Pete Snodgrass v. Cedyco, Corp.

• Court: Court of Appeals of Texas
• Decided: April 10, 2008
• Docket: 01-07-00701-CV
• Status: Published

Opinion

Opinion issued April 10, 2008

In The

Court of Appeals

For The

First District of Texas

NO. 01-07-00701-CV

__________

PETE SNODGRASS, Appellant

V.

CEDYCO CORPORATION, Appellee

On Appeal from the 270th District Court

Harris County, Texas

Trial Court Cause No. 2006-11101

MEMORANDUM OPINION

Appellant, Pete Snodgrass, challenges the trial court's take-nothing judgment rendered after a bench trial in favor of appellee, Cedyco Corporation ("Cedyco"), in his suit against Cedyco for fraud and violations of the federal Fair Debt Collection Practices Act (FDCPA). ⁽¹⁾ In three issues, appellant contends that the trial court erroneously concluded that the sale of his real property "was noticed pursuant to a valid order," the trial court erroneously concluded that he "bargained for and received all of [Cedyco's] right, title, and interest in and to the underlying judgment," and "the trial court should have made conclusions regarding [Cedyco's] fraud and unfair debt collection practices as a matter of law."

We affirm.

Factual and Procedural Background

In his original petition, appellant alleged that on September 22, 1986, Sakowitz, Inc. obtained a judgment for $12,818.75 plus interest against his brother, Michael Snodgrass, for an unpaid consumer debt. On November 18, 1986, Sakowitz filed an abstract of judgment against real property owned by Michael, but it "did not file for execution on this judgment at any time." Subsequently, on September 5, 1991, Michael deeded the property to his father, AC Snodgrass, who, on November 22, 1993, deeded the property to appellant. On August 19, 1996, Cedyco received by assignment rights to the judgment against Michael and, on March 31, 1997, it filed an abstract of judgment against Michael based on the 1986 judgment. On January 5, 2004, Cedyco "moved the [county] court to order . . . the sale of the property," which it did on February 2, 2004. Appellant learned on February 22, 2004, that the property, which was his home, was scheduled for sale, and, on February 28, 2004, Michael filed a verified emergency motion for new trial to set aside the order of sale. On March 2, 2004, although appellant paid $14,000 to Cedyco, "Cedyco had actual and constructive notice that it did not have any right to execute the judgment against [appellant's] home."

In support of his claims, appellant alleged that Cedyco "fraudulently misrepresented and concealed material facts," "misrepresented the state of the title of the real property and improvements," and "threatened to take legal action that it did not have a legal right to take."

Cedyco filed an original answer and counterclaim, in which it asserted that, on March 1, 2004, it entered into an agreement with appellant to assign him the judgment against Michael and set aside the order authorizing the sale of the property. Cedyco attached to its answer the assignment of judgment, which stated that Cedyco, in consideration for appellant's payment of $14,000, sold and assigned him the judgment against Michael. ⁽²⁾ The assignment of judgment further provided,

Assignor [Cedyco] represents that it is the present one hundred percent (100%) legal and equitable owner and holder of the Assigned Judgment and the liens securing it, if any, that Assignor will not collect any further money in satisfaction of the Assigned Judgment or any part thereof, and that Assignor will not release or discharge the Assigned Judgment. Except for the representations and warranties made in the immediately preceding sentence, this Assignment is made without recourse of any kind or character to Assignor for any purpose or to any extent whatsoever, is made without representation or warranty of any kind or character, including but not limited to any representation or warranty regarding the validity of the Assigned Judgment or any liens securing it. Assignor does not guarantee in any way payment or collection of the Assigned Judgment, and in the event of nonpayment of the Assigned Judgment, there will be no recourse against the assignor.

(Emphasis added).

