Juan A. Hernandez II v. Gina Kay Johnson and Jay Wright

• Court: Court of Appeals of Texas
• Decided: July 11, 2019
• Docket: 09-17-00411-CV
• Status: Published

Opinion

In The

Court of Appeals Ninth District of Texas at Beaumont ____________________

NO. 09-17-00411-CV ____________________

JUAN A. HERNANDEZ II, Appellant

V.

GINA KAY JOHNSON AND JAY WRIGHT, Appellees

_______________________________________________________ ______________

On Appeal from the 284th District Court Montgomery County, Texas Trial Cause No. 17-03-03674-CV ________________________________________________________ _____________

MEMORANDUM OPINION

In this appeal, Juan A. Hernandez II argues the trial court erred by issuing a

judgment that declares his ex-spouse, Gina Johnson, has an owelty lien 1 on his

homestead. The judgment from which Hernandez appeals is based, in part, on the

1 “Owelty” is defined as “[e]quality as achieved by a compensatory sum of money given after an exchange of parcels of land having different values or after an unequal partition of real property.” BLACK’S LAW DICTIONARY 1214 (9th ed. 2009).

1 trial court’s rulings on the parties’ cross-motions for summary judgment. For the

following reasons, we affirm the judgment.

Background

Hernandez and Johnson married in March 2006. After marrying, they built a

home and a swimming pool on a lot located in Montgomery County Texas.

Hernandez’s parents gave him the lot, and it was his separate property when

Hernandez and Johnson decided to build their home there. To finance the work

needed to construct the improvements, Johnson and Hernandez obtained loans. They

ultimately converted the loans into a mortgage.2

In September 2016, after approximately ten years of marriage, Johnson and

Hernandez divorced. Ultimately, they resolved their disputes in the divorce through

an agreed decree. Under the agreed decree, the trial court confirmed the lot, which

is located on South Rayburn Drive, as Hernandez’s separate property. The agreed

decree, however, required Hernandez to give Johnson a promissory note for $20,000,

secured by an owelty lien burdening the lot.3 To comply with the terms in the agreed

2 The loan documents and the mortgage contain Hernandez’s and Johnson’s signatures. 3 The agreed decree, the $20,000 note, and the deed of trust are included in the summary judgment evidence the trial court considered when resolving the issues addressed in the motions. 2 decree, Hernandez gave Johnson a $20,000 promissory note. To secure the

obligations that Hernandez owed Johnson under the note, he also gave Johnson a

deed of trust. The deed of trust identifies the property as the lot on South Rayburn

Drive. The deed of trust names Johnson as the beneficiary of the trust, and it gave

the trustee the right to sell the property on South Rayburn Drive if Hernandez

defaulted on his note.

Hernandez used the property on South Rayburn Drive to secure his obligation

to pay the note. The terms of the note allowed Johnson to accelerate Hernandez’s

debt if he failed to make the payments required by the terms of the note. One of the

provisions in the deed of trust states: “This deed of trust is given to impose an owelty

of partition against the entirety of [the tract identified as lot six] in order to comply

with the [agreed decree.]” Another provision in the deed of trust gave Johnson the

right to foreclose her owelty lien if Hernandez defaulted on the note.4

In March 2017, Johnson notified Hernandez that he had defaulted on his note

and of her intent to accelerate the debt and foreclose. Seeking to stop the foreclosure,

Hernandez sued Johnson and the attorney who represented Johnson in her divorce,

Jay Wright. In his petition, Hernandez asked that the court grant injunctive and

4 See Tex. Prop. Code Ann. § 51.002 (West Supp. 2018) (authorizing the nonjudicial sale of real property after default under powers granted in a deed of trust). 3 declaratory relief based on his argument that Johnson’s deed of trust did “not create

a valid lien on [his] homestead[.]” 5 In response, Johnson filed a general denial and

a counterclaim, alleging she was entitled to have the trial court render a judgment

declaring that she had the right to foreclose on Hernandez’s property under the

express terms in the agreements used to create the owelty lien on Hernandez’s

property on South Rayburn Drive.

According to the court’s docket sheet, in April 2017, Hernandez’s attorney

appeared in court and announced he was dismissing Hernandez’s claims against Jay

Wright. About three weeks later, Johnson filed a traditional motion for summary

judgment on Hernandez’s claims. In her motion, Johnson alleged that Hernandez

had agreed to stipulate that he was in default on the $20,000 promissory note.

Johnson asked the trial court to declare she has the right to foreclose on the note even

though Hernandez was asserting homestead rights to the property on South Rayburn

Drive. She also asked that the trial court dismiss Hernandez’s claim against her with

prejudice, and that it grant her counterclaim seeking to recover attorney’s fees.

In May 2017, Hernandez filed a motion for summary judgment on his claims

against Johnson. In Hernandez’s motion, he asked the trial court to declare the

5 See Tex. Const. art. XVI, § 50(c).

4 owelty lien and deed of trust invalid. According to Hernandez’s motion, the language

the parties used in the agreed decree when they divorced failed to create a valid

owelty lien on his homestead.

