspired with Durango
and HReal to chill bidding at the assessment lien foreclosure sale and to prevent the
Property from being redeemed.
The defendants answered, and the parties filed competing motions for
summary judgment. The defendants jointly moved for a final, traditional summary
judgment on Garza’s claim of superior title to the Property. They also argued that
5 Garza also sued the Association but later nonsuited its claims against the Association. 6 Garza was not an “owner” entitled to redeem the Property under Chapter 209
because Garza did not hold record title to the Property before Durango and HReal
purchased it. And although Garza held an assignment of a recorded judgment lien,
Garza could not redeem the Property as a “lienholder of record” because that
statutory term refers only to deed of trust lienholders. Finally, while Garza did not
specifically plead a conspiracy claim, the defendants’ summary-judgment motion
addressed the factual allegations of a conspiracy “in the interest of completely
disposing of [Garza’s] claims.” They argued that any conspiracy claim failed as a
matter of law because Garza had not shown that they acted to chill bidding at the
assessment lien foreclosure sale and because Garza could not complain about a
deprivation of a redemption right it did not possess.
Garza argued in its traditional motion for a partial summary judgment that it
held superior title to the Property as a matter law because its judgment lien against
the Property was first in time and thus senior to the Association’s foreclosed
assessment lien. In addition, Garza identified two sources of its claimed redemption
right. First, Garza claimed a right to redeem the Property as a “lienholder of record”
because it held a judgment lien against the Property. Second, Garza claimed that it
had acquired ALS’s right to redeem the Property as the former owner. On this second
claim, Garza argued that ALS’s right to redeem the Property was “an interest in real
property that is transferrable by a voluntary or involuntary sale” and that the
7 constable’s deed conveying “all of the right, title, and interest owned by [ALS] in
the [P]roperty” included ALS’s right to redeem the Property after foreclosure. Garza
also complained of unspecified “irregularities” in the assessment lien foreclosure
that “caused or contributed to a grossly inadequate sales price at the foreclosure
sale.”
After considering the parties’ competing arguments and evidence, the trial
court granted the defendants’ joint motion for summary judgment and denied
Garza’s motion.6 The trial court ordered that Garza take nothing on its claims against
the defendants.
Standards of Review
We review a trial court’s grant of summary judgment de novo. Travelers Ins.
Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). When reviewing a summary
judgment, we must (1) take as true all evidence favorable to the nonmovant and
(2) indulge every reasonable inference and resolve any doubts in the nonmovant’s
favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). If a trial
court grants summary judgment without specifying the grounds, we must uphold the
trial court’s judgment if any one of the grounds asserted in the motion is meritorious.
6 The trial court excluded certain of Garza’s exhibits from the summary-judgment evidence. Although Garza complains on appeal that the trial court erred by sustaining Durango and HReal’s objections to the excluded exhibits, we do not reach the issue because it is unnecessary to do so given our disposition of Garza’s other issues. See TEX. R. APP. P. 47.1.
8 FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000);
Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—Houston [1st Dist.]
2005, pet. denied).
Relevant here, to obtain a traditional summary judgment, the movant has the
burden to show that no genuine issue of material fact exists and that the trial court
should grant judgment as a matter of law. TEX. R. CIV. P. 166a(c); KPMG Peat
Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).
When both parties move for summary judgment, each party bears the burden of
establishing its entitlement to judgment as a matter of law. City of Garland v. Dallas
Morning News, 22 S.W.3d 351, 356 (Tex. 2000). A plaintiff moving for traditional
summary judgment must conclusively establish each element of its cause of action.
Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Anglo-Dutch
Petroleum Int’l, Inc. v. Haskell, 193 S.W.3d 87, 95 (Tex. App.—Houston [1st Dist.]