At the bench trial, appellant testified that he had lived in the property since 1993 after he bought it from his father, and he introduced the deed to the property into evidence. Appellant explained that, on February 22, 2004, he learned that his home was scheduled for foreclosure in approximately eight days to satisfy a judgment against his brother, although the judgment had not been entered against him personally and his brother did not have any ownership interest in the property. Appellant met with an attorney "to strategize about how [he] could possibly keep [his] home from being taken," and he was "terrified, angry, and scared" because he did not know what was happening, was spending money "hand over fist on attorney's fees," and thought the dispute would go on forever. Based on his conversations with his attorney, appellant believed that there was a possibility that the judgment against his home was valid. Thus, appellant stated that he "cooperated with [his] attorney . . . to try to keep [his] house from being taken," and, on March 1, 2004, the parties entered into an "agreement to not sell [his] house at foreclosure." Appellant denied that he was "ever interested in bargaining for the right to the judgment against his brother" or that it was ever his intention to purchase the judgment against his brother. During cross-examination, Cedyco introduced into evidence the "Execution and Order of Sale" signed by the county court on February 2, 2004 in underlying proceedings and the "Verified Emergency Motion for New Trial, Request for Abatement of or to Set Aside Execution and Order of Sale," which was filed in the county court by Michael on February 22, 2004. In its order of sale, the county court recited that the 1986 judgment was a valid final judgment, Michael owned the property, the abstract of judgment created a lien on the property, and Cedyco was entitled to the order. In his verified emergency motion, Michael stated that the property was owned by appellant, the 1986 judgment was dormant and invalid, the abstract on the property had expired, and Cedyco's lien had ceased to exist. The motion was verified both by Michael and Timothy Ploch, who was appellant's attorney. ⁽³⁾

Appellant further testified that he attended a hearing on the day before his home was to be sold and that "there was a negotiation in the hallway" prior to the hearing. Appellant explained that he "basically left it in [his] attorney's hands," denied that he had talked to his attorney about buying the judgment against his brother, and stated that he did not think that he had purchased the judgment. However, when asked who came up with the idea of "paying [the] judgment," appellant testified that "it was mainly between [his] attorney's advice" and that both he and his attorney had discussed it. When appellant was presented with a copy of the assignment of judgment, he acknowledged it and conceded that his attorney had drafted it. He further agreed that it may have been "briefly discussed" that he might be able to execute the judgment against his brother, but then stated that he would not do that because the judgment was invalid, dormant, and unenforceable. Appellant further stated that he "never intend[ed] to collect on" the judgment, he had not recorded the assignment of judgment in the county records, and he had drawn up a release of the assigned judgment in favor of his brother and had filed the release in the county records.

Appellant acknowledged that, on March 1, 2004, the county court in the underlying case had entered an agreed order granting Michael's verified emergency motion for new trial and vacating the order of sale. Appellant agreed that he authorized his attorney to enter into this agreed order and that he was with his attorney in the county court on the date that the parties entered into the agreed order. He also explained that the parties entered into this agreed order after they "agreed to a price."

Following the bench trial, the trial court entered a final judgment in favor of Cedyco and ordered that appellant take nothing. The trial court subsequently entered findings of fact and conclusions of law. The trial court found that on November 22, 1993, AC deeded the property to appellant; on August 19, 1996, Cedyco received by assignment the rights to the judgment against Michael; on November 18, 1996, the abstract against Michael based on the 1986 judgment expired; on March 31, 1997, Cedyco filed an abstract of judgment against Michael based on the 1986 judgment; on January 5, 2004, Cedyco moved the county court to order the sale of the property; on February 2, 2004, the county court ordered the sale of the property; on February 22, 2004, appellant learned that the property was scheduled for sale; on February 28, 2004, Michael filed a verified emergency motion to set aside the order of sale; a hearing on the emergency motion was ordered to be held on March 1, 2004; appellant agreed to pay Cedyco $14,000 to obtain Cedyco's rights in the judgment against Michael; and, on March 2, 2004, appellant paid Cedyco $14,000. In its conclusions of law, the trial court stated that the sale of the property was noticed pursuant to a valid order and that appellant had bargained for and received all of Cedyco's right, title, and interest in the underlying judgment.

Standard of Review

In an appeal of a judgment rendered after a bench trial, the trial court's findings of fact have the same weight as a jury's verdict, and we review the legal and factual sufficiency of the evidence used to support them, just as we would review a jury's findings. ⁽⁴⁾ Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994); Daniel v. Falcon Interest Realty Corp., 190 S.W.3d 177, 184 (Tex. App.--Houston [1st Dist.] 2005, no pet.). When challenged, a trial court's findings of fact are not conclusive if, as in the present case, there is a complete reporter's record. In re K.R.P., 80 S.W.3d 669, 673 (Tex. App.--Houston [1st Dist.] 2002, pet. denied).