In June 2017, the trial court denied Hernandez’s motion for summary

judgment. Then, during a hearing on Johnson’s motion for summary judgment in

July 2017, the trial court advised the parties that Johnson’s motion for summary

judgment would be granted in part and denied in part. In August 2017, the trial court

signed a judgment declaring Hernandez in default on his note. The judgment also

declares that Johnson has a valid, enforceable owelty lien on the property on South

Rayburn Drive and that his property is subject to foreclosure based on Johnson’s

“Owelty Deed of Trust Lien.” Although Johnson prevailed on her declaratory

judgment claims, the trial court denied her request for attorney’s fees. The judgment

then states the trial court was denying “all other relief” and the judgment is final and

could be appealed. 6

6 Neither Hernandez, nor Johnson, complain the trial court’s judgment did not dispose of all the claims. We note, however, that Hernandez’s pleadings include a claim for wrongful foreclosure based on Johnson’s alleged failure to give him sufficient notice that she was accelerating his note. We further note that the wrongful foreclosure claim is not addressed by Johnson’s motion for summary judgment. Nevertheless, the judgment denied Hernandez relief on all his claims, not just those addressed by Johnson’s motion for summary judgment. Here, the judgment includes language of finality, making the trial court’s judgment final despite the fact the judge ruled on a claim not addressed by Johnson’s motion. See Lehmann v. Har-Con 5 On appeal, Hernandez argues that he signed the note and deed of trust solely

so the court that handled his divorce could affect a just and equitable division of his

and Johnson’s marital estate. He claims the court handling his divorce did not have

the right to create an owelty lien burdening his separate property because it has

always been his homestead. According to Hernandez, the district court handling the

case that is the subject of this appeal committed error when it concluded the language

in the agreed decree had effectively created a valid owelty lien on his home. He

contends the term “owelty lien,” as used in the agreed decree, was misused because

the lot is now and was at the time of the divorce his separate property. Hernandez

concludes the trial court should have granted his motion, declared the lien invalid,

and denied the motion Johnson filed.

In response to these arguments, Johnson contends Hernandez should not be

allowed to collaterally attack the language in the agreed decree. She also claims the

summary-judgment evidence authorized the trial court to declare the owelty lien is

valid because the summary-judgment evidence established the home and pool were

Corp., 39 S.W.3d 191, 200 (Tex. 2001) (explaining that “[a] judgment that grants more relief than a party is entitled to is subject to reversal, but it is not, for that reason alone, interlocutory”). Hernandez has not complained the trial court granted relief on a claim not included in Johnson’s motion for summary judgment. 6 built on the property with community funds. 7 Johnson points to the language in the

agreed decree, the $20,000 note, and the deed of trust to support her arguments that

the evidence proved the court handling the divorce required Hernandez to sign the

note to settle the reimbursement claims she made in the divorce. Johnson concludes

the summary-judgment evidence authorized the trial court to grant her motion and

issue a judgment declaring she has a valid and enforceable owelty lien against the

Standard of Review

The issue in this appeal is whether Johnson established, as matter of law, that

she has a valid owelty lien against the property on South Rayburn Drive. Under

7 The trial court considered the following evidence when it ruled on the motions: (1) Hernandez’s original petition; (2) Johnson’s original answer and motion for declaratory judgment; (3) two affidavits signed by Hernandez; (4) an affidavit signed by Johnson; (5) the final divorce decree; (6) the promissory note that Hernandez gave Johnson evidencing a debt of $20,000; (7) the deed of trust securing owelty lien; (8) the deed of trust that Johnson and Hernandez signed in 2006 in connection with a mortgage they obtained from a bank to finance their home; (9) an affidavit of commencement, reflecting that in 2006, a contractor began building the house; (10) a deed of trust, signed by Hernandez and Johnson in 2008, to extend and renew a note they owed for improvements constructed on Hernandez’s lot; (11) a contract for improvements and deed of trust, signed by Hernandez and Johnson in 2011 to build a pool on Hernandez’s lot; (12) an affidavit from Johnson’s attorney, which addressed the attorney’s fees that Johnson incurred in the case; and (13) an affidavit from Hernandez’s attorney, which addressed the attorney’s fees that Hernandez incurred in the case.

7 Texas law, “[d]eclaratory judgments decided by summary judgment are reviewed

under the same standards of review that govern summary judgments generally.” 8 A

trial court’s decision to grant or deny a motion for summary judgment is reviewed

on appeal using a de novo standard of review.9 When conducting our review, we

consider the same evidence the trial court considered when it ruled on the motions.10

To prevail on her motion, Johnson had the burden to prove, as a matter of law, each

element of her claim that she has a valid, enforceable owelty lien. 11 In our review,

we examine that evidence “‘in the light most favorable to the nonmovant, indulging

every reasonable inference and resolving any doubts against the motion.’” 12 If

Johnson met her burden, the burden of production shifted to Hernandez to produce

8 Cadle Co. v. Bray, 264 S.W.3d 205, 210 (Tex. App.—Houston [1st Dist.] 2008, pet. denied); see Tex. Civ. Prac. & Rem. Code Ann. § 37.010 (West 2015). 9 Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). 10 See Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833 (Tex. 2018). 11 See Tex. R. Civ. P. 166a(c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). 12 Pasko, 544 S.W.3d at 833 (quoting City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005)).