2006, pet. denied). A defendant moving for traditional summary judgment must
negate at least one essential element of the plaintiff’s cause of action or conclusively
establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez,
941 S.W.2d 910, 911 (Tex. 1997). When the trial court grants one motion and denies
the other, we review the summary-judgment evidence presented by both parties and
determine all questions presented. City of Garland, 22 S.W.3d at 356. We must
render the judgment the trial court should have rendered or reverse and remand if
9 neither party has met its summary-judgment burden. Id.; Al’s Formal Wear of
Houston, Inc. v. Sun, 869 S.W.2d 442, 444 (Tex. App.—Houston [1st Dist.] 1993,
writ denied).
The summary-judgment rulings here involve questions of statutory
construction, which we also review de novo. Loaisiga v. Cerda, 379 S.W.3d 248,
254–55 (Tex. 2012). When courts construe statutes, they should start with the text
because it is the best indication of the Legislature’s intent. See Fresh Coat, Inc. v.
K–2, Inc., 318 S.W.3d 893, 901 (Tex. 2010). “When the words of a statute are
unambiguous, then, this first canon is also the last: ‘judicial inquiry is complete.’”
Conn. Nat’l Bank v. Germain, 503 U.S. 249, 254 (1992) (quoting Rubin v. United
States, 449 U.S. 424, 430 (1981)). A court should interpret a statute by reference to
its language alone when it can do so. See Molinet v. Kimbrell, 356 S.W.3d 407, 411
(Tex. 2011). But courts are not confined to isolated statutory words or phrases;
instead, they review the entire act to determine legislative intent. Meritor Auto., Inc.
v. Ruan Leasing Co., 44 S.W.3d 86, 90 (Tex. 2001); City of Hous. v. Hildebrandt,
265 S.W.3d 22, 25 (Tex. App.—Houston [1st Dist.] 2008, pet. denied).
Trespass to Try Title
Garza contends the trial court erred by denying its motion for summary
judgment on trespass to try title and instead granting Durango and HReal’s motion
10 seeking dismissal of that claim. According to Garza, the record establishes its
superior title as a matter of law.
A trespass to try title action is a procedure by which claims to title may be
adjudicated. See Jinkins v. Jinkins, 522 S.W.3d 771, 786 (Tex. App.—Houston [1st
Dist.] 2017, no pet.); see also TEX. PROP. CODE § 22.001(a) (“A trespass to try title
action is the method of determining title to lands, tenements, or other real
property.”). The plaintiff in a trespass to try title action must recover, if at all, on the
strength of its own title and may not rely on the weakness of the defendant’s title.
Rogers v. Ricane Enters., Inc., 884 S.W.2d 763, 768 (Tex. 1994); Ellis v. Buentello,
No. 01-12-00098-CV, 2012 WL 3528009, at *4 (Tex. App.—Houston [1st Dist.]
Aug. 16, 2012, no pet.) (mem. op.). The plaintiff has the burden to establish superior
title by showing it has (1) title emanating from the sovereignty of the soil,
(2) superior title from a common source, (3) title by adverse possession, or (4) title
by prior possession coupled with proof that possession has not been abandoned.
Ellis, 2012 WL 3528009, at *4.