In conducting a legal sufficiency review of the evidence, a court must consider all of the evidence in the light most favorable to the verdict and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). If a party attacks the legal sufficiency of an adverse finding on an issue as to which it bears the burden of proof, then it must demonstrate on appeal that the evidence conclusively established, as a matter of law, all vital facts in support of the issue. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989). In determining whether legally sufficient evidence supports the finding under review, we must consider evidence favorable to the finding if a reasonable fact finder could consider it, and disregard evidence contrary to the finding unless a reasonable fact finder could not disregard it. City of Keller, 168 S.W.3d at 827; Brown v. Brown, 236 S.W.3d 343, 348 (Tex. App.--Houston [1st Dist.] 2007, no pet.). When a party attacks the factual sufficiency of an adverse finding on an issue on which it has the burden of proof, it must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001). In reviewing a claim that a finding is against the great weight and preponderance of the evidence, we consider and weigh all of the evidence and may set aside the verdict only if the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).

In an appeal from a bench trial, we review a trial court's conclusions of law de novo, and we will uphold the conclusions if the judgment can be sustained on any legal theory supported by the evidence. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002); In re Moers, 104 S.W.3d 609, 611 (Tex. App.--Houston [1st Dist.] 2003, no pet.). Although a trial court's conclusions of law may not be challenged for factual sufficiency, we may review the legal conclusions drawn from the facts to determine whether the conclusions are correct. BMC Software Belgium, N.V., 83 S.W.3d at 794. If we determine that a conclusion of law is erroneous, but that the trial court nevertheless rendered the proper judgment, the error does not require reversal. Id.; Vaughn v. DAP Fin. Servs., 982 S.W.2d 1, 6 (Tex. App.--Houston [1st Dist.] 1997, no pet.).

We note that the trial court acts as fact finder in a bench trial and is the sole judge of the credibility of witnesses. See Murff v. Murff, 615 S.W.2d 696, 700 (Tex. 1981); HTS Servs., Inc. v. Hallwood Realty Partners, L.P., 190 S.W.3d 108, 111 (Tex. App.--Houston [1st Dist.] 2005, no pet.).

Review of Legal Conclusions

In his second and third issues, appellant argues that "the trial court's legal conclusion that [he] bargained for and received all of [Cedyco's] right, title, and interest in and to the underlying judgment was reversible error because the factual findings fail to provide any support for this legal conclusion" and "the trial court should have made conclusions regarding [Cedyco's] fraud and unfair debt collection practices as a matter of law because the findings of fact demonstrate that the underlying judgment was dormant and [Cedyco] misrepresented the validity of the judgment in order to improperly claim rights to [Snodgrass's] property."

Within his first issue, appellant complains that "he was persuaded in the hallway before the hearing to pay [Cedyco] for its purported rights in the judgment" and that the county court "was never afforded the opportunity to review" his emergency motion or the county court's order of sale. Within his second issue appellant further complains that it was "very likely that the execution order would have been found invalid" by the county court.

Here, appellant's testimony was equivocal, contradictory, and in direct conflict with the terms of the assignment of judgment. Appellant initially testified that he never intended to purchase the judgment against his brother, he had never discussed this possibility with his attorney, and he had, in fact, never purchased the judgment. However, he subsequently testified that he recognized the assignment of judgment, and he conceded that the assignment had been prepared by his own attorney. Appellant further conceded that, although he "basically left" the settlement negotiations in his "attorney's hands," he had in fact discussed the option of buying the judgment with his attorney.

Appellant did not dispute that he authorized his attorney to prepare the assignment. He also did not assert that he had failed to understand the plain terms of the assignment, which expressly provided that the assignment was being made "without recourse of any kind or character" and "without representation or warranty of any kind or character, including but not limited to any representation or warranty regarding the validity of the Assigned Judgment or any liens securing it."