8 enough evidence to establish that a genuine issue of material fact existed on at least

one of the elements of Johnson’s claims. 13

In his brief, Hernandez argues the summary-judgment evidence supporting

his motion required the trial court to grant it. In reviewing the ruling denying

Hernandez’s motion, we review the summary-judgment evidence in a light that

favors her claims and resolve all doubts about the evidence in her favor. 14 Here, the

trial court’s judgment fails to specify the grounds on which it reached its

conclusions. Nevertheless, we will affirm the judgment if any of the theories

presented by the parties in their motions authorized the trial court to decide the

motions in a manner consistent with the judgment the trial court rendered. 15

Analysis

Hernandez raises two issues in his brief. For convenience, we address

Hernandez’s second issue before addressing the arguments he raises in issue one. In

issue two, Hernandez argues Johnson was not entitled to summary judgment based

13 See Chavez v. Kan. City S. Ry. Co., 520 S.W.3d 898, 900, 901 (Tex. 2017). 14 See Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018) (citing Randall’s Food Markets, Inc. v. Johnson, 892 S.W.2d 640, 644 (Tex. 1955)). 15 See Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d 39, 45 (Tex. 2017).

9 on the undisputed facts presented to the trial court. He also argues the trial court

should have granted his motion for summary judgment based on the evidence the

trial court considered when it ruled.

To meet her burden of proof, Johnson was required to establish that no

genuine issues of material fact existed for a trier of fact on her claim that she has a

valid owelty lien.16 In this case, the main summary-judgment evidence explaining

why the trial court handling Hernandez’s and Johnson’s divorce required Hernandez

to sign the $20,000 note consists of Johnson’s affidavit and the agreed decree. 17 The

agreed decree was entitled to a presumption of validity, as it became final in 2016.

For that reason, the trial court was required to consider the terms in the decree when

deciding whether the lien was valid.18 The agreed decree describes the lien created

in the divorce as an owelty lien. The other primary source of evidence that explains

16 Tex. R. Civ. P. 166a(c); Knott, 128 S.W.3d at 215-16. 17 Hernandez attached the agreed decree to his motion, but in an appeal arising from cross-motions for summary judgment, we review the evidence based on all the evidence the trial court had before it when it decided the motions. 18 See White v. White, 179 S.W.2d 503, 505 (Tex. 1944) (“Where a court of record, having general jurisdiction, assumes to exercise its jurisdiction in a given case, all presumptions are in favor of the validity of its proceedings; and if the record shows that the steps necessary to clothe it with power to act were taken, or if the record be silent on this subject, then its judgment must be held conclusive in any other court of the same sovereignty when collaterally called into question.”).

10 why the trial court handling the divorce would have required Hernandez to sign a

note is in Johnson’s affidavit: She stated that Hernandez “agreed to repay me

$20,000.00 for my community property interest in the marital homestead.”

The agreed decree and Johnson’s affidavit shifted the burden of proof to

Hernandez to establish that the debt created by the $20,000 note was unrelated to

Johnson’s reimbursement claim. While Johnson filed affidavits, his affidavits never

addressed the purpose of the note.

Because there is evidence in the record showing that the claims in the divorce

included a claim for reimbursement, that court was authorized to enforce the owelty

lien against the property on South Rayburn Drive.19 Generally, Article XVI, section

50 of the Texas Constitution protects individuals from being forced to sell a

homestead, but the section has many exceptions.20 One of the exceptions is for “an

owelty of partition imposed against the entirety of the property by a court order or

by a written agreement of the parties to the partition, including a debt of one spouse

in favor of the other spouse resulting from a division or an award of a family

19 See Heggen v. Pemelton, 836 S.W.2d 145, 146 (Tex. 1992) (citing Tex. Const. art. XVI, § 50). 20 Tex. Const. art. XVI, § 50.

11 homestead in a divorce proceeding[.]” 21 That exception applies under the

circumstances that were shown here.

In conclusion, the only evidence before the trial court established that

Hernandez signed the note based on Johnson’s claim for reimbursement, which

resulted when Johnson and Hernandez used community funds to pay to build a home

and pool on the lot. Thus, Texas law allowed the court handling Hernandez’s divorce

to impose an owelty lien on the lot even though it is Hernandez’s homestead.22

Conclusion

We hold the trial court was authorized to grant Johnson’s motion for summary

judgment. We further conclude the trial court did not err by denying Hernandez’s

motion. We overrule issue two. Given our resolution of that issue, we need not reach

Hernandez’s remaining issue since resolving his arguments about it are not

necessary to our resolution of his appeal. 23 For the reasons explained above, the trial

court’s judgment is affirmed.

AFFIRMED.

21 Id. art. XVI, § 50(3). 22 See Heggen, 836 S.W.2d at 146. 23 See Tex. R. App. P. 47.1. 12 _________________________ HOLLIS HORTON Justice

Submitted on September 12, 2018 Opinion Delivered July 11, 2019

Before McKeithen, C.J., Horton and Johnson, JJ.