Garza sought to prove superior title from a common source—ALS—based on
its assertion of lien superiority. Garza asserts that its judgment lien attached to the
Property on June 13, 2014, when Innovative Flooring filed the abstract of judgment
against ALS in the Harris County real property records, while the Association’s
11 assessment lien could not have attached before January 1, 2016, when ALS first
defaulted on its assessment obligation. Garza asserts:
Because the assessments are annual and come into existence [under the Declaration] on January 1 of each calendar year and there were three remaining unpaid annual assessments due as of April 5, 2018, a separate lien priority date was created on January 1, 2016, January 1, 2017, and January 1, 2018. In this case the January 1, 2016 annual assessment was the earliest date that the [Association’s] assessment lien’s priority was established.[7]
According to Garza’s timeline, its judgment lien was senior to the Association’s
assessment lien because the judgment lien was first in time. Based on this timeline,
Garza contends that the foreclosure of the junior assessment lien did not impair its
senior judgment lien and so it obtained superior title through the constable’s sale
executing the senior judgment lien.8
7 There is no conclusive evidence in the record establishing when ALS defaulted on assessments. The affidavit of the Association’s property manager states only that ALS was “in default of the [d]eed [r]estrictions” and that, “[a]s of April 5, 2018, the number of scheduled payments remaining unpaid by [ALS] [was] [three].” The affidavit does not specify the dates of the unpaid assessments or indicate when the “scheduled payments” were due. Garza interprets the affidavit to mean that ALS defaulted on the three annual assessments immediately preceding the Association’s application for an order authorizing nonjudicial foreclosure of its assessment lien— the annual assessments for 2016, 2017, and 2018. We need not determine whether Garza’s reading of the affidavit is correct because there is no dispute that ALS defaulted on assessments after Garza’s judgment lien attached to the Property. Thus, Garza’s contention of lien superiority can be reviewed without regard for the specific date of ALS’s default. 8 We understand Garza’s argument to rest on the common law principle that “the successful bidder at a junior lien foreclosure takes title subject to the prior liens.” See, e.g., Conversion Props., LLC v. Kessler, 994 S.W.2d 810, 813 (Tex. App.— Dallas 1999, pet. denied); see also DiSanti v. Wachovia Bank, N.A., No. 2-08-330-CV, 2009 WL 1372970, at *3–4 (Tex. App.—Fort Worth May 14, 2009, 12 For their part, Durango and HReal do not dispute that the judgment lien
attached to the Property on June 13, 2014. But they disagree with Garza on the
judgment lien’s priority. They respond that the assessment lien was the senior lien
because it was created by the filing of the Declaration in 1996 and attached
continuously thereafter. According to Durango and HReal, the foreclosure of the
senior assessment lien extinguished Garza’s junior judgment lien.
Considering the parties’ disagreement and the trial court’s ruling, our primary
inquiry is whether the summary-judgment record establishes when the assessment
lien attached as a matter of law. Generally, different liens upon the same property
have priority according to the time of their creation. See AMC Mortg. Servs., Inc. v.
Watts, 260 S.W.3d 582, 585 (Tex. App.—Dallas 2008, no pet.); World Help v.
Leisure Lifestyles, Inc., 977 S.W.2d 662, 668 (Tex. App.—Fort Worth 1998, pet.
denied). This rule is known as “first in time is first in right.” Windham v. Citizens
Nat’l Bank, 105 S.W.2d 348, 351 (Tex. App.—Austin 1937, writ dism’d); see also
Tanya L. McCabe Trust v. Ranger Energy LLC, 531 S.W.3d 783, 798 (Tex. App.—
Houston [1st Dist.] 2016, pet. denied).
In support of their contention that the Association’s assessment lien was
senior, Durango and HReal rely on the Texas Supreme Court’s opinion in Inwood
pet. denied) (mem. op.) (holding purchaser at homeowners’ association foreclosure sale took property subject to superior vendor’s lien). 13 N. Homeowners’ Ass’n, Inc. v. Harris, 736 S.W.2d 632 (Tex. 1987). There, the issue
of lien priority arose in the context of a conflict between an association’s declaration
that created assessment liens and a homeowner’s homestead rights in the same
property. Id. at 635–36. The Court held that the association’s interest was superior
to the homeowners’ homestead rights because the association’s assessment lien
attached when the association’s original declaration was filed, before the
homeowners took title, and because the assessment lien ran with the land. Id. at 636–
35. In determining when the assessment lien attached, the Court looked to the
parties’ agreement in the original declaration, which created continuing assessment
liens on the date of the declaration. See id. at 634–35. Though the declaration text is
not quoted in Inwood, the Court stated:
Under Article IV of the declaration, each person receiving a deed for a lot in the subdivision “is deemed to covenant and agree to pay the Association the following: (a) annual assessment or charges; and (b) special assessments for capital improvements.” These assessments, plus interest and costs of collection, were designated to be “a charge on the land and shall be secured by a continuing Vendor’s Lien upon the Lot against which such assessments or charges are made.”