In regard to the validity of the 1986 judgment and order of sale, appellant testified that, based upon his conversations with his own attorney, he believed that there was a possibility that the judgment was valid, he and his attorney "strategize[d] as to how to keep his home," and he "cooperated with [his] attorney." Thus, one of the theories that appellant presented to the trial court was that, although he was represented by counsel in the county court proceedings, he had not discovered the purported fraud at the time that he had entered into the assignment. However, appellant also agreed that, prior to electing to enter into the assignment, his attorney had filed the verified emergency motion in the county court proceedings, which established that appellant owned the property and that it was not subject to foreclosure. Within this emergency motion, filed by Michael and on behalf of appellant, appellant had also challenged the validity of the judgment and order of sale for many of the same reasons that he raised in bringing the instant suit against Cedyco. Yet, the evidence established that after the filing this emergency motion, in which appellant's attorney raised the issues that appellant again attempted to raise in the instant case in support of his fraud and debt collection claims, appellant nevertheless entered into the assignment. This evidence undercuts appellant's contention that he was unaware of questions regarding the validity of any alleged lien on the property when he entered into the assignment.

In regard to the agreed order, appellant conceded that he was with his attorney in the county court on the date that the county court entered it. It is undisputed that, by setting aside the sale, the county court's order provided appellant with the relief requested in those proceedings. Thus, appellant's argument that the county court never had the opportunity to consider the arguments raised in the emergency motion ignores the fact that the county court actually heard and granted the agreed motion. Although appellant testified that the parties entered into this agreed order only after they had "agreed to a price," no other evidence indicates that the county court entered its agreed order and granted the requested relief contingent only upon the parties' entry into the assignment of judgment. ⁽⁵⁾

In sum, appellant's testimony was contradictory on whether he intended to purchase the judgment, and his testimony that he did not intend to purchase the judgment was countered by the plain terms of the assignment, which, as appellant conceded, was prepared by his own attorney. Based on these contradictions, the trial court was entitled to give little, if any, weight to appellant's testimony that Cedyco made misrepresentations on which he relied in entering into the assignment. The trial court, in its role as fact-finder, could have rejected appellant's claims that, once Cedyco discovered Michael no longer owned the property, Cedyco continued to make demands or threats against appellant. Based on appellant's testimony, the trial court could have reasonably concluded, regardless of the validity of the judgment, that appellant entered into the assignment to avoid continuing to pay attorney's fees necessary to investigate the status of the 1986 judgment, to avoid uncertainty in litigation, to prevent the dispute from going on "forever," or to insulate his brother from any further litigation regarding the judgment, as evidenced by appellant's preparation and filing of a release in favor of Michael in the county court records. Additionally, the trial court could have reasonably concluded that, to whatever extent Cedyco held any right, title, and interest in the judgment, appellant bargained for and received any such right, title, and interest by entering into the assignment. Accordingly, we hold that appellant did not establish, as a matter of law, that Cedyco committed fraud or violated the FDCPA and that the trial court did not err in not making any such conclusions. We further hold that the trial court did not err in not making additional findings of fact in support of appellant's claims.

We overrule appellant's second and third issues.

Conclusion

Having held that the trial court did not err in concluding that Cedyco did not commit fraud or violate the FDCPA and that the trial court did not err in not making any additional findings of fact in support of appellant's claims, we need not address appellant's first issue regarding the trial court's conclusion concerning the validity of the county court's order of sale as the conclusion is not essential to the judgment. We affirm the judgment of the trial court.

Terry Jennings

Justice

Panel consists of Chief Justice Radack and Justices Jennings and Bland.

1.

See 15 U.S.C. § 1692 (2005).

2.

The assignment of judgment stated that the assigned judgment was entered in an underlying cause styled Sakowitz, Inc. v. Michael Snodgrass, No. 476,361, in the County Civil Court at Law No. 1 of Harris County, Texas.

3.

Although the emergency motion was filed and verified by Michael, appellant testified that Timothy Ploch, the attorney who filed the motion on behalf of Michael, was his attorney and that the emergency motion was also filed on appellant's behalf. Appellant further testified that Ploch was representing him in the county court proceedings.

4.

Although, in his issues on appeal, appellant specifically challenges certain conclusions of law, he also refers to legal and factual sufficiency challenges.

5.

The agreed order was signed on March 1, 2004; the assignment was signed on March 3, 2004.