McCarty v. Montgomery

290 S.W.3d 525, 2009 WL 1636901
CourtCourt of Appeals of Texas
DecidedJuly 7, 2009
Docket11-07-00317-CV
StatusPublished
Cited by9 cases

This text of 290 S.W.3d 525 (McCarty v. Montgomery) 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
McCarty v. Montgomery, 290 S.W.3d 525, 2009 WL 1636901 (Tex. Ct. App. 2009).

Opinion

OPINION

RICK STRANGE, Justice.

This is a real estate contract dispute. Clinton T. Montgomery, as managing trustee of the Trimont Irrevocable Trusts (Trimont), sued Annette McCarty seeking specific performance. 1 McCarty responded with a counterclaim against Trimont and a third-party claim against Elton Montgomery alleging breach of contract and tort claims. The trial court granted Trimont’s and Elton Montgomery’s motions for summary judgment and subsequently entered a final judgment in their favor. We affirm.

I. Background Facts

McCarty agreed to sell to Elton Montgomery an undivided one-half interest in a 950.3-acre tract in Palo Pinto County for $200,000. The parties utilized a Texas Real Estate Commission form, TREC No. 25-4, to document their agreement. 2 Montgomery deposited $2,500 in earnest money with Palo Pinto County Abstract Company and assigned the contract to Trimont and Ray Herring. Herring subsequently assigned his interest to Trimont. *530 For convenience, we will refer to Montgomery rather than Trimont as the contracting party.

The contract required McCarty to furnish Montgomery with a title policy. That title policy was allowed certain enumerated exceptions. 3 McCarty was also required to furnish a commitment for title insurance, legible copies of restrictive covenants, and documents evidencing exceptions in the commitment. While preparing a commitment, Palo Pinto County Abstract discovered that a federal tax lien burdened the property. The lien arose because McCarty’s estranged husband failed to pay income taxes after their separation in 1995. McCarty knew that the IRS had filed tax liens on their Brownwood home, but she did not know that it had filed a lien on her Palo Pinto County property. The lien was dated November 5, 1997. As of that date, the unpaid balance was $28,676.60, but the lien had grown to approximately $50,000 when discovered by Palo Pinto County Abstract.

McCarty’s real estate agent, Blake Hor-tenstine, asked Palo Pinto County Abstract to wait on the title commitment until McCarty determined what steps could be taken with regard to the lien. Hortenstine also informed Montgomery about the lien and the need for additional time. Montgomery filed an affidavit in the real property records of Palo Pinto County. The affidavit included a copy of the contract and indicated Montgomery’s belief that he had the right to insist upon specific performance and his intention to do so. McCarty asserted that she did not owe the underlying taxes and that, because the land was her separate property, it was not subject to the lien. McCarty also lacked the funds to pay the taxes and would not receive enough money from the sale of the property to pay them. There were some discussions about renegotiating the contract so that McCarty could pay the lien at closing, but she was adamant in her refusal to do so. During her deposition, McCarty testified that, even if Montgomery had offered her one million dollars, she would not have paid the lien. Hortenstine informed Palo Pinto County Abstract that McCarty would not pay the lien. Palo Pinto County Abstract’s owner, Neal Grantham, understood that it would not be paid for issuing a title commitment and, therefore, one was not issued.

Hortenstine forwarded Montgomery a letter from McCarty in which she stated: “I need to terminate the contract because of the situation with the IRS lien that currently clouds the title.” Hortenstine also furnished a signed release allowing Palo Pinto County Abstract to return Montgomery’s earnest money deposit. Montgomery took issue with McCarty’s letter and advised her that the refusal to discharge the tax lien was “altogether unacceptable.” He rejected the offer to return the escrow money and insisted upon proceeding to closing. McCarty offered to close with the lien in place, but Montgomery refused.

*531 McCarty subsequently executed an oil and gas lease with R.M. Hill Operating, Inc. This lease covered a portion of the property that she had earlier contracted to sell to Montgomery. When Montgomery learned of this, he contacted her directly and accused her of criminal misconduct. McCarty alleges that she later met with Montgomery and his attorney at a restaurant and that they lied to her to obtain her signature on an affidavit. McCarty alleges that Montgomery and his counsel promised her that they would take the affidavit to Hill Operating and try to convince it to pay the lien and that, if that failed, they would hire someone to work on her behalf to see what could be done. McCarty signed the affidavit. That affidavit states that, prior to signing a lease with Hill Operating, she advised them that Montgomery had the right to move forward with the purchase of the land and minerals. McCarty testified at her deposition that she understood this meant that Montgomery had the right to move forward at the time he signed the contract and that she did not realize she was being asked to sign an affidavit stating that he still had the right to move forward.

McCarty filed a motion for partial summary judgment arguing that she had no liability to Trimont under the real estate contract. Trimont filed a motion for summary judgment seeking specific performance, and Trimont and Montgomery filed a traditional and no-evidence motion for summary judgment attacking McCarty’s affirmative claims. The trial court granted Trimont’s and Montgomery’s motions, including Trimont’s request for specific performance, and denied McCarty’s motion. The order provided that a separate hearing would be held to determine the manner of specific performance. McCarty filed for bankruptcy. The bankruptcy court lifted the stay to allow the continuation of this litigation. The trial court held an evidentiary hearing and awarded Trimont and Montgomery attorney’s fees of $85,520.50 and conditional attorney’s fees in the event of an appeal. The court ordered the sale to proceed — except that the sales price of $200,000 would now be paid in cash (the original contract included seller financing), and the court provided a mechanism for the payment and release of the tax lien out of the sales proceeds.

II. Issues

McCarty alleges that the trial court erred when it granted Trimont’s motion for summary judgment seeking specific performance, that it erred when it failed to grant her motion for partial summary judgment, and that it erred when it granted Trimont and Montgomery’s motion for summary judgment on her affirmative claims.

III. Analysis

A. Standard of Review.

1. Traditional Motions for Summary Judgment.

The standard of review for traditional motions for summary judgment is well settled. Questions of law are reviewed de novo. St. Paul Ins. Co. v. Tex. Dep’t of Transp., 999 S.W.2d 881, 884 (Tex.App.-Austin 1999, pet. denied).

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Bluebook (online)
290 S.W.3d 525, 2009 WL 1636901, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccarty-v-montgomery-texapp-2009.