Id. at 633.
In contrast, Garza supports its contention that the judgment lien is senior
because the assessment did not attach until ALS defaulted on assessments with
citation to Red Rock Properties 2005, Ltd. v. Chase Home Finance, L.L.C., No.
14-08-00352-CV, 2009 WL 1795037, at *4–5 (Tex. App.—Houston [14th Dist.]
14 June 25, 2009, no pet.) (mem. op.). There, our sister court in Houston distinguished
Inwood and held that a condominium association’s declaration created an assessment
lien only upon default of the monthly assessments, not on the declaration’s filing
date. See id. at *4–5. The Red Rock declaration provided:
All common monthly assessments and special assessments assessed but unpaid by a Unit Owner for its share of Common Expenses chargeable to its respective Condominium Unit, including interest thereon at ten percent (10%) per annum, plus any attorney’s fees incurred by the Association in order to enforce compliance by any Owner with the terms of this Declaration, the By–Laws, Articles of Incorporation, or Rules and Regulations of the Association, shall constitute a lien on such Unit superior (prior) to all other liens and encumbrances . . . .
***
. . . Such lien for the Common Expenses shall attach from the date of the failure of payment of the assessment . . . .
Id. at *4 (emphasis in original). From this, the court concluded that the parties’ “clear
and explicit intention . . . [was] that the act of nonpayment gives rise to an
assessment lien; nothing . . . in the [d]eclaration suggest[s] that an assessment lien
relates back to a previously recorded document or the date on which the [d]eclaration
was signed or recorded.” Id.
As in Inwood and Red Rock, we look to the Association’s Declaration to
determine when the assessment lien attached here. Section 4.01 of the Declaration—
“Creation of the Lien and Personal Obligation for Assessments”—provides in
pertinent part:
15 The regular annual assessments, special assessments, and default assessments, together with such interest thereon and costs of collection thereof as hereinafter provided . . . shall be a charge and continuing lien upon each Lot against which each such Assessment is made. Each such Assessment, together with such interest thereon and costs of collection thereof, as hereinafter provided, shall also be the continuing personal obligation of the person who was the Owner of such Lot at the time when the Assessment became due. The annual assessments shall be payable as provided in this Article IV.
(Emphasis added.)
The clear intent expressed in section 4.01 is for the assessment lien to attach
on the date of the Declaration and continue with the land, as in Inwood. Beyond the
emphasized language stating plainly that assessments “shall be a charge and
continuing lien upon each Lot,” we are persuaded of this meaning by the alternative
timing mechanism supplied in the next sentence for the personal obligation created
by assessments. That sentence provides that assessments will be “the continuing
personal obligation of the person who was the owner at the time when the
Assessment became due,” and thus distinguishes between obligations that arise
when assessments are due and those that run with the land. Garza’s assertion that a
new lien is created each year when assessments become due conflates the creation
of the assessment lien with the existence of a delinquency and the way the
Association may enforce the lien in the event of a delinquency.
In sum, we conclude that, under section 4.01, the filing of the Declaration in
1996 gave rise to assessment liens that run with the land, as in Inwood. Thus, the
16 summary-judgment record conclusively establishes that the Association’s
first-in-time assessment lien was senior to Garza’s later-in-time judgment lien. And
Garza’s claim of superior title premised on the seniority of its judgment lien fails as
a matter of law. We therefore hold that the trial court did not err by denying Garza’s
summary-judgment motion on its trespass to trial title action or by dismissing that
action on Durango and HReal’s motion.
Right of Redemption
We next consider Garza’s contention that the trial court erred by concluding
that it did not have a redeem the Property from Durango and HReal.
