Howard Rosenstein v. Patricia Condron

Court of Appeals of Texas·Decided January 11, 2024·No. 02-23-00098-CV·Published

Opinion

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-23-00098-CV ___________________________

HOWARD ROSENSTEIN, Appellant

V.

PATRICIA CONDRON, Appellee

On Appeal from the 271st District Court Wise County, Texas Trial Court No. CV21-07-515

Before Bassel, Wallach, and Walker, JJ. Memorandum Opinion by Justice Walker MEMORANDUM OPINION

Appellant Howard Rosenstein appeals from the trial court’s final judgment for

Appellee Patricia Condron, which ordered that title to certain real property located in

Wise County had vested in Patricia. Rosenstein claimed that he had been deeded the

property by Patricia’s now-deceased husband, Jimmy Condron, in exchange for

Rosenstein’s representing Jimmy in a criminal matter in 2009. After a bench trial, the

trial court found, among other things, that the deed was intended as a security

instrument used to secure Jimmy’s payment for those legal services rather than as a

conveyance to Rosenstein. Rosenstein raises four issues on appeal: (1) the evidence

was insufficient to support the trial court’s finding that the deed was intended to be a

security instrument, (2) the evidence was insufficient to support the attorney’s-fee

award, (3) the trial court erred when it concluded that Patricia’s claims were not

barred by the statute of limitations, and (4) the trial court erred when it concluded that

Patricia had standing to bring her suit to quiet title. We will reverse the trial court’s

award of attorney’s fees, remand on that issue only, and affirm the remainder of the

trial court’s judgment.

I. BACKGROUND

A. FACTUAL BACKGROUND

In 2009, Jimmy hired Rosenstein to represent him in a felony sexual assault

case. In the engagement contract (Contract), Jimmy agreed to pay Rosenstein a

minimum $22,500 nonrefundable retainer for pretrial representation. But the

2 Contract also provided that, “[d]ue to the fact that [Jimmy did] not have money for a

retainer, the fee for such representation and retainer [was] agreed to consist of a

transfer of [Jimmy’s] property,” described as 4.5 acres in Wise County (Property).1

The Contract continued:

By virtue of this contract for legal services and property transfer, client hereby (Jimmy Condron) conveys to Howard Rosenstein all of his interest in the [Property] for consideration of attorney representation as of 8/25/09 on Jimmy Condron’s sexual assault case.

....

[Jimmy] acknowledges he has carefully read this agreement and property transfer and fully agrees to abide by it and fully agrees to sign any additional documents to effectuate the transfer. [Jimmy] agrees to let attorney sign client’s name to any document to effectuate the transfer of the [Property]. For the pendency of the case, [Rosenstein] agrees to let [Jimmy] continue to live in his mobile home and pay on the [P]roperty the monthly mortgage.

The Contract further provided that “this representation and agreement for cash

and/or property” did not include any expenses (e.g. for travel, court costs, experts) or

any trial or posttrial representation. Jimmy would be responsible for paying such

expenses as they were incurred and for paying an additional $30,000 for Rosenstein to

represent him at a trial.

Jimmy’s felony case was dismissed on September 21, 2009, four weeks after he

hired Rosenstein, though Rosenstein did not inform Jimmy that the case had been

Jimmy had bought the Property in 2003 for $60,000 using a loan serviced at all 1

relevant times by Wells Fargo.

3 dismissed until October 2. On September 30, 2009, Jimmy signed a special warranty

deed granting the Property to Rosenstein (Deed). That same day, Jimmy (as lessee)

and Rosenstein (as lessor) also entered into a five-year lease agreement for the

Property (Lease). The Lease automatically renewed each year for a new one-year term

if not terminated by either party. Jimmy agreed to pay Rosenstein $643.63 per month,

which could be adjusted “from time-to-time to ensure that the rent payable by [Jimmy

was] sufficient to fully service the loan owed” by Jimmy on the Property. The Deed

was not recorded at that time.

Jimmy met Patricia in 2010, and they married in 2015. Jimmy and Patricia

claimed the Property as their homestead and shared expenses associated with the

Property, and Jimmy made the mortgage payments directly to Wells Fargo. However,

Jimmy also—at least during the years of 2009 and 2010—reported to Rosenstein that

the mortgage payments had been made by mailing Rosenstein copies of the mortgage

checks Jimmy had paid to Wells Fargo and copies of his monthly mortgage statements

from the bank.

Jimmy died in June 2020 and his will was admitted to probate as a muniment of

title, with Patricia as his sole beneficiary.2 Patricia then paid off the remaining $40,000

on the Wells Fargo loan and obtained a release of that lien. She also had the

manufactured home on the Property titled in her name and declared as real property.

2 Jimmy’s will provided that Patricia would receive his entire estate upon his death, to include all of his “real, personal[,] or mixed” property.

4 On April 15, 2021, Rosenstein finally recorded the Deed.

At trial, Patricia testified that she did not know that Rosenstein existed or about

his claim to the Property until he recorded the Deed in 2021. She explained that, after

learning of Rosenstein’s claim to the Property, she searched through Jimmy’s personal

records but did not find any evidence of the Deed, Lease, or any other agreement

between Rosenstein and Jimmy.

According to Rosenstein, his legal services arrangement with Jimmy was

premised on the understanding that Jimmy’s 2009 felony case would be Rosenstein’s

highest priority to ensure its speedy resolution. Rosenstein testified that, after the

Deed and Lease were signed in 2009, he had never been to the Property or performed

any actions in his role as purported landlord under the Lease. He admitted that he

had never paid ad valorem taxes or obtained insurance for the Property and had never

reported any rental income or otherwise claimed the Property for tax purposes. It

was not until after Jimmy died that Rosenstein learned that Jimmy and Patricia had

married. Rosenstein asserted that Jimmy had not paid “a dime” for his legal

representation and that he had never advanced Jimmy money, agreed to give the

property back to Jimmy, or given Jimmy a repurchase option. He explained that

Jimmy had asked him not to record the Deed in 2009 because doing so might have

“mess[ed] up [Jimmy’s] mortgage veteran VA thing that [he] got with Wells Fargo or

whatever the name of that company is.”

5 B. PROCEDURAL BACKGROUND

Patricia sued Rosenstein for declaratory judgment and asserted causes of action

for pretended sale of a homestead, violation of the TDTPA, innocent grantee for

value without notice, unjust enrichment, and estoppel. She requested the trial court to

quiet title in her name and to declare the Deed void. Rosenstein answered, raising

affirmative defenses of statute of limitations, laches, and lack of standing. He did not

file a counterclaim.

After a bench trial, the trial court declared that the Deed was “a security

instrument securing payment for” Rosenstein’s legal services rather than a conveyance

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