Garza seeks to exercise the statutory right of redemption in Chapter 209 of the
Property Code. See TEX. PROP. CODE §§ 209.001–.017. Chapter 209 includes certain
rights and protections for properties subject to mandatory property owners’
associations, including requirements for notice and a right to redeem property after
a foreclosure sale. See id. §§ 209.010, .011. Relevant here,
A property owners’ association that conducts a foreclosure sale of an owner’s lot must send to the lot owner and to each lienholder of record, not later than the 30th day after the date of the foreclosure sale, a written notice stating the date and time the sale occurred and informing the lot owner and each lienholder of record of the right of the lot owner and lienholder to redeem the property under Section 209.011.
See id. § 209.010. Under section 209.011, “[t]he owner of property in a residential
subdivision or a lienholder of record may redeem the property from any purchaser
at a sale foreclosing a property owners’ association’s assessment lien” within 180
17 days after the section 209.010 notice by paying the redemption amount. Id.
§ 209.011(b), (e).
Because a party’s right to redeem a property under Chapter 209 depends on
the interest the party held with respect to the property, we must determine whether
Garza may be considered the Property’s owner or a lienholder of record. “It has long
been the practice in Texas to liberally construe redemption statutes in favor of
redemption.” Laguan v. Lloyd, 493 S.W.3d 720, 723 (Tex. App.—Houston [1st
Dist.] 2016, no pet.); see also Khyber Holdings, LLC v. HSBC Bank USA, Nat’l
Ass’n, No. 05-12-01212-CV, 2014 WL 1018195, at *3 (Tex. App.—Dallas Mar. 15,
2014, no pet.) (mem. op.) (“We construe redemption statutes liberally in favor of the
right of redemption.”); Gonzalez v. Razi, 338 S.W.3d 167, 170 (Tex. App.—Houston
[1st Dist.] 2011, pet. denied) (“[I]t has been the practice in Texas since at least 1909
to liberally construe redemption statutes in favor of redemption.”).
Garza argues that it may be considered the Property’s owner under Chapter
209 because it “succeeded to [ALS’s] statutory right of redemption.” According to
Garza, “[t]he right of redemption is not personal to the owner at the time of the
[assessment lien foreclosure] sale.” Instead, it acquired ALS’s redemption right
when it acquired “all of the right, title, and interest owned by [ALS] in the
[P]roperty” at the constable’s sale and then tried to exercise that right during the
redemption period. In other words, Garza claims to have stepped into ALS’s shoes
18 for the purpose of redeeming the Property, and its ownership contention depends on
the transferability of ALS’s redemption right.
In support, Garza cites St. Andrews Investment Co. v. Valdez, a case
determining who may be considered a property’s “owner” for the purpose of
redeeming property sold at a tax sale. See No. 14-19-00781-CV, 2021 WL 330122,
at *1, 3–4 (Tex. App.—Houston [14th Dist.] Feb. 2, 2021, pet. denied) (mem. op.).
In St. Andrews, a taxing authority sued Raymond Sturgeon for delinquent taxes owed
on Sturgeon’s homestead. St. Andrews, 2021 WL 330122, at *1. Valdez purchased
the property at a tax foreclosure sale. Id. Under section 34.21 of the Texas Tax Code,
the owner of real property used as a homestead that is sold at a tax sale to a purchaser
other than a taxing unit may redeem the property on or before the second anniversary
of the date on which the purchaser’s deed is filed for record by paying the purchaser
a prescribed amount of money. TEX. TAX CODE § 34.21(a). But Sturgeon died during
the two-year redemption period, and his heirs transferred their property redemption
rights to St. Andrews Investment Company, which promptly exercised the right of
redemption. St. Andrews, 2021 WL 330122, at *1. Valdez sued St. Andrews for
declaratory judgment and moved for summary judgment, asserting that St. Andrews
was not the property “owner” and for that reason lacked the right to redeem the
property. Id. The trial court granted Valdez’s motion, and the appellate court
reversed. Id. at *4–5.
19 As noted by the appellate court, the Tax Code does not define an “owner” for
the purpose of exercising the right to redeem property. Compare TEX. TAX CODE
§ 34.21, with TEX. PROP. CODE § 209.002(6). So the court looked to the word’s
ordinary meaning and concluded that ownership means “‘[t]he bundle of rights
allowing one to use, manage, and enjoy property, including the right to convey it to
others. . . . Ownership rights are general, permanent, and heritable.’” St. Andrews,
2021 WL 330122, at *4 (quoting Owner, Ownership, BLACK’S LAW DICTIONARY
(11th ed. 2019)). Applying this definition, the court observed there was no dispute
that Sturgeon owned property when it was sold at the tax sale and that he had two
years after Valdez’s tax sale deed was recorded to redeem the property under section
34.21. Id.; see also TEX. TAX CODE § 34.21(a). When Sturgeon died within the
two-year period, his right of redemption passed to his heirs. St. Andrews, 2021 WL
330122, at *4. On the heirs’ assignment of their redemption right, the court held:
The right of redemption was not restricted to the heirs alone, and they were free to pass the right to their assign or their grantee, which they did, also within the two-year redemption period. . . . By virtue of the [heirs’] assignment, St. Andrews stepped into the heirs’ shoes and acquired their right of redemption.
Id. at *4–5 (internal citations omitted).
By its holding, the court rejected Valdez’s contention that only a person who
“had title to the property” on certain operative dates set out in the statute may be
considered the “owner” entitled to redeem the property. Id. at *4–5. The court stated:
20 “The right of redemption ‘is not personal to the owner at the time of the tax sale.’”
Id. at *3 (quoting McGuire v. Bond, 271 S.W.2d 508, 511 (Tex. App.—El Paso 1954,
writ ref’d n.r.e.). It is actually “a ‘statutory privilege,’ which may be passed from the
owner to an heir by deed or will.” Id. (quoting McGuire, 271 S.W.3d at 511). Even
though St. Andrews did not hold title to the property on the operative dates, it
obtained a valid right of redemption from the heirs of the person who did. Id. at *4–
5. Thus, the summary-judgment record did not conclusively establish that St.
Andrews had no right to redeem the property. Id. at *5.
Although the redemption statute at issue in St. Andrews is different from the
redemption statute here, we find our sister court’s discussion instructive. Unlike in
the Tax Code, “owner” is a defined term in Chapter 209. See TEX. PROP. CODE
§ 209.002(6). It means “a person who holds record title to property in a residential
subdivision and includes the personal representative of a person who holds record
title to property in a residential subdivision.” Id. Where, as here, the Legislature
defines a statutory term, the courts must honor that meaning. See TEX. GOV’T CODE
§ 311.011(b) (“Words and phrases that have acquired a technical or particular
meaning, whether by legislative definition or otherwise, shall be construed
accordingly.”).
There is no dispute that ALS, like Sturgeon, was the Property’s owner at the
time of the assessment lien foreclosure sale. There is also no dispute that as the
21 Property’s owner, ALS had the right under Chapter 209 to redeem the Property from
Durango and HReal during the redemption period. See TEX. PROP. CODE
§ 209.011(b). The trustee’s deed conveying the Property to Durango and HReal
expressly states that it is subject to the right of redemption in Chapter 209. And
finally, there is no dispute that Garza obtained the constable’s deed conveying “all
of the right, title, and interest owned by [ALS] in the [P]roperty” when ALS still had
the right to redeem the Property. The question then is whether “all of the right, title,
and interest owned by [ALS] in the [P]roperty” included ALS’s right of redemption.
We conclude that it did.
Without attempting to distinguish St. Andrews or citing any authority,
Durango and HReal assert that the right to redeem the Property is a “personal right”
of the prior owner at the time of the assessment lien foreclosure sale. But no statutory
language compels that conclusion. While the definition of an owner is limited to
record title holders and the personal representatives of record title holders, see TEX.
PROP. CODE § 209.002(6), it does not prohibit an owner from passing its right to
redeem property to another. Nor does any other provision of Chapter 209.9 See id.
9 On this point, we note section 34.21 of the Tax Code—the redemption statute at issue in St. Andrews—has been amended to expressly provide that redemption rights are not transferrable. The change in law did not affect a transfer of a property owner’s right of redemption that occurred before the effective date of the legislative act, which was June 14, 2019. See Act of May 22, 2019, 86th Leg., R.S., ch. 1345, §§ 2–3. Because the transfer in St. Andrews occurred in 2018, the change in law did 22 §§ 209.001–.017. We therefore conclude that because the constable’s deed conveyed
to Garza all of ALS’s rights, title, and interest in the Property, Garza stepped into
ALS’s shoes and acquired its right of redemption.
We hold the trial court erred in granting summary judgment against Garza on
its claim seeking to redeem the Property. Durango and HReal did not conclusively
establish that Garza could not redeem the Property because it was not considered an
owner under the statute.10 Although Garza filed a cross-motion for summary
judgment seeking a determination that it redeemed the Property as a matter of law,
we do not make that holding because Garza’s compliance with the redemption
statute’s other requirements is not conclusively established. See, e.g., TEX. PROP.
CODE § 209.011(e).
Conspiracy
Finally, we consider Garza’s contention that the trial court erred by granting
summary judgment dismissing its claim that Durango and HReal conspired with
Hilal, Knezevic, and Campbell to chill bidding at the assessment lien foreclosure
sale and deprive Garza of its right to redeem the Property.
not apply. Chapter 209 does not contain any similar prohibition. See TEX. PROP. CODE § 209.011. 10 We do not decide whether Garza is also entitled to redeem the Property as a “lienholder of record” because it is unnecessary to do so. See TEX. R. APP. P. 47.1. 23 The defendants jointly moved for summary judgment on Garza’s conspiracy
claim on two grounds: (1) Garza should not be heard to complain about any
irregularities in the assessment lien foreclosure because it did not have a right to
redeem the Property under Chapter 209, and (2) Garza had not established that the
price Durango and HReal paid at the assessment lien foreclosure sale resulted from
bid chilling. Neither ground sustains the trial court’s summary judgment.
Our holding that Garza stepped into ALS’s shoes and acquired its right of
redemption precludes summary judgment on the first ground. As to the second
ground, we note the defendants moved for a traditional summary judgment, which
imposed on them the requirement to conclusively negate an element of Garza’s cause
of action before the burden shifted to Garza to raise a fact issue.11 See generally
Rollins v. Pressler, 623 S.W.3d 918, 924–25 (Tex. App.—Houston [1st Dist.] 2021,
pet. denied) (setting out well-established standard for traditional summary judgment
and recognizing that plaintiff does not have burden to come forward with evidence
raising fact issue on challenged claim before defendant carries its burden to
conclusively disprove at least one element of claim). An argument that Garza failed
11 The defendants did not argue below or on appeal that their summary judgment motion should be construed as a hybrid traditional and no-evidence motion. They acknowledge the motion as a traditional one.
24 to show a conspiracy among the defendants to chill the bidding at the assessment
lien foreclosure sale was not a proper basis for a traditional summary judgment.
Accordingly, the defendants have not presented a valid ground for summary
judgment on Garza’s conspiracy claim, and the trial court erred by granting their
motion on that claim.12 We express no opinion on the merits of Garza’s conspiracy
claim. Nor do we hold that Garza is entitled to judgment as a matter of law on the
claim, because Garza did not file a cross-motion seeking that relief.
Conclusion
For these reasons, we reverse the trial court’s summary judgment on Garza’s
claim seeking to redeem the Property and for conspiracy, and we remand for further
proceedings on those claims only. We affirm the remainder of the trial court’s
summary judgment.
Sarah Beth Landau Justice
Panel consists of Justices Kelly, Landau, and Farris.
12 We need not reach Garza’s complaint that the trial court erred by excluding certain exhibits from the summary judgment evidence given our holding that the summary judgment burden did not shift to Garza. See TEX. R. APP. P. 47.1. 25